PEORIA — For a city that hasn't had a lot of positive news lately, the announcement that OSF HealthCare will take over a block in the heart of Downtown was well received.

"It's fantastic," said Michael Freilinger, president and CEO of the Downtown Development Corp. "We'll have more people out on the streets. That means more shopping, dining, more jobs. That means more people working in the heart of Peoria."

"It's a win-win for everybody. This is smart growth. There's no need for new fire or sewer services than if (OSF) had moved outside the city," Freilinger said.

The use of historic tax credits, the same tool that's helped develop Peoria's Warehouse District, is central to the OSF move, he said. "Kudos to the state of Illinois for keeping this program alive," said Freilinger, who also expressed appreciation to national lawmakers who restored the federal tax credit to the budget after initially eliminating the program.

Developer Kert Huber called the decision by OSF to take over the Caterpillar block "phenomenal." "It helps blunt the negative aspects of Cat's announcement last year. Losing its place as Caterpillar headquarters has been devastating psychologically as well as economically (to Peoria). This will turn the tide," he said. 

Mark Misselhorn, chairman of the Downtown Advisory Commission, echoed that sentiment. "Now a vacant block will have new life. It turns a sad story into a positive thing. Caterpillar's got to be happy, too. The company doesn't have that block as an albatross," he said.

"If that building (124 SW Adams St.) had come down along with the rest of the block, we could have had an empty block Downtown. That would have been the worst thing. It would have been like the Sears block, a constant reminder of what might have been," Misselhorn said.

Sears left Downtown for Northwoods Mall in 1998. Demolition on the Sears site took place in 2005, and the museum and visitors center opened at the location in 2012.

Tom Camper of Joseph & Camper Commercial Real Estate Co. said OSF's plans to use the block mean a lot in a city where the commercial vacancy rate Downtown is 25 percent. "That's not including the Chase Bank Building because it's been closed," he said of the vacancy rate.

"This is great news for Peoria. More people will want to live Downtown with more jobs Downtown," Camper said.

Chris Setti, Peoria's assistant city manager who takes over as executive director of the Greater Peoria Economic Council on Monday, called the OSF announcement "great for the region." "The status of Downtown Peoria is super important for everybody in the area," he said.

Given OSF's rapid growth across the state in recent years, Setti suggested that the OSF organization likely would be even bigger by the time the Chase building renovation is completed in two years or so.

Steve Tarter covers city and county government for the Journal Star. He can be reached at 686-3260 and Follow him at Twitter@SteveTarter and