EAST PEORIA — East Peoria might finally see residential construction in its Levee District commercial district, although a proposed 40- to 50-unit "workforce" apartment building on Center Street isn't quite what city officials envisioned four years ago.

Still, it's a welcome development. And, the plan is for it to be the first of several residential projects in the area that could ultimately include the initial vision of an upscale high-rise with commercial shops on the ground floor  on the western end of the Civic Complex property on East Washington Street.

"I am very encouraged by this potential development. From the beginning we envisioned building a new downtown, which includes a residential component. This would be a big step toward rounding out the Levee District and provide great synergy for the area," Commissioner Gary Densberger said Thursday. " East Peoria also needs to diversify our housing market, and the addition of quality apartments is a definite step in the right direction."

The City Council last week approved a master development agreement with the Rock Island Economic Growth Corp., which goes by GROWTH, to build a three-story apartment building on a four-acre parcel on the fringe of the Levee District. GROWTH, a not-for-profit development company, is based in Rock Island, where it has built or rehabilitated more than 350 housing units — houses and apartments — since 2001, according to a recent article in the Quad Cities Times newspaper.

"It's what they do. They are expert in integrating the commercial and residential,"  said City Administrator Jeff Eder, who came to East Peoria after working as assistant city manager in Rock Island.  "We like how it all fits together and the hope is that this is the beginning of other projects of higher value."

Brian Hollenback is the president of GROWTH.

"Our relationship with the city of East Peoria will get a kick-start in the Levee District with the Center Street project," he said Thursday. "It makes sense to start with workforce housing to target those people who work in the Levee District and provide an affordable place to live."

The Center Street project, which is still in concept phase, would provide studio and 1- and 2-bedroom apartments with monthly rents ranging from less than $300 to about $1,000 The property is on an out-of-the-way city-owned parcel shaped like half of an arrowhead squeezed between the back end of Costco and the elevated ramp of Illinois Routes 8/116 and the Cedar Street Bridge. Construction would cost about $12 million, Hollenback said.  The city has donated the property to the project and will also provide some site and infrastructure improvements.

Hollenback said he hopes to have preliminary approval of the Center Street plans and financing by the end of the year and full approval by March. A nine-12 month construction schedule could begin by mid-to-late summer.

Ty Livingston, East Peoria's planning director, said the plan would need planning board, then City Council approval.

"Under the zoning code, the proposed development will require a special use or a rezoning of the property," Livingston said Thursday. "The Center Street corridor is now the city's focus for residential development in this area.  We are in the process of identifying the next steps for this development to be addressed over the next several months."

Eder and commissioners traveled to Rock Island this month to view some of GROWTH's  work.

"There might have been a little skepticism about the workforce housing at first (among the commissioners)," Eder said. "But I think it helped a lot when they got to see the work that has been done in Rock Island."

The council will vote again on the master development agreement at a second reading at the council meeting on Tuesday.

Scott Hilyard can be reached at 686-3244 or by email at shilyard@pjstar.com. Follow @scotthilyard on Twitter.