Downtown Champaign boutique hotel still a go, but developer changing

Downtown Champaign boutique hotel still a go, but developer changing

CHAMPAIGN — After some delay, the city is moving forward with its boutique-hotel project — this time with a different developer.

Construction of the millennial-focused Hotel Vib (pronounced "vibe") by Best Western was approved by the Champaign City Council last September. It will occupy what is now a vacant parking lot downtown at 401 N. Neil St.

On Friday, the city publicized official plans to part ways with the original project developer — Chris Keller with Grasshopper Hospitality LLC in Effingham. The city council will review those plans Tuesday.

Rob Kowalski, the city's assistant planning and development director, said the decision to split stems from Keller failing to close on the property in November.

"We investigated to find out what the holdup was," Kowalski said. "He was unable to produce the documentation necessary to show he had the financing available to build a hotel."

But, Kowalski said, the project's original terms are staying the same: City government isn't contributing any money, and 100 spaces of hotel-patron parking are still being leased from the top floor of the Hill Street parking garage.

Kowalski said the city doesn't want to redo the project terms because it already considered them as the best possible option.

Grasshopper Hospitality, which Keller formed with Dave Mastio for this project, has disbanded. But Mastio, who originally proposed the project and plans to stay involved, presented a new developer to the city.

Stonegate Properties of Hoffman Estates is set to take over the project if council members approve. Kowalski said a council vote is slated for the spring, with property closing set for summer and construction starting in fall.

Originally, construction was planned to start Jan. 1. But Kowalski said the estimated construction end date is staying put at the end of 2019.

"As far as a reset goes, I think that's reasonable," he said.

City staff have been meeting with Doug Altenberger, president of Stonegate Properties, and Kowalski said he's feeling good about the partnership.

"We reviewed the agreements and understood (Altenberger's) capacity and ability to do it," Kowalski said. "He provided that he'll look for local contractors and architects to design and build the building."

But one thing the hotel may lose is its Hotel Vib branding, which wasn't required in the original project agreement. The brand is high-tech, small rooms that are close to urban environments.

Altenberger is exploring his options with other brands, according to a city report. Despite that, Kowalski said the plan is still to have a boutique hotel that attracts younger customers.

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