A Champaign County Community Blog

Downtown Hotel Incentive Approved, Who's Unhappy?

On March 12th I posted a scheduled article on this website to discuss the plans for the new downtown Champaign hotel at the SW corner of Neil & Church:  http://www.halfwayinteresting.com/Pages/CityofChampaign/tabid/90/entryid/873/Downtown-Champaign-Hotel-a-Good-Plan.aspx
On Tuesday, the city council approved up to $3 million in tax rebates to assist the developer of the project.  In my prior article, I said I was in support of the incentive package as long as there was proof of demand for the rooms.  After further thought, I began to question the developer's experience and ability to attempt such a large project.  I have seen more experienced developers fail at much smaller projects.  However, do not be afraid my fellow citizens; I cannot come up with a legitimate reason why this incentive could "hurt" taxpayers.  The developer has chosen a great "flag" for the hotel, a Hyatt Place.  And if he is smart, he will partner with someone with significant development experience and partner with another or hire a manager who has hotel operation experience.

I know there are plenty of naysayers out there who have their reasons why they think the incentive is not in the best interest of taxpayers, but I have yet to hear one that is truly legit.  Go ahead fellow bloggers, let's hear your reasons for why this was a poor decision on the part of your elected council.

Downtown Champaign Hotel a Good Plan?

In case you haven’t been paying attention, local businessman Hans Grotelueschen has revealed plans to build a hotel on the former site of the Metropolitan Building in downtown Champaign. (N-G article: http://www.news-gazette.com/news/business/economy/2011-09-02/new-owner-metropolitan-site-wants-hotel-there.html).  In order to do so, he requested up to $3 Million in tax rebates from the City of Champaign which the council unanimously approved on February 21^st.  Mr. Grotelueschen purchased the vacant lots of the Metro site and also owns the adjacent storefront previously occupied by his company (YG Financial).  The combined area of the three parcels totals 23,232 square feet (176’ x 132’) at the southwest corner of Church and Neil Streets.

Being that the property is privately owned, Mr. Grotelueschen has the privilege of building whatever he wants on the site as long as the use fits within the local zoning code (Central Business) and abides by local building codes.  However, being that the site is at the center of the downtown business district and historic center of the community, one may argue that the developer must respect the input of local citizens.  Some comments I have read on message boards go even further to suggest that downtown Champaign is somehow public domain and that the owner of the lot should build whatever is in the public’s best interest.  While I object to that assertion, now that the City has agreed to provide tax rebates, perhaps we the people should have more say in the project.

Those supporting the proposed nine-story 145 room hotel say that a hotel in downtown Champaign is needed to attract certain events to the area and will provide an influx of new business for downtown bars/restaurants/retailers.  Bruce Knight (Planning Director) points to other successful downtown districts and asserts that employment, entertainment, and residents are all required to create a “24-hour downtown”.  A hotel, while not providing permanent residents, provides a constant flow of visitors to the downtown district and is towards the top of the list of priorities for the City.

Opponents of the project question whether it is worth “spending” tax dollars to promote a redevelopment while the city is having trouble balancing their budget.  The vote for the tax rebate also comes on the heels of the approval of a 4 cent per gallon fuel tax which many citizens object to.  Other opponents feel as if this is another case of “corporate welfare” and wonder when other citizens will get rebates on the real estate taxes they pay for their properties.  I have also heard arguments that a hotel at this location will create too much vehicular and pedestrian traffic at this intersection.

So who has it right?  In my opinion, both sides make some good points.  City planners explain that without the project being built there would be no new food & beverage taxes, hotel-motel taxes, or real estate taxes generated, so therefore they are not “spending” any taxpayer money.  I also agree with the other side when they make the point that a development not requiring tax rebates might be a better use of the site.  Clearly the city council feels as if the hotel use being proposed now is better than waiting for a future development that does not require the rebates.  Had I been sitting in a council seat, I would have posed the question of demand.  Is there a study showing that there is demand for additional hotel rooms in the area, and if so, is there specifically demand for a hotel located downtown?

