Potential mayoral candidate criticizes handling of Urbana hotel renovation

URBANA — A potential candidate for mayor says the city has fumbled a $1.45 million renovation of the Urbana Landmark Hotel, while incumbent Mayor Laurel Prussing said her challenger "has not done his homework."

Democrat Les Stratton said the initial 2010 agreement to reimburse hotel owner Xiao Jin Yuan for renovation costs up to $1.45 million over a number of years was "not awful."

But as the renovation progressed, the opening was delayed and then scaled back, and now Stratton worries the hotel, formerly the Lincoln Hotel, will cost the city more than originally anticipated.

"I don't think it's ever a good idea to bet $1 million with the expectation to make $200,000 or $300,000 off of it," said Stratton, a retired Urbana Public Works operations supervisor.

The original agreement between the city and Yuan had the city reimbursing Yuan for renovation costs up to $650,000 before the hotel's opening. The city would make $200,000 available for reimbursement annually for four years after the opening.

All of this money would come out of a special property tax fund that is set up specifically for improvements to the downtown Urbana area. The reimbursements would be considered a loan until Yuan had the hotel open for at least two years, and at that point, the city would forgive his debt.

The upside for the city was that renovating and reopening the hotel would increase city revenues in the long run. City officials expected that hotel-motel tax revenues, extra property tax revenues and the residual benefits of more traffic in downtown Urbana would have the city's costs paid back over nine years, and by the 10th year, officials would start to see a $240,000 annual increase in revenues.

The city council approved that agreement in 2010 with the understanding that Yuan would start booking rooms in November 2011. That deadline passed without an opening.

Yuan and city administrators came back to the city council this year to ask for more time. They made $400,000 more available for pre-opening renovations, bringing the total to just more than $1 million. Under the original agreement, that amount would not have been reimbursed to Yuan until after the hotel opened. The additional $400,000 from the original agreement remains available for reimbursements after the hotel opens.

The second agreement also gave Yuan until the end of December to open the hotel, and he said that he could be ready for a "soft opening" within the next few weeks.

Stratton said he isn't sold — when the hotel opens this fall, only 45 guest rooms will be ready for guests. There will be no bar, restaurant or conference center until Yuan has more time for renovations.

By Stratton's estimate, that puts the city $600,000 in the hole by the 10th year — not $240,000 in the black like city officials anticipated.

"They need to make sure that Mr. Yuan knows that his clock can't start until all the things he has promised are in place," Stratton said.

He said the city should not agree to start the two-year window for forgiving Yuan's loan until all the rooms and amenities in the hotel are available to guests. If that happens within the next two years, Stratton estimates, the city might get its money back in the long run like originally planned.

"Until he gets the restaurant open and the bar open and the other portion of the 128 rooms open, he's working on his own dime," Stratton said.

But Prussing said Stratton has it wrong. The two likely will face off in a Democratic primary election in February.

"I think X.J. (Yuan) has done a great job," Prussing said. "He's opening the hotel."

Yuan said on Monday that he has completed city inspections and is just awaiting certification that it's fit for occupancy. He plans to open the bar soon, he said, and thinks the full 128 rooms, restaurant and conference center will be open within 12 months.

In the meantime, the ballroom can be used for weddings or meetings, and he's opening a space for a karaoke dance club.

"If we can bring people in here to fully utilize the 128 rooms, you can imagine how much more foot traffic that will bring to downtown," Yuan said.

Over the past few years, city officials have held up the Lincoln Hotel renovation and reopening as a boon to downtown Urbana and a historic preservation project. Yuan ran into more problems than he anticipated when he bought the property two years ago, Prussing said, and the agreements to accommodate him and the city have been reasonable.

"Redoing a hotel that's almost 100 years old is a big undertaking," Prussing said.

Renovations have included roof replacement, installation of marble floors and the addition of the canopy entrance from Race Street and the adjacent breakfast area. Yuan has also installed drains and sump pumps to stop flooding on the lower level.

Yuan gave city officials a tour of the hotel several months ago, and they said they were pleased with what they saw.

"This hotel's going to open," Prussing said. "And my impression is that Les Stratton hasn't done his homework."

The filing period for the Feb. 26, 2013 primary is next month, according to the Champaign County clerk's website.

