PEORIA HEIGHTS, Ill. — A mixed-use development proposed to replace a Save A Lot grocery store will now be a two-story building, rather than three.

The project’s original design was for a four-story building with both commercial space and residential units at 4425 N. Prospect Road. That plan was then modified to three stories, with the residential component eliminated.

Now the proposal has changed again, this time to a two-story building, as the developers look to save money by eliminating the steel components necessary for a three-story building, according to developer William Torchia.

“It was basically an economic decision,” he told the Journal Star. “Just the cost of construction to go three stories, the type of construction you have to do to go that high is totally different. It actually adds a lot of steel, a steel structure into the building. So, going back to two stories, we’re allowed to eliminate all of the steel structure that we had to do and now we can build a two-story building out of wood. Economics was the driving force behind reducing the size of the building from three to two stories.”

The eliminated floor would have been office space, Torchia said. The first floor will hold commercial space that Torchia and village officials hope and expect will attract sales-tax generating businesses. The second floor will be occupied by accounting firm CliftonLarsonAllen.

Peoria Heights Mayor Matt Wigginton told the Journal Star he would have preferred a three-story building, like the one proposed to the village board earlier, but he understood the economic reasons behind the decision.

“From my perspective, would I have loved a four- or three-story building?” he said. “Absolutely. Absolutely. I’ve said it time and time again, in Peoria Heights we don’t have an unlimited amount of space. We have to build up; we can’t build out. I would have preferred a taller footprint, but again I understand the realities that were presented and I am not in the commercial real estate world, so I’ll just leave it to the people who are.”

The project’s total investment, including the cost of land acquisition and demolition of the Save A Lot building, will be $12.5 million, board trustee Beth Khazzam said.

The changes to the development plan sparked a debate Tuesday night among village board members regarding a lack of clarity in the village’s zoning code as to what actions officials could take, if any, when an approved site plan changes like this one did.

Village attorney Mark Walton told the trustees that the village’s code does not specifically address an instance like this one, whereas a city like Peoria, which has hundreds of pages of zoning code, would.

Board members Sarah Devore and Nate Steinwedel on Tuesday night advocated for the village code to be reviewed in wake of changes to the development plan.

Devore said the board was shown a three-story building and was now being asked to accept a two-story project. Whether or not that violated village code, she said, was up to interpretation, but it still “materially changed the project presented to the public and approved by this board.”

“What concerns me most in this situation, among several others we have found ourselves in, highlights a weakness in our code,” Devore said. “We spend significant time reviewing projects, holding public meetings, considering the impact on the community and approving plans based on what is presented to us. Yet, when a substantial change is presented to us, we find ourselves debating whether we even have the authority to require that it come back through that same public process.”

Wigginton told the Journal Star he is open to amending the village code, and amendments are in the works, but he is not in favor of retroactively applying rules.

“It’s hard to paint that with a broad brush because typically how the village has operated is less burden on development and encouraging things to happen in the Heights, and so when you get into the weeds on some of these things, it could have the opposite effect, where you chase away business and development,” he said. “One of the things the Heights has is how we built this momentum and record of success is we try to work cooperatively.”

Some of these concerns will be addressed in the village’s revised zoning code, which should come out later this year, he said.

Despite changes to the project plan, the village board moved ahead Tuesday night in approving a tax-increment financing deal with the developers that will see them reimbursed based on how much sales tax the property generates.

If the property generates more than $2 million in sales, the developers will receive a 100 percent TIF reimbursement. If it generates more than $1 million, the reimbursement will be 80 percent, and if the generated sales are less than $1 million, the reimbursement will be 60 percent. Total reimbursement will not exceed $2.5 million.

Torchia said the developers, which include himself, Ciaron Graham and Brandon Dean, are excited about the TIF and believe it is a fair deal for them and the village. He also said the goal is to fill the first floor of the development with sales-tax generating businesses and that the process of attracting those businesses has been going “very well” so far, with announcements on the horizon.

Editor’s note: This article originally appeared in the Journal Star and then was distributed on the USA TODAY Network via Reuters Connect.

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Locals call it “The Pit”.  It’s a giant rectangular hole in the heart of downtown Salem.

A 70-year-old marble and granite bank once stood on the southeast corner of Liberty and Chemeketa streets, where a fence partially conceals the rubble left behind nearly nine years after the building was torn down and its 14-foot basement was excavated.

The demolition debris is now mixed with overgrown vegetation and scattered trash, including a twin mattress, a blue recycling bin, and several orange and white city of Salem barricades.

