Urbana considers revising agreement over downtown hotel

Urbana considers revising agreement over downtown hotel

URBANA — City officials hope a revised financial agreement with the owner of the historic Lincoln Hotel will help get its doors open by the end of the year.

City council members will meet as the committee of the whole Monday June 11) at 7 p.m. in the Urbana City Building, 400 S. Vine St., to discuss the details of new rules on more than $1 million in city funds going to help owner Xiao Jin Yuan renovate the landmark building and start booking rooms.

The original $1.45-million agreement called for the Lincoln Hotel to open by Nov. 1, 2011. But because of "the poor condition of the building, the unexpected scope of the necessary renovations, complications with contractors, and other issues, Mr. Yuan is still working towards opening the hotel in late Summer 2012," according to city documents.

City administrators are now hoping council members agree to make some changes to the original agreement to avoid the project's failure.

The original November 2010 contract made $650,000 immediately available to Yuan for improvements to the hotel that needed to be completed before he could open its doors. By March 2012, Yuan had received all of that money, which was used for items including roof work, elevator work, entrance upgrades, electrical upgrades, HVAC improvements, cable television and high speed internet upgrades and hotel lobby upgrades, according to city documents.

That money was classified as a loan, but city officials planned to forgive all of the debt upon the hotel's opening.

City officials also planned to reimburse Yuan for renovation costs up to $200,000 each year for four years after he started booking rooms.

Under the new agreement, the loan amount would be upped to $1.05 million to allow renovations to continue in advance of the scheduled opening. That total includes the original principal amount of $650,000 plus the additional $400,000 the city had initially budgeted to assist Yuan in the first two years after its opening.

Like the original agreement, the city would forgive the loan. But this time, it will require that Yuan operate the building as a hotel for at least two years, and that the opening date be no later than Dec. 31.

The new agreement would maintain the plan for reimbursing Yuan up to $200,000 each year for the second two years.

Yuan bought the Lincoln Hotel in 2010 amidst a fight over its landmark status. Part of the agreement with the city was that he support its designation as a local landmark, which the city council confirmed in December 2010.


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Orbiter wrote on June 11, 2012 at 8:06 am

Terrible that the city is pouring money down this rat hole. That anyone would consider this hideously ugly building, with its distasteful and phony hybrid "Tudor" styling, to be worth saving is a joke. Its appearance clashes with the feel of the neighborhood and fools nobody (except, apparently, city councilors eager to spend taxpayer dollars).  The claim of historic significance is dubious at best.  The hotel ought to be completely razed, lest it become a historic waste of money.

cretis16 wrote on June 11, 2012 at 11:06 am

How much more money can the city give away? You;ve pretty much ran our property taxes out the roof, pumped up the gas tax and had brainstorming sessions on how to get yet more fees out of the taxpayers. If this is a worthy project, let the builders exercise free enterprise and do the project themselves. Why should grandma minnie have to be taxed to pay for such a waste?

serf wrote on June 11, 2012 at 8:06 am

Wasn't the mayor fighting one of the employee's unions about having no money for raises a while back?  Priorities, priorities....

Local Yocal wrote on June 11, 2012 at 9:06 am
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Everyone is entitled to their own taste in architecture. I happen to have grown accustomed to the improbable Disney-esque castle jutting out of the Mall. Many surrounding businesses, especially inside Lincoln Square, are crossing their fingers hard that the hotel's opening will improve foot traffic in the downtown Urbana area. I remember an indoor pool and some great banquet facilities there, as well as a great dining hall many celebrities frequented after a show at the Assembly Hall or Foellinger. It's a worthwhile project, for who needs another parking lot and the six months of downtown chaos to make the parking lot, but the building was horribly neglected and the estimates for its repair were unforeseen. The bigger question for me, is after the city provides these extraordinary tax benefits, will the hotel actually fill up? I can't imagine the owner selling room rates that are affordable for the average traveller. Maybe Yuan's efforts will be rewarded later with a huge corporate hotel chain buying the building from him.

sameeker wrote on June 11, 2012 at 10:06 am

Will they socialize the profits like they are the costs and risks?

MadGasser wrote on June 11, 2012 at 11:06 am
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I usually don't complain about what our city 'fathers' do, but this is ridiculous. Like another person said this place needs, along with the 'mall', to be razed and in its space a new, better downtown needs to emerge. The city 'fathers' who allowed the downtown to be razed and allow these two worthless buildings (hotel, mall) werer clowns.

Sid Saltfork wrote on June 11, 2012 at 11:06 am

serf;  You make a good point.  Urbana has money for renovating "historic" buildings, statues, pool features, roundabouts, and other assorted "wants"; but no money for employees.  Urbana has a history of getting federal, state, and county money to assist with paying for it's "wants".  I lived in southeast Urbana for close to 30 years.  There were grocery stores, hardware stores, and other businesses along Philo Road.  The residents maintained their property.  Crime was petty little things.  Now, all that has changed.  Urbana fought against a brewery, and other manufacturing businesses over the years.  Now, it shows in their neighborhoods.  Urbana still does not balance it's "wants" versus "needs".  That is Urbana's decision; but I hope no state monies are being used to renovate the "historic" hotel.

