|By Susan Kuczka, Chicago Tribune
Knight Ridder/Tribune Business News
May 10, 2006 - -- Gurnee is one of the top tourist destinations in Illinois, but it took a special tax-incentive package to persuade "Famous" Dave Anderson to build a $125 million hotel and indoor water park complex in the Lake County village rather than in Wisconsin.
Ground could be broken this summer on the KeyLime Cove Resort and Water Park project. Gurnee officials landed it after offering Anderson, owner of the nationwide Famous Dave's barbecue chain, a break on the village's hotel occupancy tax.
The village normally charges a 5 percent occupancy tax, but KeyLime will pay only 3.5 percent, generating an estimated $750,000 for the village rather than $1.5 million, officials said. The tax incentive will expire in 20 years.
The break "was offered to basically get the project in town," Gurnee Village Administrator Jim Hayner said Tuesday.
Offering tax breaks to businesses has become common throughout the suburbs as village officials try to meet residents' service demands.
And in far north suburban areas like Gurnee, tax breaks have become an increasingly important tool to lure businesses that might otherwise locate in Wisconsin just north of the Illinois state line.
"No municipality wants to be known as a municipality that routinely grants these kinds of things, but they want to be able to have something in their arsenal to be able to hold or attract desired businesses," said Christine Wilson, executive director of the Lake County Municipal League.
The proposal to build a hotel with more than 600 rooms and an 80,000-square-foot water park, three restaurants and a spa sounded enticing to village officials. Equally alluring was a proposal to build a 12,000-square-foot conference center within the hotel that eventually would be expanded to 50,000 square feet, officials said.
"That's going to make it unique," said David C. Young, president of Lake County Partners, a public-private agency that promotes local business interests. "There's a keen interest in convention space in Lake County. Right now, if [corporations] want to do anything, in most cases they need to go out of the county."
The tax break for KeyLime's developers comes at a time when Gurnee officials are considering imposing a food and beverage tax to shore up the village's approximately $45 million annual budget.
Mayor Kristina Kovarik said the village received some complaints from residents about the proposed new tax, but she and other village officials argued that the new fees mostly would affect visitors to Gurnee.
With the Six Flags Great America amusement park and Gurnee Mills mall among the state's top tourist attractions, Gurnee has been able to largely rely on sales tax revenue to fund local government without instituting a property tax.
With statistics showing about 65 percent of Gurnee restaurant customers are from out of town, a 1 percent food and beverage tax is something most residents could accept, the mayor said.
"A property tax would be the easy way out, but more people understand that we're continuing to find opportunities to make sure the bulk of the revenue generated from these fees are on the out-of-towners," Kovarik said.
Anderson said he's looking forward to the 2007 grand opening of KeyLime Cove on 30 acres just northeast of the Tri-State Tollway and Grand Avenue, close to both Great America and Gurnee Mills.
"The location is just really terrific," he said.
Anderson also confirmed that without the special tax break, it's likely KeyLime Cove would be calling Wisconsin home.
"I think [the tax break] was very important," he said. "The project that we have is a very sizeable investment, so I think for us to make the investment it [had to be] a win-win for both the community and for us."
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Sizing up the parks
NAME: KeyLime Cove Resort and Water Park
COST: $125 million
SIZE: 30 acres
DESCRIPTION: 611-room hotel; 80,000-square-foot water park; 12,000-square-foot conference center expandable to 50,000 square feet; three restaurants; and a spa
OWNER: Dave Anderson of Famous Dave's barbecue restaurant chain
NAME: Grizzly Falls Resort
COST: $110 million
SIZE: 400,000 square feet
OPENING: spring 2008
DESCRIPTION: 400-suite hotel with 100,000-square-foot indoor water park, billed as largest in Illinois; a spa, family entertainment center, food court, concierge and limo service
OWNER: Chicago-based Landmark Resorts & Hotels
Copyright (c) 2006, Chicago Tribune
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