Editorial: After a heartbreaking loss, resilience now plays in Peoria
Peoria, Illinois, came close to winning a similar game-changing investment when Caterpillar unveiled plans in 2015 for a massive downtown headquarters complex. Those plans got scrapped just two years later. Today, the heavy-equipment maker that defined Peoria for decades is celebrating its 100th anniversary at its new home base outside Dallas.
Peoria has had its share of disappointments, and the local economy is under pressure from the slow growth that characterizes so much of Illinois. But this longtime manufacturing hub along the Illinois River is proving to be resilient. It has mostly overcome the departure of Caterpillar's brass, retained its character as a city that makes things and doubled down as a regional medical center.
Peoria is not the company town it used to be, but it has a future. And its survival holds lessons for other Rust Belt cities that have missed out on growth opportunities but made the most of reimagined downtowns, affordable housing and low-cost property for commercial development.
Caterpillar remains a highly visible presence in Peoria. About 12,000 of its 112,900 global employees work in or around the city, and several thousand more work in Decatur and the Chicago area.
The company operates manufacturing-related facilities in Peoria and conducts global research and development on the city's outskirts, most notably at its secluded Proving Ground, which the Tribune profiled last year.
The Caterpillar Visitors Center is a prominent tourist attraction downtown. A movie about the company's history plays in a gigantic, three-story mining-truck-turned-theater. On a recent summer day, children were operating bulldozers and excavators on indoor simulators while 100th anniversary banners outside celebrated the 'past, present and future.'
Anyone worried about Caterpillar's future in Illinois should have listened in 2011, when then-Chief Executive Douglas Oberhelman, a Peoria booster, aired a rare public complaint. Then-Gov. Pat Quinn had just signed legislation increasing Illinois' personal income tax from 3% to 5% and the corporate tax from 4.8% to 7%.
Oberhelman warned Quinn that other states were urging the company to relocate. 'I have to do what's right for Caterpillar when making decisions about where to invest. The direction that this state is headed in is not favorable to business, and I'd like to work with you to change that.'
Deaf to business reality like many of Illinois' Democratic leaders before and since, Quinn shrugged off the warning, saying Caterpillar wasn't going anywhere: 'I don't think we should get in a panic at all.'
Had Quinn indeed panicked, who knows if Caterpillar would still be based in Peoria. As it was, Oberhelman came through anyway, promising in 2015 that the company would stay, despite the unfavorable business climate. He unveiled a $1 billion plan for a refreshed Peoria headquarters.
But Oberhelman was nearing retirement, and his presumed heir apparent, also a Peoria booster, reportedly got sick. The next CEO had no special allegiance to Cat's hometown and scrapped the headquarters plan. The corner office, with its clout and prestige, moved for a few years to north suburban Deerfield, then on to Irving, Texas, in 2022.
Nice going, Illinois.
While Peoria would never be the same, it wasn't helpless. One of the city's biggest strengths is its skilled workforce. And despite Illinois' steep taxes, punishing workers' compensation costs and pro-labor political agenda, Peoria remains relatively affordable.
Today, spacious warehouses and industrial buildings go for a fraction of the cost they would command in the Chicago area, and median home-for-sale prices run about $160,000, less than half the median price in Chicago. Peoria retains some of the same attributes that lured Caterpillar to it in the first place, including a central location, varied transportation options and ready-made industrial infrastructure.
At 3.9% as of June, the Peoria metropolitan area's unemployment rate is better than the statewide average of 4.5%. While manufacturing has shed jobs, as in much of the U.S., health care and construction have added employment. The city's fortunes today rest as much with Peoria-based OSF HealthCare and the sprawling Carle Health medical center as with the world's leading maker of mining and earthmoving equipment.
Next time a business leader as pro-Illinois as Oberhelman tries to tell the truth to the governor — and everyone else, for that matter — Illinois needs to listen
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