URBANA — City officials hope a revised financial agreement with the owner of the historic Lincoln Hotel will help get its doors open by the end of the year.
City council members will meet as the committee of the whole Monday June 11) at 7 p.m. in the Urbana City Building, 400 S. Vine St., to discuss the details of new rules on more than $1 million in city funds going to help owner Xiao Jin Yuan renovate the landmark building and start booking rooms.
The original $1.45-million agreement called for the Lincoln Hotel to open by Nov. 1, 2011. But because of "the poor condition of the building, the unexpected scope of the necessary renovations, complications with contractors, and other issues, Mr. Yuan is still working towards opening the hotel in late Summer 2012," according to city documents.
City administrators are now hoping council members agree to make some changes to the original agreement to avoid the project's failure.
The original November 2010 contract made $650,000 immediately available to Yuan for improvements to the hotel that needed to be completed before he could open its doors. By March 2012, Yuan had received all of that money, which was used for items including roof work, elevator work, entrance upgrades, electrical upgrades, HVAC improvements, cable television and high speed internet upgrades and hotel lobby upgrades, according to city documents.
That money was classified as a loan, but city officials planned to forgive all of the debt upon the hotel's opening.
City officials also planned to reimburse Yuan for renovation costs up to $200,000 each year for four years after he started booking rooms.
Under the new agreement, the loan amount would be upped to $1.05 million to allow renovations to continue in advance of the scheduled opening. That total includes the original principal amount of $650,000 plus the additional $400,000 the city had initially budgeted to assist Yuan in the first two years after its opening.
Like the original agreement, the city would forgive the loan. But this time, it will require that Yuan operate the building as a hotel for at least two years, and that the opening date be no later than Dec. 31.
The new agreement would maintain the plan for reimbursing Yuan up to $200,000 each year for the second two years.
Yuan bought the Lincoln Hotel in 2010 amidst a fight over its landmark status. Part of the agreement with the city was that he support its designation as a local landmark, which the city council confirmed in December 2010.