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Three Peoria, Illinois Hotels are in the Spotlight

The Grand Hotel Sold in Foreclosure Proceedings, the Four Points by Sheraton Benefits
from Tax Incentives and the Redeveloper of Hotel Pere Marquette Hopeful to
Launch Renovations Soon as Reinvestment Nears Closing


By John Sharp, Journal Star, Peoria, Ill.McClatchy-Tribune Regional News

March 15, 2012--PEORIA -- Hotels are on the minds of Peorians, for different reasons.

On Wednesday, a longtime Central Peoria hotel was sold to a bank to close foreclosure proceedings against its former owner; the redeveloper of the Hotel Pere Marquette said he's hopeful closing on its sale will take place soon; and another Downtown hotel caught criticism for spending tax money for signs.

"This isn't the first hotel in the (Hospitality Improvement Zone) we've given money back to," Mayor Jim Ardis said Tuesday, before the City Council voted to reimburse Four Points by Sheraton $98,127 of hotel tax money generated by its customers to pay for signs.

Four Points by Sheraton

The Four Points reimbursement is part of a program the council established in 2008 with the designation of the Hospitality Improvement Zone, which incorporates Downtown's hotels. Within the zone, the hotels are part of a Business District Development (BDD) plan, which establishes a separate 1 percent hotel tax that raises revenue which can be reinvested in hotels.

Four Points already has remitted $48,897 in the hotel tax, but it needed approval from the council to spend it on new signs. The balance of the $98,127 will be generated by the hotel tax to help pay for the signs.

The move disappointed some council members who thought the 1 percent hotel tax should be spent on improving the hotel's interior.

"If you think that is going to put Peoria and its Downtown hotels in a competitive position, continue to spend eight years of hotel tax revenue on signage," at-large City Councilman Gary Sandberg said. "And in the ninth year, there is no hot water."

Sandberg acknowledged that Four Points is "doing things properly" with its private reinvestment in the former Holiday Inn City Centre.

The hotel's flag was changed about one year ago when owner Pyramid Hotel Group signed a franchise agreement with Starwood Hotels & Resorts Worldwide Inc., and multi-million dollar enhancements have been made to include new beds, 42-inch high-definition televisions in each room, etc.

Ardis also cited the Hotel Pere Marquette's current state. "The fact is, for many years, and one of the many reasons the 'Grand Old Lady' is grand and old and in a world of hurt is there was no reinvestment in that property."

Hotel Pere Marquette

That reinvestment could come soon. Ardis and other city officials have a March 30 deadline in place for developer EM Properties to close on the sale of the Pere and to begin renovation work inside. By March 2013, the hotel could be reopened as part of the $92.8 million Marriott Hotel complex.

Gary Matthews, the developer of the project, said Wednesday he is hoping to get the go-ahead for a closing date.

"I have (construction) fences ordered," he said. "We're ready to go."

On Tuesday, the council got an update from City Attorney Randy Ray who said some final details involving tax credits and the city's security position need to be ironed out before the project is finalized.

Matthews also said EM Properties has obtained a building permit, and a general contractor is in place to begin work soon.

The Grand Hotel

While the Pere is closed temporarily, the Grand Hotel on Brandywine Drive will remain open despite being sold to a financial institution Wednesday.

HSBC Bank USA bought the hotel for $2.5 million during an auction at the Peoria County Courthouse.

"The bank has a management team in place," said Charles Rock, an attorney representing the bank. "To the best of my knowledge, the hotel will have continuous operation until a buyer is found."

Wednesday's foreclosure sale came after a Jan. 24 ruling against the previous owners for owing $5.4 million on two unpaid bank notes. Rock said on Tuesday that about $4.5 million was actually owed.

John Sharp can be reached at 686-3282 or jsharp@pjstar.com. Follow him on Twitter @JohnSharp99.

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(c)2012 the Journal Star (Peoria, Ill.)

Visit the Journal Star (Peoria, Ill.) at www.PJStar.com

Distributed by MCT Information Services



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