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Sid Saltfork wrote on October 22, 2012 at 10:10 pm

Governor Jim Thompson secured the deal for Bill Cellini to create the Renaissance Hotel in Springfield.  Later, the hotel went belly up.  Cellini had walked away with a chunk of money.  Thompson got a chunk of money for "campaign donations".  The State of Illinois ate the loss. Governmental backing of businesses especially hotels should be scrutinized.  Taxing others to pay for an individual business / government partnership is not a good government practice.  Whether Mr. Stratton is right in his calculations, or not; it remains a bad investment.  Time will tell it to be true.

EL YATIRI wrote on October 23, 2012 at 7:10 am
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I agree with Sid.  This hotel deal doesn't pass the "sniff" test.  If it is such a sound investment why does the public sector need to get involved?

cretis16 wrote on October 23, 2012 at 3:10 pm

This is almost as bad as the spend-u-lous. Still waiting for all those new businesses , and companies to open on the expanded Windsor Road, you remember the one where they put the huge sign up about our great move forward?

This is  a complete waste of money...if this hotel project is so good, let the buyer fund it himself? That's a lot of money to be passing around in hopes that we get something back.

Too bad our mayor does not recognize these funds as out of our pockets. Hold the owner to the contract at the very least....

jim1 wrote on October 22, 2012 at 10:10 pm

he is right the hotel will be a disaster just like it was when the last two owners had it we will probably do a face lift but the mechanicals of the building have never been right since carsons  closed the place in 1975 they felt that there was no way to justify the money spent to make it right again it was a bad idea for urbana to get involed everybody knew this was a losing proposition

 

rsp wrote on October 22, 2012 at 11:10 pm

I could use a refresher on the history before Mr. Yuan bought it. It's been too long. It would be great if you guys could get a photographer in there so we can see it. 

Dan Corkery wrote on October 23, 2012 at 5:10 pm
rsp wrote on October 24, 2012 at 9:10 am

I had seen one of those but missed the others. Thanks for the links. The pictures help. I don't think people realize how much work the place needed. Hopefully the deer and birds will stay down. One would have been enough but a whole herd?

Local Yocal wrote on October 23, 2012 at 7:10 am
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I'm concerned the owner of the hotel will be desperate to make his money back in a hurry and the price of the rooms will be unaffordable to the average traveler. Because the citizens paid for much of this renovation, maybe anyone with an Urbana residency should get a half-price deal for a room?

Prussing and Stratton need to be reminded, it is NOT "the Government's" money they have loaned or given. It is the taxpayers' money.

theEd-itor wrote on October 23, 2012 at 9:10 am

I do not have the time to list all the things the current mayor has done. Nothing really good comes to mind and not so good?  Well I have better things to do. However, I had the privledge to work with Mr. Stratton and he would make a fantastic mayor for the city of Urbana. It has been time for change since Ms. Pussing took her seat behind the mayors desk.

Mr. Stratton would make a wonderful and honest mayor for Urbana!

rsp wrote on October 23, 2012 at 9:10 am

http://urbanaillinois.us/posts/2012/06/historic-urbana-landmark-hotel-re...

The pictures there are small. From previous articles I was able to find out that the building sat empty for over 20 months prior to this purchase. At that time the roof leaked and there were pipes that leaked in the building. The roof has been replaced, pipes fixed, hardwood floors restored, marbles floors have been installed, drains and sump pumps have been installed, flood damage repaired. It's also been made handicap accessible with the elevator fix. He's also put in the wifi most guests would expect and probably upgraded the electrical. All those new flat screens would need it. A lot of that work couldn't be started until the roof was finished to keep out the water. 

If the building had continued to crumble, to the point of being demolished, what would that corner of Lincoln Square look like?

wayward wrote on October 24, 2012 at 9:10 am

Subtle but important distinction -- the infamous Ramada Renaissance in downtown Springfield was new construction.  The Landmark Hotel in Urbana is an attempt to clean up something that's already there, and could turn into a bigger problem for the city if it continued to sit empty and deteriorate.  Cellini got a sweet deal because of his political connections.  I'm guessing Yuan is getting support from the city because he's tackling a potentially major headache for city government.

