Proposed downtown project a symbiosis of MTD's, developer's plans

Proposed downtown project a symbiosis of MTD's, developer's plans

CHAMPAIGN — In November 2015, developer Hans Grotelueschen announced ambitious plans for a $95 million project at Washington and Walnut streets.

A few months later, Champaign-Urbana Mass Transit District Managing Director Karl Gnadt reached out to Grotelueschen to discuss the MTD's long-planned expansion of the Illinois Terminal, not wanting to get in each other's way.

"We had two really potentially significant projects, and I thought it would be good for us to not step on each others' toes," Gnadt said Tuesday. "As that conversation progressed, it just became really obvious to both of us that there were a lot of elements from our original projects that married one another really nicely."

On top of that, Grotelueschen's project had run into some "hurdles," Gnadt said.

"When you've got one project with difficulties, and you've got another project that has a big wow factor to it, it just makes sense," Gnadt said.

One of those difficulties: moving the Orpheum Children's Science Museum to a new building behind The News-Gazette to make way for conference space. At the time, Orpheum board President Perry Morris supported the plan.

However, "while the original proposal was intriguing, the perceived benefits to the museum were diminishing," Morris, now vice president of the Orpheum, said Tuesday in an email. "The Orpheum Children's Science Museum is very fond of our home in the historic Orpheum Theatre, but we are not averse to moving, as additional space for the museum would benefit our patrons."

Grotelueschen downplayed this difficulty Tuesday.

"We had ideas about what to do with the Orpheum, we had ideas about how to include it and those didn't materialize," he said.

Instead, he said the decision to move the project south had more to do with the "efficiencies and synergies" with the MTD expansion.

This project officially unveiled Tuesday includes plans for a hotel and conference center topped with high-rise apartments, a standalone office building, additional bays for the MTD and intercity buses, and more office space at the Illinois Terminal.

The new site south of the Illinois Terminal has room for a 5,000-seat sports facility that could be used as an ice arena. That is dependent on the University of Illinois athletic department deciding to make hockey an NCAA Division I sport and then deciding that it wants to play in this proposed arena.

Last month, UI Athletic Director Josh Whitman announced that Illinois would begin studying the feasibility of adding hockey as a varsity sport.

UI athletics spokesman Kent Brown said Tuesday that the study won't begin until mid- to late-August.

"We don't have anything to add at this point," Brown said.

Negotiations ongoing

The new project lacks many specifics at this point, including a detailed timeline and budget.

If everything goes according to plan, construction crews could be breaking ground next summer, Gnadt and Grotelueschen said.

"That's pretty aggressive, so I don't know that we'll be able to do that because we have all the architectural and engineering work that needs to be done," Gnadt said. "And we have lots of agreements that need to be worked out between the city and MTD and Hans and other partners that we're still talking to."

The MTD board will discuss the proposal later this month, and the Champaign City Council will review it at its Aug. 22 meeting.

Grotelueschen said he's still working on buying the 8 to 10 acres of land south of the Illinois Terminal and east of Neil Street where the project would be located. The city already owns some of the parking lot space on this land.

"We're under contract with some of it, and we're in a due-diligence period, which means we have a time period to explore what we want to do, and the magnitude, and we're still in negotiations for some other businesses," said Grotelueschen, of Prairieview Park LLC, who also developed the Hyatt Place Hotel in downtown Champaign.

Knight: City here to help

As for costs, Grotelueschen said he doesn't have a final number.

"If we don't have an event center, then it will probably be about the same" as the $95 million project, Grotelueschen said.

It will be funded with a mix of private dollars, tax-increment-finance district funds and federal funds allocated to the MTD.

"I have equity partners that are interested in this project," Grotelueschen said.

Champaign Planning Director Bruce Knight said the city will likely help with some of the infrastructure for the project.

"It's in a brand-new TIF district. That means we have financial tools to work with to help support the project," he said. "And we're probably going to be involved in helping replace parking, building structured parking and helping deal with the infrastructure needs for the project. But all of that is still subject to negotiations and finalizing a developer agreement."

For the MTD, Gnadt expects to pay in the neighborhood of $10 million, with much of that coming from federal funds.

