The City of Champaign has a chance to help turn a blighted downtown street corner into a viable economic enterprise.
A 2008 fire in downtown Champaign that destroyed the Metropolitan Building was a disastrous setback for redevelopment efforts there.
Work was under way to turn that old, majestic building into a residential and commercial showpiece, but it all went up in smoke from a fire of undetermined cause. Left in its place has been an unsightly hole in the ground, a grim reminder of what might have been.
But it looks as if change for the better is in the offing.
City council members this week gave their tentative approval to a plan that would provide up to $3 million in subsidies to a nine-story, 150-room hotel project at the corner of Neil and Church Streets. The money would come from property tax revenue generated by a tax increment finance district that's been in place for years as well as reimbursement of city taxes.
From a policy standpoint, the city is well advised to approve this plan.
It represents a quality development in a downtown location badly in need of improvement. Although the city will pitch in up to $3 million over seven years to encourage the hotel's economic success, the city would have never gained that anticipated income without the hotel's development.
This proposal comes under the credo that "you've got to spend money to make money." Essentially, it's an investment in the city's future.
"This is an opportunity to make something good out of that (fire disaster)," said City of Champaign Planning Director Bruce Knight.
Council members voted to authorize Knight to negotiate a development agreement with hotel developer Hans Grotelueschen, who owns YG Financial Group at 115 W. Church St., C, a site adjacent to the building site.
Knight said he hopes to have the negotiations complete "within a month" so the council members can give their formal approval. Grotelueschen has indicated that he wishes to begin construction in June and be finished by July 2013.
A successful hotel in the downtown would be a terrific addition. It would mean more people, more activity and more tax revenue generated by spending from visitors.
This is not a venture without risk. Operating a hotel is a tricky business, and Grotelueschen still has to reach an agreement with a franchise operator. Knight said three potential franchisers are interested.
The goal is to establish an urban hotel in which guests will find their various needs met within walking distance.
"We feel pretty good that it will succeed," said Knight. "Visitors want a unique environment."
There are, however, appearance problems that ought not be ignored.
Champaign resident Bill Glithero, no doubt, spoke for many at Tuesday's council meeting when he pointed out the inconsistency of the council's recent decision to raise gasoline taxes by 4 cents per gallon followed by another decision to spend up to $3 million to subsidize a hotel development.
To many citizens, the council's decision represents profligate spending and indifference to raising taxes to support profligate spending. That the two decisions represent separate issues intended to address separate problems from separate funds won't entirely persuade these critics.
Feeling that current economic malaise is a poor time to raise taxes, The News-Gazette opposed the recent gas tax increase. But the council decision to approve the tax hike in no way affects our support for the city's role in the hotel project.
A successful downtown Champaign would be good not just for downtown, but the entire city, and council members are correct to give it support.