Local Yocal wrote on June 11, 2012 at 11:06 am
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When I say, "a worthwhile project", I mean a worthwhile project to save that building. Whether it should come out of the taxpayers' wallet is an open question. It's been a long standing tradition in both municipalities that whatever the developers "need," in the way of reduced taxes, infrastructure amenities, and redevelopment grants; the wealthy developers get it so as to later capture the revenues and benefits of new development and business. It's funny there has never been a published report of a cost analysis longterm benefit to providing welfare to the developers. "Because we gave $200,000 grants to Class A liquor license-holders, this happened..." "Because we spent this many millions in sewage to the periphery of the city, this happened..." If Steve Carter and the nine dwarfs, or Laurel and the nine elfs of Urbana are so certain that it is a wise bet to provide welfare to the corporate developer, then they should produce the numbers that help us fined, fee-d, and taxed little people better understand why the wealthy should get our tax dollars and not the non-for-profit charities that do the hard work of alleviating poverty- or hire more firefighters and police officers as some would prefer.

David Illinois wrote on June 11, 2012 at 12:06 pm

What a waste!  How lucky can the owner be?  And how scammed are the citizens of Urbana?

parkmymeterelsewhere wrote on June 11, 2012 at 1:06 pm

From the northern areas of the Olympian drive/goat farm stretching all the way to the botched windsor road paving with all the roundabouts in between and the grandiose skywalk from the courthouse to the mayor's office we have the wasted time of our local  government employment/wages sucked out of our gas tax/ tanks? 

Orbiter wrote on June 11, 2012 at 2:06 pm

The City of Urbana (or Champaign, for that matter) has no place offering loans.  That is the job of the local banks.  If a hotel will be profitable in Lincoln Square (or at Church and Neil in Champaign) then BANKS ought to make the loans and share the profits. And the risk.  If banks and other lending agencies are unwilling to make the loan because it's too risky, then (1) they are possibly poorly serving their community, and (2) the City should be equally reluctant.  Let the capitalists take the risk, after all they're going to get the rewards.  Otherwise, fine the owner of this decrepit hotel a thousand dollars a month as an "eyesore fee" to encourage development.  That's right, more stick and less carrot.

MSJ66 wrote on June 11, 2012 at 3:06 pm

I am going to LMAO when this thing fails and the buffoons in Urbana have wasted more money on a project that no one would have loaned money to. If these developers have such good business sense and a good business model then they ought to be able to sell the idea to a bank to get THEIR OWN FUNDING. Instead they suck more money from taxpayers and the inept "leaders" of the cities just keep on giving money away hoping a project will maybe lead to an increase in tax revenue. Champaign and Urbana are both jokes with the people running their cities and give aways to PRIVATE developers. Furthermore, looks like they are giving money to a Decatur contractor hiring illegal immigrants?

Sid Saltfork wrote on June 11, 2012 at 5:06 pm

Urbana has no problem using an out-of-the-area contractor.  Urbana has no problem with illegal aliens.  It is a "sanctuary city".  Back in the '50's, Urbana declared itself a non-target to the U.S.S.R. in regard to nuclear weapons.  I am sure the residents of Champaign felt safer. Urbana passed the ordinance against burning leaves five years before Champaign passed a similar ordinance.  Of course; the prevailing winds are from the west, and northwest during the Fall.  You have to have lived in Urbana for a period of time before you can understand Urbana's priorities.  Historic downtown Urbana, and it's adjacent neighborhoods are the biggest priority.  If the clock on the courthouse could be made to run backwards, Urbana would be for it.

Local Yocal wrote on June 12, 2012 at 4:06 am
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If you went inside the courthouse, you would know the clock on the courthouse does run backwards: back to the time of Jim Crow and the deep South.

Sid Saltfork wrote on June 14, 2012 at 2:06 pm

I am sorry; but I have to ask.  What does "Jim Crow and the deep South" have to do with Urbana's decision to fund a developer?

LeslieM wrote on July 30, 2012 at 2:07 pm

I cant believe you all think this is going to fail. I used to work there and I will tell you before the last owner of the building who let it go to ruins it was full. There were always conventions there. Sci-fi conventions and the renaissance conventions were there. Not to mention all the fans for the illini games. All the high school conferences that are held at the assembly hall. I have a feeling that once the hotel is open again it will be back into full swing, as long as they have the pool and the bar open that was promised before but never in order. The last owners were all about profits and not worried about spending the money to fix the hotel. I hope against all that all of you are wrong and when the hotel reopens it brings back all the business to this area.

JoeUrbana wrote on September 04, 2012 at 9:09 pm

I am very confused about what exactly is going on with the Lincoln Hotel.   I have whatched this project move at a snails pace for some time now.   Where is the oversight? who is reponsible for making sure the contracters that Yaun uses are legit.  I mean give me a break.  This guy is coming in out of town with probably no idea of who to hire and what are the results?

The construction project over there looks so mismanaged.