“Peoria Hotel Associates LLC is seeking partnership with the city of Peoria in a redevelopment plan for the revitalization and upgrade of the Holiday Inn City Centre.” So states a memo addressed to the Mayor and City Council members. The content of the proposal is very similar to the Marriott Hotel deal the council approved in December 2008, albeit on a smaller scale.
The redevelopment plan calls for the current Holiday Inn City Centre property to be “brought into the 21st century through a complete and comprehensive rehabilitation and renovation plan,” which would include upgrading the exterior, redeveloping the lobby and commercial space, changing 66 rooms into 35-40 suites, replacing Bennigan’s with an “upscale branded restaurant,” and changing the hotel from the Holiday Inn brand to either Crowne Plaza or Doubletree Suites.
The cost of the upgrade would be $10 million. The current owners of Peoria Hotel Associates LLC (d/b/a Holiday Inn City Centre) is Iowa-based Kinseth Hospitality Companies. According to the memo, they’ve already “maximized financing available through conventional bank lenders with a current loan in placee of $11,750,000.” So, they’re proposing this redevelopment “with the intent to participate in a city bond program similar to the redevelopment package that the current Pere Marquette Hotel is utilizing.”
We are requesting $8 million of financing similar to the Pere Marquette financing program with the goal of signing a redevelopment agreement very similar to the Pere Marquette/Marriott hotel redevelopment agreement. This will be coupled with a $10 mil New Market Tax Credit (netting $2 mil in cash). Listed below is a capital budget for our redevelopment process. We believe that the bonds will be paid through substantial sources of additional tax revenues that the city will achieve, including TIF, BDD taxes, BDD sales taxes, as well as substantial new taxes on the increases in revenues that we expect to achieve.
Cost Summary:
Exterior Upgrade $2,500,000 Lobby/Commercial Facilities $3,500,000 Restaurant & Bar re-concepting $1,000,000 Suites Conversion $1,000,000 Infrastructure/Systems $1,000,000 Meeting Rooms Upgrade $500,000 Brand Conversion $500,000 Total $10,000,000
You can read the entire memo and accompanying report here (warning: it’s a 7 MB PDF file):
Kinseth Hospitality Memo and Report
It’s not surprising to me that they would ask for a similar deal to the Pere Marquette/Marriott. And I fully expect the council to approve it whenever it comes to the floor for a vote. Once you open that door, everyone wants to come in and get their share of the money. It’s only a matter of time before a similar request from the Mark Twain appears.
It’s also not surprising that they want to dump Bennigan’s. The restaurant chain filed for bankruptcy last July, and Kinseth Hospitality recently filed a lawsuit against the franchise’s parent company for damages allegedly resulting from that bankruptcy.
UPDATE: The Journal Star now has the story you read here first, and they’ve interviewed a few council members. Funny, it’s one-fifth the cost of The Wonderful Development, yet the council members interviewed aren’t too keen on this new project. They cite concerns such as the amount of debt it involves and whether there’s enough market for that many upscale hotel rooms. Huh. I thought a project like this “pays for itself.” That’s what they said about the nearly $40 million bond for the Marriott. And as I recall, there were questions about the optimistic occupancy rates predicted in the Marriott project. Yet the council had no problem approving that project with next to no deliberation. I’m sure there’s a logical explanation.
GO FOR IT!!!!!!!!!!!!!!!!!!
Hells Bells! We are going to need to stick all of those ‘museum-goers’ somewhere?!?
Can any business build something on their own these days? It worked in the past…why must every city offer up incentives on the backs of the tax payer?
When you build a pig trough, can you be surprised when the pigs come and eat out it?
There is nothing wrong with this request (that wasn’t wrong with the Pere Marquette’s request). If one upscale hotel is good for downtown, two much be better, right?
I don’t recall how much money this new tax approach was alleged to be able to support, but I’m having difficulty believing that the volume of hotel guests will rise enough (nor that the additional revenues from auxillary services – such as restaurants, etc.) will be enough to cover the total costs of all the bonds at the rate we’re going.
If memory serves me right this same hotel did upgrades just few years ago. Why do they need more? Why do we need more? Now the city and the county are going to own two hotels, a museum and restaurants, etc. Why do we need any private companies at all? The city and county seem perfectly capable of financing and running everything around here. This slippery slope into debt is really turning into a roller coaster ride.
SD: I think you have been sampling the truth serum again! 🙂 Hooray for the voice of reason and not wanting to take on any more debt! 🙂
Here a tax, there a tax, read about Obama’s ‘on the table’ idea to tax employee health plan benefits — what next?
“I’m sure there’s a logical explanation.” You can bet there’s a logical explanation. You can also bet the public will never know it. You’ll win both bets.
“I’m sure there’s a logical explanation.” The purpose of the city council / powers that be, is to reward their friends and punish their enemies. You posted the other day about consensus. In this city that is all about remaining in the friends camp. Friends get cash, tax breaks, new parking garages, ect, ect, ect. Enemies get run through the ringer and have their projects shot down. I know the camp I would like to be in. Lets all yell with Diane, “Wow what a GREAT museum, Wow check out the new Pere, Wow park is part of parking lot, tearing down homes to put “park”ing lots on main will sure be nice. Boo Holiday Inn redevelopment.”
Could this just be prelude to a lawsuit? Ask the city for similar terms as was given to the other hotel. If the city doesn’t match it then sue for anti-competitiveness?
That’s a pretty broad brush ya got there Michael. And if you put words in my mouth can you make sure I spoke them first? 😉
I have to agree with CJ on this. What concerns me is the $6 million dollar loan which Firefly may or may not default on. They are after all laying people off left and right. Couple that with the failed Mid-Town Plaza which we, the taxpayers, are going to have to pick up and no wonder our dear council persons are concerned about this $8 million dollar deal. Too late when you got $40 million committed already though. If this goes through, I’m going to apply for a kitchen remodel loan from the city..
Diane. Don’t be to hard on Michael. After all, on the blogs, you have been one of the biggest cheerleaders for the museum, the Zoo, and the Pere project. Funny though, you don’t seem to mind we the public help finance those things but shriek when the school district wants funds.