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TO: Mayor Thomas J. Weisner
FROM: Bill Wiet, Chief Development Services Officer
DATE: November 18, 2014
SUBJECT:
To request authorization to execute a Hotel Occupancy Tax Rebate Agreement with Midwest Management II, Inc., owner of the current Comfort Suites Hotel at 111 North Broadway, to provide for improvements to the property for the purpose of rebranding the hotel to a Holiday Inn Express and Suites affiliate.
PURPOSE:
The City of Aurora will be providing economic assistance to Midwest Management II, Inc., through the Hotel Occupancy Tax (also known as hotel/motel tax) that will be generated solely by the above mentioned tax from this hotel. The amount of the assistance is $500,000 paid over 10 years, plus Midwest's actual documented interest expenses at an annual rate not to exceed 4.75%, in regard to any loan obtained by Midwest relative to constructing the project. Also, the City agrees to cooperate with Midwest in complying with the requirements of the Small Business Administration (SBA) in securing the remaining balance of a loan guarantee the City currently has on the Hampton Inn and Suites located on Bushwood Drive (off of Orchard) and under same ownership group. This cooperation does not include the city guaranteeing and portion of the new SBA loan on this property, except for this portion the City previously agreed to guarantee.
BACKGROUND:
The Comfort Suites was an anchor to the redevelopment of the historic Roundhouse block in 1994, which began with the relocation of the Aurora Transportation Center and commuter parking lot. To date this cooperative project has increased the vitality of downtown Aurora, and continues to this day with the completion of RiverEdge Park on the west side of the block. Given the fact that this development has approached 20 years in age, and in order to further the economic development goals in this area, it is in the best interests of the City to assist in the improvements to the Comfort Suites in order to rebrand to a Holiday Inn and suites affiliate. But as is customary when rebranding, upgrades and improvement are necessary to meet the development goals of the new brand. This project was approved in 1994 as a special use with a final plan, and therefore the final plan revision along with design review will proceed through the Aurora Plan Commission, and ultimately City Council.
DISCUSSION:
The improvements, as indicated in more depth in the agreement, includes new fixtures, furniture and equipment (FF&E), new windows, new architectural roof, a remodeled exterior façade including portico, and many other interior and exterior improvements. The estimated costs associated with the rebranding amount to $2,000,000, with the City's economic assistance approximating 25% of the projected costs. As stated earlier, hotel taxes generated by this property only will be rebated back to the owner annually. Budgetary authority for this agreement is being requested in the 2015 City Budget.
IMPACT STATEMENT:
This rebate agreement, if approved, will continue the investment and reinvestment of capital in the downtown as a whole and this block in particular. Downtown Aurora has become a greater destination for out- of- towners, where the rebranding of the current Comfort Suites to a Holiday Inn Express would have many benefits to the business traveler and tourist.
RECOMMENDATIONS:
Staff recommends approval of the Hotel Occupancy Tax Rebate Agreement for Midwest Management II, Inc. for the property at 111 North Broadway.
cc: Alderman O'Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Peters, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing the Execution of a Hotel Occupancy Tax Rebate Agreement with Midwest Management II, Inc., for the Property at 111 North Broadway.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the Corporate Authorities of the City of Aurora, Kane, Kendall, Will and DuPage Counties, Illinois have considered a Hotel Occupancy Tax Rebate Agreement (the Agreement) for certain property within the City of Aurora, a true and correct copy of the Agreement being attached hereto and made part hereof as EXHIBIT "A"; and
WHEREAS, budgetary authority for this project has been requested in the 2015 City Budget in account no.101-1830-465.55-84 (General Fund); and
WHEREAS, the City Council has determined that it is in the best interests of the residents of the City of Aurora that this Agreement be entered into, and further, that the project would not be economically feasible but for the economic assistance promised by the City in this agreement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1: The preambles hereto are made a part thereof as fully as if completely repeated at length herein.
Section 2: That the Mayor and City Council hereby find that it is in the best interest of the City of Aurora and its residents that the aforesaid "Hotel Occupancy Tax Rebate Agreement " with Midwest Management II, for the property at 111 North Broadway be entered into by the City of Aurora, with said Agreement to be substantially in the form attached hereto and made a part thereof as EXHIBIT "A".
Section 3: That the Mayor and City Clerk are hereby authorized to execute for and on behalf of the City of Aurora, the aforesaid Agreement.
Section 4: That this Resolution shall take effect from and after its adoption and approved as required by law.
PASSED AND APPROVED on ______________.
AYES ____ NAYS ____ NOT VOTING ____ ABSENT ____
____________________________ __________________________
Alderman Bohman, Ward 1 Alderman Garza, Ward 2
____________________________ __________________________
Alderman Mesiacos, Ward 3 Alderman Donnell, Ward 4
____________________________ __________________________
Alderman Peters, Ward 5 Alderman Saville, Ward 6
____________________________ __________________________
Alderman Hart-Burns, Ward 7 Alderman Mervine, Ward 8
____________________________ __________________________
Alderman Bugg, Ward 9 Alderman Johnson, Ward 10
____________________________ __________________________
Alderman Irvin, At Large Alderman O'Connor, At Large
ATTEST:
____________________________ __________________________
City Clerk Mayor
Exhibit "A" Agreement