Urbana officials confident about hotel's future

Urbana officials confident about hotel's future

URBANA — The Urbana Landmark Hotel has been closed for more than two weeks, but city officials remain optimistic about its future.

Community Development Director Elizabeth Tyler said Urbana is working with a potential buyer of the former Jumer's Castle Lodge, which has been shut down since April 19 because of a fire alarm system issue.

The prospective buyer has a contract with developer Xiao Jin "XJ" Yuan, who last July put the three-story, 128-room hotel up for sale. Asking price: $5.4 million.

The two parties remain in the due diligence process, said Tyler, who declined to comment further on details, including the potential new owner or the intended use of the site.

"The city would be interested in having further improvements made to the hotel and bringing it back to its potential," she said.

In 2010, Yuan spent $600,000 for a building that opened in 1923 as the Urbana-Lincoln Hotel. In 1965, what had been a locally owned hotel for decades was purchased by Carson Pirie Scott & Co., then sold to the Jumer Hotel chain in the 1970s. Jumer's sold it in 2001, and the hotel has had a series of short-term owners since.

Yuan made major renovations to the hotel, city officials say — the roof, the HVAC system and the plumbing, among other things — before deciding last summer to sell.

"The roof, the HVAC, the plumbing, the electrical, that's all been stabilized. So it wouldn't make sense to tear it down. Most of the structure is stabilized now."

The problem with the fire alarm system has been identified and could be implemented fairly quickly, Urbana Fire Chief Brian Nightlinger said.

Still, the hotel has had seven maintenance-related false alarms since Jan. 1, already exceeding the city-allowed limit of four per year and resulting in three $500 fines.

"And, we're not even halfway through the year," Nightlinger said.

Nightlinger said the inspector will evaluate the entire system before it is approved, but Tyler was confident the problem wouldn't be significant enough to hold up a potential deal.

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AltoonaSue wrote on May 08, 2016 at 9:05 am

Before the City Council approves any financial incentives, I really hope they insist on a comprehensive market study of the need for another hotel of this size. With the IHotel, Hyatt, and Hilton, not to mention all of the recently constructed mid-sized hotels in the area, it's very difficult to see how the market could support this.