Landmark Hotel in compliance; salaries vote on Urbana agenda

URBANA — After a likely candidate for mayor publicly criticized the deal, city administrators say the owner of the Landmark Hotel is still in compliance with the terms of his $1 million deal with the city to renovate and reopen the business.

City council members could hear more about that, and they are scheduled to vote on salaries for elected officials when they meet tonight at 7 in the Urbana City Building, 400 S. Vine St.

Democrat Les Stratton, who says he will challenge incumbent Democratic Mayor Laurel Prussing in a February primary election, said last month that hotel owner Xiao Jin Yuan should be required to pay the city back as it is not expected that the hotel will be in full operation before a Dec. 31 deadline.

Yuan will have received just more than $1 million in reimbursements from the city to renovate and reopen what was formerly the Lincoln Hotel and, before that, Jumer's Castle Lodge.

For now, that is considered a loan. But, assuming that Yuan opens the hotel before Dec. 31 and that it stays open for at least two years thereafter, the city plans to forgive the debt and another $400,000 in reimbursements that officials plan to pay to Yuan during the next two years.

Stratton's criticism centers on the fact that only 45 of the hotel's 128 guest rooms will be ready for occupancy when Yuan opens within the next few weeks.

Yuan said last month he expects those rooms — as well as the bar, restaurant and conference center — to 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.

Stratton thinks Yuan should be considered in violation of the contract if he cannot get the hotel completely open before the Dec. 31 deadline.

But Prussing has said Yuan has done a very good job, and that he ran into more problems than he anticipated when he bought the 89-year-old building.

In an email to the city council, Community Development Director Libby Tyler said that, "in response to comments made by members of the public," city administrators have reviewed the contract with Yuan and have consulted with the city attorney and another attorney.

They agree that Yuan is in full compliance with the terms of the agreement.

Tyler said city staff knew the hotel would open in phases and provided flexibility for that in the contract with Yuan.

"This partial opening was anticipated by Mr. Yuan and by the City of Urbana when it entered into the Redevelopment Agreement and the phasing of the opening was specifically addressed at the time of the Agreement Amendment," Tyler wrote in the email.

In other business, the city's elected officials could get raises beginning in 2014 under a plan they have already supported and could finalize when they meet tonight.

Elected officials are required by law to set salaries before their next term begins, and terms expire this spring for all seven alderpersons, Prussing and City Clerk Phyllis Clark.

Under the proposal, elected officials would not get a raise in 2013, the first year of that four-year term.

But all would receive a 1 percent raise in 2014 and 2 percent raises in both 2015 and 2016.

That would raise the mayor's salary from $61,643 now to $64,774 in 2016. The city clerk would go from $54,246 to $57,002 by 2016 and each alderperson would go from $6,164 to $6,478.

The city council supported the plan when it first looked at it two weeks ago.

In a letter to city council members, Prussing calls the raises "modest increases" and says that city officials need to take a "cautious approach" to setting salaries after property tax revenues declined for the first time in many years.

She wrote that the city's other major revenues are gradually recovering and she expects property values to recover over the next two years.

"We are starting to see some renewed growth in our revenues but still face an uncertain financial situation," Prussing wrote.

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