Progress Made in Hotel Negotiations
City officials have made significant progress in negotiating a redevelopment agreement for the Urbana Landmark Hotel -- including reducing proposed city incentives from $9.5 million to $7 million.
Other new provisions in the draft agreement include:
- The requirement that the downtown hotel must be a Hilton Tapestry Collection brand.
- That the hotel must have a full-service restaurant.
- That any future sale or transfer of the hotel must be approved by the city, or else the city loan becomes immediately due and payable.
The city council will get an update on negotiations at 7 p.m. Monday when they meet as the Committee of the Whole at the Urbana City Building, 400 S. Vine St. A formal vote won't take place, as negotiations aren't complete.
Mayor Laurel Prussing negotiated the reduction in city assistance last week in a telephone conference with developer Dionis Rodriguez, a managing principal with Crimson Rock Capital, a New York City-based private investment firm that has negotiated a purchase option on the 128-room hotel.
Prussing said her discussions with Urbana City Council members showed that there was not majority support for the $9.5 million city assistance package that Rodriguez had requested. She proposed $7 million. Rodriguez accepted the offer, but indicated that it may take him some time to find cost savings or additional funding to fill the $2.5 million gap.
The hotel renovation is estimated to cost nearly $19 million overall, plus another $5 million to purchase the property.
Under the proposal, the city would issue general obligation bonds to raise the $7 million, but would not distribute most of the money until after the renovation is complete. With the lower amount, the city could pay off the bonds in 15 years.
“The proposal to redevelop the former Urbana Lincoln hotel into a Hilton Tapestry hotel has created enthusiasm and also a number of excellent questions,” Prussing said. “In response, we have negotiated revisions to the draft proposal and prepared a summary of the changes made so far.”
The Urbana Landmark Hotel first opened in 1924. Designed by prominent local architect Joseph Royer in a Tudor Revival style, it is on the National Register of Historic Places. An addition was added in 1982.