URBANA — The back-up bidder for the Landmark Hotel has backed out.
After selling for $1.3 million in an auction this September, the top bidder failed to put a deposit down.
So it went to the second-place bidder of $1.2 million, who the property's broker, Rick George, said had experience in historic preservation.
But the city of Urbana announced late Friday that this unnamed developer is also backing out, a few days before the sale was set to close.
"We are moving on to consider our remaining options," George said in a statement.
Urbana Mayor Diane Marlin said the developer wanted too much in incentives from the city.
"We had several candid conversations about what the developer felt he could invest in this property and how much financial support he needed from the city to make the project work," Marlin said in a statement. "The developer was unwilling to close on the property without a commitment from the City to rebate all tax revenue generated by the project for at least 20 years. This scenario was not acceptable to the City."
The city also denied a redevelopment attempt last year over the risk it would put on Urbana taxpayers.
In that case, a New Jersey-based firm put together a $24.5 million plan to redevelop the hotel, with $9.5 million from the city.
After that fell through, the owner Xiao Jin Yuan put the hotel up for auction last December, and bidding reached $3.95 million.
But that failed to meet Yuan's reserve price, thus the second auction.
The Landmark Hotel has been closed since April 2016 and has been for sale since 2015, when Yuan had an asking price of $5.4 million.
He bought it in 2010 for $600,000 and renovated most of the rooms, but returned $1 million in incentives to the city after not reopening its restaurant and conference center.
The hotel opened in 1923 as the Urbana-Lincoln. It was later bought by Carson Pirie Scott & Co. in 1965 before being sold to the Jumer Hotel chain in the '70s.
It was sold again in 2001 and has cycled through various owners since then.