The property has a complicated history, with multiple owners and developers abandoning plans to redevelop the site over the years due to high construction costs and constraints within the downtown historic district.

The current owner, FT LLC, reacquired the property last year and expressed desire to build a surface parking lot for the adjacent building it owns. But that plan is not currently permitted under the city zoning code.

FT LLC has submitted a land use application with the city. It’s the first official redevelopment proposal since the bank building was demolished in 2017. The previous one involved a combination of housing and retail space. Other similar plans were conceptualized but never advanced beyond the pre-application conference phase.

The plight of the property dates to 2001, when Wells Fargo closed its Liberty Street branch not long after merging with First Security Bank.

Officials determined the First Security location at 580 State St. offered more usable space, a larger parking lot and better access for vehicles, so they consolidated the two downtown branches. Wells Fargo Advisors still operates at the State Street location.

Wells Fargo occupied the Liberty location after acquiring First Interstate Bank, formerly First National, in 1996. First National constructed the building in 1947 on the site of a former service station.

The 21,400-square-foot building was designed by renowned Portland architect Pietro Belluschi; its exterior was sheathed with dark granite on the 8-foot base and white marble above.

Eight large cameo carvings by sculptor Frederic Littman, now referred to as relief sculptures, decorated the western marble face and portrayed the industrial and commercial life of the Salem region.

The bank president called the design “an edifice of pleasing architectural beauty.” The Oregon Statesman reported the cost of the building to be $500,000 — equivalent to $7.4 million today.

The interior featured a mezzanine above the rear of the ground floor and the main safe deposit vault in the basement, which extended underneath the sidewalk of Chemeketa Street. The basement also contained an employee cafeteria and mechanical rooms.

Over the course of seven decades, the bank employed countless residents and served the financial needs of generations of customers before Wells Fargo closed the branch and sold the property.

SP Development purchased nearly half a downtown block in 2005, including the bank building at 280 Liberty St. N.E. The deal took more than two years due to environmental concerns about underground fuel tanks at 277 High St. N.E, the former city hall site and parking lot since 1972.

The group, which included the Colson family and former Holiday Retirement Corp. senior managers, supported a plan for mixed-use development but determined that rehabilitation of the bank building would be cost prohibitive and economically unviable. In other words, it would not generate enough profit to justify the expense.

SP Development requested permission from the city in 2008 to demolish the building, which had structural deficiencies and would have required significant seismic and safety upgrades. Their application estimated reusing the existing building would cost between $6.6 million and $9.8 million.

The bank was in the downtown historic district and designated as a historic contributing resource. That meant demolition plans had to be approved by the city’s Historic Landmarks Commission.

Approval was granted in September 2008.

The Statesman Journal archives show various tenants occupied portions of the building while demolition plans languished, including a title company, bead store, mortgage company and pain center.

Nearly eight years later, in 2016, SP Development sold the bank and the parking lot to the east to FT LLC for $1.77 million.

The new owners, associated with Pacific Office Automation, submitted their own plans to demolish the bank building and redevelop the property. Their proposal was approved under three conditions, including the prominent display of the preserved marble relief sculptures on any new building.

It took three days to remove the eight sculptures from the west façade before the bank could be torn down. Each one was 5 feet tall, 6 feet wide, and 6 inches thick.

A conservator cleaned, palletized and covered the sculptures for storage in a Portland-area warehouse, where they remain today.

Demolition of the building was completed in the fall of 2017, creating The Pit as we know it today.

FT LLC never followed through with redevelopment. Once again, the city understood financing to be the biggest obstacle.

Mountain West Investment Corp. stepped up to purchase and develop the site in 2019, proposing to build more than 150 apartments by Salem Center mall as part of a project including two mixed-use buildings with ground-floor retail space.

Local architects were enlisted to draft drawings, and a pre-application conference was held with city officials before Mountain West backed out. A Mountain West representative told the Statesman Journal at the time that the deal fell apart due to high construction costs.

FT LLC eventually found a buyer for The Pit and the parking lot properties.

DD Citizen LLC, associated with Deacon Development, purchased the properties in November 2024. Deacon built the Rivenwood Apartments at the former Nordstrom site downtown.

New ownership translated into new hope for redevelopment of The Pit, but within seven months that was gone, too.

Deacon planned to develop both sites but within seven months had steered away from The Pit, repeating what their predecessors discovered — redevelopment was economically unviable.