Being that Mr. Grotelueschen is a financial analyst, I would hope that he has studied the market to determine there is indeed demand for his $28 million hotel.  If that is the case, then I am in support of the project and of the tax rebates.  My reasoning is that if there is demand for more hotel rooms, then someone will build another new hotel somewhere in Champaign-Urbana.  And being that it is much cheaper to build a hotel on a greenfield site on the edge of town than redevelop an urban site, there is a high likelihood that a developer without rebates would choose the cheaper site over the urban site.  Since I support the further redevelopment of our downtown core, I view the rebates as a redevelopment incentive and nothing more.  Recent commercial real estate periodicals I read have frequently been touting the improving hospitality industry, including the upward pressure on average room rates and increasing occupancy rates.  Therefore, I believe that the city planners and council made the correct decision.

Matt Wavering is a commercial real estate broker with Coldwell Banker Commercial Devonshire Realty and can be reached at 217-352-7712 or mjw@cbcdr.com

Reminder-Town Hall II 11 March

Reminder--Town Hall II for Champaign County residents, particularly those who live in district 6 and the recently drawn district 6 will be held on 11 March. This will be at the Champaign Public Library, room C, from1-2 P  This good will be an excellent time to talk about the major issues in the county, such as the county jail, Land Evaluation and Site Assessment update, the Local Food Policy Council or any others that are important to you.  Stop by to share your thoughts.

Fortunately,  the Prairie Dogs will be playing in rooms A & B from 2-3:30 P so the whole family can spend an afternoon at the library.

If you can not stop by, do not hesitate to share your thoughts via email.

Happenings Champaign County Board

County Board issues--jail and local food policy council.

Charles Linville Founder of Ploughman Analitics is Guest on One on One Sunday

This week's show will air Sunday at 10:00a on WCIA channel three.  All interviews are posted on web at www.ruggieriteam.com

Town Hall II-CC District 6--11 March

Town Hall II, Champaign County District 6, 11 March

Local Food Policy Council--CB--14 Feb

Local Food production and enhancement as a means of economic development in the county.

Champaign County--upcoming issues

It is time to get back into the routine of the monthly column. There is happening within Champaign County that might interest the residents during these two months before the primary election.

The News-Gazette has published an article by Tom Kacich and today has an editorial concerning the discussion about county elected officials salaries that must be set by May. Actually, I think most board members anticipated comments at the COW meeting on the 17th of January, but this did not occur. The issue has been deferred until the February agenda, thus giving the public another opportunity to share thoughts/ideas/concerns about the salaries. You will find a memo from Deb Busey detailing some facts and figures  here 

http://www.co.champaign.il.us/countybd/COW_PPA_JSS_F/120117agendaf.pdf   beginning on p. 15.

Several board members asked for even more details to be available for the February meeting.

The downtown jail issue will be covered during a study session on 31 January 2012, beginning at 6 P. This issue will consume a lot of time and attention for the next year and there will be a new board in place by then.

The LESA (Land Evaluation and Site Assessment) update committee has been meeting since last June. This is a very important factor enveloped into county land use. Only two constituents have regularly been attending. Just to encourage others to do so, the next meeting is next Wednesday, 26 January in the Dimit Room at Brookens. If you want to delve through the many layers of materials, you can do so here   http://www.ccrpc.org/planning/LESA_Update.php

The last issue I will include in this posting, but certainly not the last issue for the county has to do with establishing a local food policy council on the county level as a means toward economic development. This will be on the COW February policy agenda on 14 Feb., Valentine's Day. If you would like to read the draft version, you can do so here

http://www.co.champaign.il.us/countybd/COW_PPA_JSS_F/120117handouts.pdf    beginning p. 39

or on my web site   here   http://sites.google.com/site/p2district6/news/champaigncountylocalfoodpolicycouncil--draftproposal

As is always the case, I welcome your comments, ideas, and suggestions.

Which Presidential Candidate Will Most Positively Effect Development?

My take on which presidential candidate will bring the most positive impact to our local economy.

Coffee with the Mayor

Wednesday, September 14^th I attended a round-table discussion hosted by Mayor Gerard and the local Chamber of Commerce.  This article gives a quick synopsis along with my take on the event.