Sid Saltfork wrote on October 24, 2012 at 12:10 pm

Time will tell if it was a good investment, or not.  If it costs the city $600,000, and ends up having to be demolished later; it was not a good investment.  If it succeeds in the competitive hotel business in the twin cities, it was a good investment.  It all depends on whether people will stay there; or stay in the hotels off of the interstate, and closer to campus.  How many hotels are being considered with downtown Champaign, and south Neil?  How many existing hotels are operating at capacity?  Saving a landmark, and running a competitive business are two different things.   

rsp wrote on October 24, 2012 at 5:10 pm

Hotels are running at capacity every time there is a big event in town. He's listing his rooms at $79 for a double with a pair of queen-sized beds, flat screens, and wifi. Keep in mind this is right in walking distance to both of the courthouses. 

Sid Saltfork wrote on October 24, 2012 at 7:10 pm

Well; the out of town witnesses, attorneys, and criminal's family will have somewhere to stay within walking distance of court.  The room price is good.  It is one way to compete with the other hotels.  I hope he does well.  My point is that preserving the past, and making a buck are two different things.  Downtown Urbana has tried to maintain it's ambience, and be profitable at the same time.  Several things have been done over the years; but the only attractions are the two courthouses.  Let's face it.  It is not downtown Champaign, or Campustown.  Is it preservation, or profit?  Time will tell. 

Speaking of downtown Champaign; is it not time to get over the concept of two cities with one street dividing them.  Why duplicate police departments, fire departments, park districts, city works, and administrators?  One city could save considerable money just on the administrative costs.  That savings would allow for increasing public safety in law enforcement, and firefighters.  One park district would save money also.  Whether it would be called Chambana, Shampoobannana, or Busey-Carle; it would save a ton of money, and end the competitive spitting contest.  I lived in Urbana for close to 30 years.  The city officials always found some cause to lose money on.  The prevailing winds in the fall are from the west, northwest (Champaign); but Urbana had to beat Champaign by passing a no leaf burning ordinance five years before Champaign did.  The result was bagging leaves for city pickup at a cost while enjoying the smoke blowing from Champaign.  Urbana had to have section 8 housing one block off of Philo Road.  The result was stores eventually closing along Philo Road; and higher, and higher crime in what was once good neighborhoods.  Instead of hiring more police, Urbana erected more statues.  Go figure.  Urbana knows how to lose money.

ROB McCOLLEY wrote on October 25, 2012 at 5:10 am
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Sid, I do believe you've had some beers. 

 

Generally, I'm in agreement. I especially agree that the two cities could cut costs by reducing (combining) to a single fire protection district.

 

Eventually (perhaps not in our lifetimes) the need for fire protection will be drastically reduced if not eliminated (non-flammable materials, sprinkler systems). As it stands, we have too many firemen on call at all times.

 

Yes, it seems handy when there actually is a fire. But the costs outweigh the benefits. It's not a loss of life issue. It's a loss of property issue. And property can be reimbursed by insurance at far less than the cost of maintaining the various fire departments at current levels.

 

The jobs could easily go elsewhere within the public payroll. We need more police, and more nuisance abatement/enforcement employees.

rsp wrote on October 25, 2012 at 11:10 am

I'm not sure if my neighbor would agree with you. When his heart stopped it was the fire department who responded. They saved his life. It's the kind of call they respond to every day. Putting out fires is only one of the many things they do. So if buildings are less flammable, and we need less firemen, who will do all the extrications they do? The property maintainence people? 

ROB McCOLLEY wrote on October 26, 2012 at 12:10 pm
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I'm pretty sure you did just agree with me.

rsp wrote on October 26, 2012 at 5:10 pm

No, I listen to the scanner. Firemen are on the go all the time. Maybe you should spend some time with them and find out what they do. You seem to suggest they sit around playing cards. 

ROB McCOLLEY wrote on October 27, 2012 at 5:10 am
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What does it have to do with pumper trucks?

ROB McCOLLEY wrote on October 25, 2012 at 2:10 am
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I will vote for anybody not named Laurel Prussing. I will encourage my friends to vote for anyone not named Laurel Prussing.

 

Her arrogance, her inattention to detail, her inability to use computers (much less fathom the contemporary landscape of revenue potential); these are reasons aplenty.

