Hotel back on market


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URBANA — Five years after purchasing what is now known as the Urbana Landmark Hotel, developer Xiao Jin "XJ" Yuan is giving up and has placed the 92-year-old building on the market.

And Urbana officials are again dreaming about what could become of it.

Among the city council majority, everything but demolition seems to be on the table.

"Five years ago when XJ bought it, we were close to that point. The roof was leaking; everything was in terrible shape. It was a terrific safety hazard. But the investment that the public made in the building, all the public dollars went into the infrastructure," Urbana Alderwoman Diane Marlin said. "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."

Yuan declined to talk about his decision to sell.

"I have no comment. This is a private business matter," said Yuan, who in 2010 purchased for $600,000 what had 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.

But Marlin and other city officials contacted Tuesday voiced optimism that a new owner could give the historic property — originally built by local subscription at the same time the University of Illinois was erecting Memorial Stadium — a new beginning.

"It has a lot of potential," said Urbana Alderman Dennis Roberts, whose ward includes downtown Urbana and the hotel site. "The best result would be to see a change in ownership and another change in direction. What I would not want to see is for it to be demolished.

"It could end up being a senior residence or a student housing project or it could be condominiums, or it could operate as both a hotel and a condominium project."

Mayor Laurel Prussing said she had no preference.

"We just want it developed," she said. "It would be nice if it's a hotel, but we have people interested in it who could do other things with it. It all depends."

Only Mike Madigan, the city council's only Republican, expressed doubts about preserving the building.

"I don't think the city should invest another dime there unless someone who is very reputable, with the capital to back the project in a solid plan, comes forward," Madigan said. "I thought it was time to give up and tear it down when no one stepped forward with a viable business plan for years. The city instead chose to go with a guy — a nice guy with good intentions — but they chose to go with someone who was undercapitalized and not equipped to take on the project."

Madigan said the city council should "learn a lesson" from its experience with Yuan "and realize that although he has made some upgrades, there are still serious problems with the property.

"If someone with a regional or a national reputation, and capital, steps forward, then great. But absent that, I think it's a fool's errand to put any more into that building," said Madigan, who owns a number of barbecue restaurants in central Illinois.

Asking price: $5.4 million

Urbana gave Yuan more than a million dollars in tax increment finance district funds to make repairs and improvements to the hotel, council members said, and he has repaid it.

"The million dollars was going to be given to him if he completed all the work. Otherwise, it was a loan," Prussing explained. "Since he didn't complete all of the things in the time we had set out, we asked that it be a loan and then we called the loan. We worked with him for a number of years and then it became clear that it wasn't going to work to everybody's satisfaction. So we went to plan B. That was this spring."

The money is back in the city's TIF fund, Prussing said.

Although property assessment records show the three-story, 128-room hotel has a market value of about $162,000, Yuan's asking price is $5.4 million.

Officials expressed skepticism about the price, but noted that Yuan had put hundreds of thousands of dollars of improvements, as well as sweat equity, into the building.

"The current owner has taken a lot of time and tried to save money by doing things himself, which has made things take longer. You have to give the guy credit. Taking over a building that's that old, you just run into problems you never think of," Prussing said. "He couldn't get a plumber to work on some pipes because they were afraid the pipes would break. I think he has spent a lot of time on it, and it has been exhausting for him."

Marlin suggested that the original front porch of the hotel, enclosed in 1964 when the Lincoln Square Shopping Center was built around it, could be exposed anew. That might even mean reopening parts of Broadway Avenue and Green Street.

"My grand idea — and I'm fully aware that we don't own Lincoln Square or the hotel — would be for the southeast facade of the hotel to be exposed again. Peel back that part of Lincoln Square so that the most beautiful part of the hotel can be seen again. Have an open plaza in front of the hotel and go from there," said Marlin, whose city council ward includes south Urbana. "We need to start thinking different for Lincoln Square. It's out of date right now. If I had a lot of money and owned everything over there that's what I would do."

'A hotel can make it'

Marlin said she had mentioned her idea to Lincoln Square owner James Webster, "and he didn't run away screaming."

"That hotel has been buried in Lincoln Square and it never should have been. Why not expose the most charming and historic part of it?" Marlin said. "But I'm just glad that we may be dealing with new owners. That's the first step. I think we should be open to anything. Personally, I think a hotel can make it in that spot. If you take advantage of the location near the university, it should work. But you've got to market it and run it properly. That hasn't happened."

Libby Tyler, Urbana's community development director, said there is interest in the building, which she said went on the market a few months ago.

"We've been talking to people. When they come in they check it out, I think (Yuan) definitely has some folks interested. We're hopeful," she said.

Roberts praised Yuan for the work he did, and said he just couldn't keep up with construction expectations the city had as part of its offer of TIF money.

"I think that XJ did a lot of really significant improvements stabilizing the building," Roberts said. "But because there were so many new problems that arose and because the building was built in an era when city codes didn't exist, and how difficult it is today to bring any old buildings up to city code, I think he just found it all overwhelming to accomplish.

"But the city, rather than giving him more time to work through it, felt that it wanted to impose the timeline of expectations that were agreed upon in his contract. The possible and the impossible met and it didn't work out very well."

Although improvements were made and eventually all the hotel's rooms were approved for occupancy, other parts — a conference center, a kitchen and an indoor swimming pool — never were completed.

"I think XJ had a lot of energy and enthusiasm but it diminished over time as he ran into many different obstacles," Roberts said. "It was unfortunate."


Tom Kacich is a columnist and the author of Tom's Mailbag at The News-Gazette. His column appears Sundays. His email is, and you can follow him on Twitter (@tkacich).

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