"If it is $10 million that we're putting in, I'd be looking at $8 million in federal funds and $2 million in local funds in our local capital reserve fund," Gnadt said.

Q&A: Development details

What's included in Hans Grotelueschen's new proposal?

➜ An expansion of the Illinois Terminal.
➜ 175-200 hotel rooms.
➜ 200 apartment beds.
➜ 100,000 square feet of office space.
➜ Retail space on the first floor.
➜ More parking.

If the proposed hockey arena is built, what would it come with?

➜ About 5,000 seats.
➜ Three sheets of ice.
➜ Four full-size basketball courts.
➜ 15 volleyball courts.
➜ 24 wrestling mats.
➜ A public ice skating rink.

Where will this be located?

On 8 to 10 acres of land between the railroad tracks to the east, University Avenue to the north, Springfield Avenue to the south, and Neil and Walnut streets to the west.

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787 wrote on July 19, 2017 at 7:07 am

Does it bother anyone else, that the MTD collects millions and millions of dollars every year from the property tax bills of hard-working people... only to become a real estate developer?

How far off course will this leviathan be allowed to go, before the brakes are applied?

This is NOT what was envisioned when the MTD was organized decades ago, on the backs of every property owner in town.

If Gnadt wants to build an empire downtown, he needs to do it with money OTHER than what is collected through real estate taxes.   The public shouldn't be expected to fund his grandiose dreams.

IlliniwekMerica wrote on July 19, 2017 at 8:07 am

I agree to a point. If the Illinois terminal needs an expansion regardless, then $10MM really isn't that much money, as far as expansion and office space are concerned. Even better if it can be used as part of an overall project that will bring a lot of good to downtown Champaign. Now, whether they really need an expansion is beyond me. 

It sounds like the $95MM proposed by Gnadt is just the hotel/ office/ retail/ convention center piece of this and not the athletic building piece. If the MTD is providing 10% of the capital, it's reasonable to assume they'll be using 10% of that office space/ expansion area of the Illinois terminal. 

 

rsp wrote on July 19, 2017 at 8:07 am

The MTD is talking about using money that was set aside for capital improvement projects. Capital improvement projects are something every taxing body does, including the setting aside money to pay for it. It's things like replacing the roof, replacing windows or the heating system if it fails.

In this case they have been planning to expand the Illinois Terminal to accomidate the number of buses and passengers who come through every day. With careful planning they can make the building pay for itself, with the leasing agreements for the other levels. It's a safety issue with the amount of traffic that comes through.

Normal everyday business.

Orbiter wrote on July 19, 2017 at 1:07 pm

Symbiosis?  How is it a symbiosis? That doesn't even make sense.  "Plans" cannot form symbioses; even with extra glue and duck tape.  Maybe what our writer meant was "synthesis"?

 

There are plenty of online dictionaries and thesauri.  Mr. Zigterman should check them out.  :)

BruckJr wrote on July 19, 2017 at 3:07 pm

I'd guess that someone other than Mr. Zigterman wrote the headline.

Niko Dugan wrote on July 19, 2017 at 7:07 pm
Profile Picture

Orbiter,

Thanks for your comment. Mr. Zigterman did not write this headline; it is standard practice for copy editors, not reporters, to write them.

I wrote this particular headline, and I eschewed "synthesis" — defined by the Associated Press Stylebook's preferred reference book, Webster's New World College Dictionary, as simply "the putting together of parts or elements so as to form a whole" — in favor of "symbiosis" — defined as "the intimate living together of two kinds of organisms, esp. if such association is of mutual advantage" — to make it clear that the new development represents not only the combination of two entities' plans but also their intent to create something that will be mutually beneficial.

I'm sorry if that did not come across well.

Thanks,

Niko Dugan
online editor

increvable wrote on July 19, 2017 at 5:07 pm

Would this project require that the Inman Hotel and Illinois Traction Station be knocked down or would they work around those buildings?

aantulov wrote on July 25, 2017 at 7:07 am

The area mentioned, is that where the city of Champaign offer the Common Ground Coop such a paltry tax incentative that lease on a project that would have brought 100 full time jobs had to be considered elsewhere?

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