Company officials said the site presented infrastructure challenges, including a high water table and stormwater connectivity issues, and additional conditions and costs related to historic overlay requirements.

New construction projects within Salem’s downtown historic district must go through a design review process and meet requirements intended to preserve the character of a designated historic district.

DD Citizen LLC sold The Pit property back to FT LLC in June 2025.

A few months later, Deacon crews broke ground on a $25 million, six-story, mixed-use building on the High Street property. The Citizen Apartments will include 105 units (a mix of studios and one-bedroom and two-bedroom units) and ground-floor commercial space.

City staff welcomed the project’s potential to revitalize an area that lagged other parts of downtown, holding out hope that The Pit will be next.

“Maybe when the apartment complex opens, now that the Forge is redeveloped, and if JCPenney is redeveloped, that might be a catalyst to moving things along in some way,” said Lisa Anderson-Ogilvie, the city’s planning administrator.

The Pit remains an eyesore while progress is made on the neighboring apartment building; completion is slated for spring 2027.

FT LLC has removed trash at the site multiple times and considered removing the demolition debris, but the city told the company that archaeologists would need to be involved. The debris now includes large chunks of granite and new layers of trash.

Local developers agree that constructing a mixed-use building at the site — something the city has hoped for since the bank was demolished — would be feasible but costly.

FT LLC submitted a land use application in January, proposing a surface parking lot exclusively for the building to the south. Pacific Office Automation occupies much of the ground floor, but the remainder of the building is apparently vacant. Exterior signs and interior fixtures and furniture for a taco restaurant remain even though it closed more than a year ago.

The preliminary site plan shows 26 parking spaces in the lot, with entry from Chemeketa Street through the alley east of the property.

The city reviewed the application for completeness in February, outlining additional information needed to address several items. One requires a list of all members of the company involved with the land use application request to identify any potential conflicts of interest.

BRAND Land Use is listed as the applicant and owner Britany Randall as the agent for FT LLC. Randall responded to a Statesman Journal inquiry but declined to answer questions on behalf of the property owner.

The city’s completeness review noted that constructing a surface parking lot would require a property line adjustment to consolidate the property with the abutting one to the south.

“As discussed at the pre-application conference, a stand-alone surface parking lot on a separate lot is only allowed as Commercial Parking … where such parking is available to the public and not exclusively accessory to a specific use or development,” the review stated.

The review also noted the need to apply for a variance because a surface parking lot would deviate from one of the conditions of the 2017 historic demolition approval for the bank building. An applicant for proposed development is required to use the eight Littman relief panels on the exterior of a new building.

City planners have since met with FT LLC representatives to discuss different options, including a parking garage with public access.

Parking lots, in general, are considered a detriment to the vibrancy of any downtown area, not only diminishing the charm necessary to attract visitors but reducing tax revenue.

Liam Bean, land use chair for the Central Area Neighborhood Development Organization, said CANDO “strongly opposes the construction of new surface parking lots without addition of retail space or dwelling units in downtown Salem.”

Downtown Salem has other voids to fill besides The Pit, including Block 50 to the west where the former Union Gospel Mission once stood.

The city began acquiring buildings on the block in 2020, including the UGM, ABC Music and Saffron Building Supply, with the intention of using the properties to help revitalize the downtown core. Its vision for the site is housing or offices with a mix of services on the ground floor, including restaurants, coffee shops, brewpubs, a grocery store or other retail.

Demolition of Block 50 began in the winter of 2022, leaving its own mini hole in the ground near the corner of Commercial and Chemeketa.

But there is only one Pit.

Developers and city planners agree that timing is everything. For The Pit, property conditions, the market and economy, and construction prices have yet to align in the 25 years since the bank closed.

The good news is that lessons have been learned through the struggle to redevelop the property.

The city’s historic code has undergone a major overhaul, more closely tying new construction to a demolition permit. The Holman Hotel on the former Marion Car Park property is a good example. The city had a proposed use to consider when reviewing the proposed demolition of the car park.

The Pit’s fate likely won’t be known for months.

FT LLC has 180 days from the date of submission to provide information and materials requested by the city. The application will expire July 22 if not deemed complete prior to that.

The land use application process can be lengthy. Decisions are complex and never made lightly due to the impact they can have on the community for generations.

“Once something is built, it will be there for a very long time,” Anderson-Ogilvie said. “Sometimes, I think it’s better to wait for a use more consistent with our vision for downtown.”

Editor’s note: This article first appeared in The Statesman Journal and then was distributed on the USA TODAY Network via Reuters Connect.

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