Zeller's legacy Brokers: Property likely has institutional future

April 3, 2002

By STEVE TARTER of the Journal Star

PEORIA - A 67-acre site in the heart of north Peoria featuring well-constructed buildings and plenty of open land may hit the market soon.

That is, if the state decides to sell the Zeller Mental Health Center.

Gov. George Ryan in February called for Zeller's closing because of a declining patient population. The center has only 93 funded beds, and as few as 60 have been occupied, according to the state.

Randy Wells, executive director of the National Alliance for the Mentally Ill chapter in Glenview, said any hope the hospital will remain open is likely false. The decision to lock the doors on Zeller is already "a done deal," he said.

While area legislators try to keep Zeller open, the state recently announced 150 of the center's 242 employees will be laid off later this month.

A decision on what to do with the property "is undetermined at this time," said spokesman Tom Green of the Illinois Department of Human Services, the state agency that oversees Zeller.

But area real estate brokers see a lot of potential in the site, saying an institutional use of the property is most likely if the state chooses to peddle it.

Along with the acreage, Zeller's nine buildings comprise a hefty 250,000 square feet. The largest structure, the two-story administrative building, is 49,700 square feet, Green said.

The state purchased the site in 1963 for $393,000 when the area was still farmland, he said. The buildings are presently valued at $8.2 million, he said.

"The highest and best use would be for another state agency to take the facility over. They (state agencies) could let their (current) leases lapse and use the buildings that are available," said Michael O'Brien, a commercial real estate broker in Peoria.

With the open land and sound buildings, a senior care facility might also be a possibility, he said.

Other developers agreed governmental reuse of the facility would probably make the most sense.

"I know that the Social Security Administration locally is looking for 12,000 to 15,000 square feet on one floor," said John Ginder, president of ReMax Realty in Peoria.

Federal concerns about accessibility would be answered by the Zeller facility, he said.

Other possibilitiesfor the site would be area hospitals, the Peoria School of Medicine or the National Center for Agricultural Utilization Research, said brokers.

"We're not in the market. We're investing in our own facility (at 1815 N. University St.)," an ag lab official said.

Officials at the hospitals and medical school could not be reached for comment.

"Until someone comes in with a plan, it's not a logical shopping center site," said Bob Wilkins, owner of Trader's Realty in Peoria. "I think a shopping site needs to be at the corner of some pretty good streets, plus I don't think it could compete with the Cullinan development that's going out there on (U.S.) Route 150.

"I don't think that the state will get it sold. They might want to give it to the medical school, moving an asset from a nonproductive use to a very productive one," said Wilkins.

"People are really going to have to think outside the box on this thing," he said.

But real estate agents also didn't rule out the possibility of offices or multiple-family dwellings occupying the site.

"It's a great area for a core-type development. Maybe (the city of) Peoria would buy it and bring a developer into the project," said O'Brien, citing the efforts of developer Ray Becker to convert the old Peoria State Hospital in Bartonville to an industrial park.

The Peoria State Hospital, established by the legislature of 1895 as the Illinois Asylum for the Insane, closed in 1973.