 

I don't dislike Laurel Prussing.  As a grandmother and pension collector, she's fiesty and argumentative in just the way you'd want a grandmotherly pensioner to be.  As an ideas person, a person who can move Urbana forward in the 21st Century ... 

 

People in their seventies are not famous for their ability to adapt to new ideas.

Sid Saltfork wrote on October 25, 2012 at 10:10 am

Considering running for election again?  Make sure you hug the Urbana, City of Trees, brand. Don't think outside of the box until your elected.

Two cities divided by one street is inefficient.  One raises taxes on gas; and the other quickly follows.  One resurrects a downtown area; and the other continually struggles to do the same.  One builds a swimming pool after the other has created one.  One gives tax breaks to local businesses relocating; and the other one competes to do the same.  One has statues; and the other one has to have more.  Both cities compete against each other while only one street divides them.  For this day of age; the concept of twin cities is absurd, and expensive.  

By the way; you say that you do not dislike Laurel Prussing, but your comments are rather snarky. 

ROB McCOLLEY wrote on October 26, 2012 at 12:10 pm
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No, I think her personality is great for a lot of purposes. But she's too shortsighted to play the lone obstinate curmudgeon. 

If she had original ideas (the "vision thing") it would be okay for her to ignore the sentiments of her constituents, to lead. But she doesn't have ideas.  She's a bureaucrat.

She's a bully with power. "Goat lady" is merely the best publicized of those who've been pushed around, maligned etc.

Sid Saltfork wrote on October 26, 2012 at 1:10 pm

Well, you have made your opinion of her clear.  I hope "people in their seventies" are not offended by your comment if you decide to run for election as mayor in the future.  Maybe, they will have forgot the comment by that time.  You know how old people forget things; but remember some.

welive wrote on October 25, 2012 at 8:10 am

as a downtown urbana resident i watched them tear down the old houses behind the goodyear for hopes of a new devolpment.And i am still waiting.i feel as much of urbana feels please just tear this eyesore and mony pit down and rebuild.Please save the speach of it being such a historic place bottom line it is old and junk.I dont want my tax money going to this cause do you? It will be closed in less then 3 years.There is nothing to do in Urbana. . . . .

rsp wrote on October 25, 2012 at 10:10 am
welive wrote on October 25, 2012 at 1:10 pm

like you said nothing to do in urbana lol nice post however.no one will stay at this hotel.a waste of time and money.

 

syzlack wrote on October 26, 2012 at 10:10 am

And what is there to do in downtown Champaign except drink, or eat in mediocre restaurants?   Well, there is the Art.  A small art movie theater in U would be nice.  Still, have you tried to get into the Black Dog lately?  An entrepreneur who could make half decent BBQ could open a joint and succeed just on the Dog's overflow.

youlikeroses wrote on October 25, 2012 at 11:10 pm

very few hotels survive in small markets that don't belong to the major hotel chains... there is no chance this hotel makes it. they should have done it right and sold it to a marriott or another professional, successful management company.

 

this guy can't balance his renovaton budget or keep his timelines... how is he supposed to manage a hotel?

syzlack wrote on October 26, 2012 at 10:10 am

Those chains don't run these kinds of hotels.  It's going to be boutique kind of place surviving, if it does, on the courthouse business and U of I visitors.  It used to be the place to go for a good meal, way before Jumer's wrecked the place, but that was a different world.  Still a good local restaurant, something along the lines of Milo's, in that location would seem to be a winner.  Plus a bar for all the lawyers hanging out downtown.

Sid Saltfork wrote on October 26, 2012 at 11:10 am

Maybe; a barber shop, shoe shine stand, steam room, and magazine kiosk along with the good restaurant, and bar?  Something along the lines of the Sherman House in Chicago.  A tailor shop, and a shoe repair shop would be necessary also.  If only Carsons, or Marshall Fields would come back to the iconic mall......   The neighborhood was beautiful with old homes brightly painted.  The movie theater ran matinees.  There was a shuffle board table at the Embassy.  Main street had hardware stores, drug stores, and occupied buildings.  Those were the days.

Yes, "that was a different world".  Yesterday is over.  Today is now.