Gateway Studios could be headed for demolition

Gateway Studios could be headed for demolition

CHAMPAIGN — A long-vacant hotel at one of the most visible entrances to Champaign could be torn down this fall if the Champaign City Council gives its blessing.

City staff has asked the council to consider demolishing the former Holiday Inn at the Neil Street interchange with Interstate 74.

Here is the memo to the city council about the property.

The complex most recently operated as the Gateway Studios apartments but has been vacant since 2009 when the city condemned the structure.

The council will be asked at a study session Tuesday whether to proceed with demolition or to have staff come up with another solution for the complex. The meeting is scheduled for 7 p.m. at the City Building, 102 N. Neil St., C.

"Property conditions have declined precipitously" at the complex, posing threats to public safety, a report to the council states.

Concrete balconies and staircases are cracking, the roof has numerous leaks and mold is growing on interior walls. The old swimming pool is partially filled with stagnant water and debris.

The back parking lot has become a site for illegal dumping, and homeless people have sought refuge in the complex. Plus, fires have been set there twice, once in an exterior courtyard and another in the atrium.

Demolition is expected to cost between $750,000 and $1.25 million and theoretically could begin as soon as Oct. 17. But an asbestos inspection must first be conducted.

The council must also consider what to do with the property if the complex is demolished.

A June 2010 appraisal indicated the market price of the land was $1.2 million. The land could be sold to an outside party either at a sheriff's sale or by the city, if the city is high bidder at the sheriff's sale.

It's also possible the city might want to "guide how the site is developed," given its prominent location, staff said.

If so, the city might want to seek a request for proposals — but developers could seek incentives from the city, raising the possibility the city might not fully recoup demolition costs.

The property is owned by Donovan Acres, a limited liability company, with Phyllis Seehausen listed as a trustee of the trust that is the company's sole member. In May, the city sought a court order for demolition, to which Donovan Acres agreed.

City staff has proposed the city pay for the demolition with money from the municipal Urban Renewal Fund.

Money in that fund is largely committed to redevelopment of the Bristol Park neighborhood in north Champaign. That money will be needed in 18 months, so it's important the city recover the costs from the Gateway Studios demolition, the report from staff said.

The Holiday Inn opened at 1505 N. Neil St., C, in the 1960s and operated there until the mid-1990s. In succeeding years, the hotel was known as Champaign Inn, Howard Johnson's and finally Premier Inn.

In 2006, it was converted to Gateway Studios. The complex includes four two-story buildings and one three-story building, for a total of 208 guest rooms.

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