The City of Urbana has concluded that a proposal by developer Crimson Rock Capital to renovate the Urbana Landmark Hotel is not feasible.
Mayor Diane Marlin said the major issues were the large amount of money the city would have to borrow to finance the project, the low level of equity participation by the developer and overall taxpayer risk.
“A vibrant hotel would make a great addition to our downtown, but unfortunately after many months of discussion, we were unable to reach an agreement with this developer on the current proposal,” Marlin said.
The primary hurdle for the proposed $24.5 million project was the developer’s request for $9.5 million in city funds, which would have required the issuance of taxpayer-backed bonds. Total cost to the public would have approached $15 million over a 20-year period. Renovation costs were estimated to be $19.5 million, with the remainder going for the purchase of the now-closed hotel.