ACTION REQUESTED:
Title
Communication from the City Manager with a Request to ADOPT an ORDINANCE Approving the GRANDVIEW LODGING, INC. REDEVELOPMENT AGREEMENT. (1st District)
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BACKGROUND:
The Four Points Peoria is the largest hotel property in Peoria and has been closed since October 2013. Its closure has had a negative impact on the local visitor and convention business and its re-opening has been a key Council and staff goal. In August 2015, Grandview Lodging, Inc., a subsidiary of Hawkeye Hotels, purchased the shuttered property. In addition to the $5,800,000 purchase price, the company is planning to invest an additional $9,900,000 to completely renovate and reopen the 319 room hotel as well as the banquet space and restaurant. Hawkeye Hotels is very experienced in purchasing and renovating hotels, as well as constructing new hotels. They own over 50 hotels, generally in the Midwest, employ over 1000 individuals, and have strong corporate relationships with brands such as Marriott and Starwood.
The property is within the City's Hospitality Improvement Zone TIF District. The developer has requested that it be reimbursed 80% of any property tax increment generated by their investment. Of note, the property has a current (2014) Equalized Assessed Value (EAV) of $2,029,400. This value is considerably below "Base EAV" in 2007 of $2,346,670. No tax increment will be generated, nor rebated, until the EAV exceeds this base amount.
FINANCIAL IMPACT: In 2015, the hotel property paid a total tax bill of $186,813. The investment should increase the property's value to beyond its 2007 level. Once that threshold is met, the tax bill would be approximately $230,000 with the $44,000 difference being dispersed to the taxing bodies (approximately $4,400 additional general fund revenue to the City). Additionally, more room sales in Peoria, and associated food sales for banquets, room service and restaurant, will generate additional hotel, re...
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