Metro-East News

Hofbräuhaus developers again miss their goal to build hotel in Belleville

For over three years, Belleville residents have heard about the Keller family’s plans for up to four hotels to be built next to the Hofbräuhaus German restaurant off Illinois 15.

In their last public comment about the hotel, the Kellers said in a Dec. 1 news release that construction would begin in the spring of 2018 on a hotel. But the land around the restaurant and brewery remains vacant.

Chuck Keller of Effingham and his son, Chane Keller, could not be reached for comment about their development plans.

The development team had announced in March 2016 that hotels would be built that year. When that didn’t happen, they said in November 2016 that construction on a six-story, $28 million Hyatt Place hotel and conference center would start in 2017 and be finished by 2018.

While the Kellers have not built the hotels they proposed, they did open the Hofbräuhaus in March. And just like they have missed their self-imposed deadlines to open hotels, they missed eight target dates to open the Hofbräuhaus. Their original goal to open the Hofbräuhaus was June 1, 2016.

After plans were announced to build up to four hotels in Belleville, Chris Keller, another son of Chuck Keller, announced plans to build a hotel in Jonesboro, Arkansas, but construction stopped on that project early last year after liens were filed by contractors.

Also, the BND has previously reported that the Belleville development agreement with the Kellers did not include a deadline for them to open the Hofbräuhaus or hotels.

Mayor Mark Eckert said he recently discussed the Belleville hotel issue with representatives of the Missionary Oblates of Mary Immaculate, the religious order that runs the National Shrine of Our Lady of the Snows located across the road from the Hofbräuhaus. The Oblates own the land where the Hofbräuhaus is located.

“The Oblates, and no offense, if they had their druthers, the first thing they would have wanted to see open was the hotel,” Eckert said.

“They’re very happy that the Hofbräuhaus is open,” Eckert said. “But they want the hotel.”

A spokesman for the Oblates could not be reached for comment.

Ward 2 Alderman Mike Buettner, who voted against the $32.36 million in tax incentives that the Kellers are eligible for, said he would like to see progress on the site.

“Why don’t we have a hotel? That is what we were promised and that’s what this town needs,” Buettner said.

Eckert said the Oblates have been working with the developers to get a hotel built.

“I still firmly believe once we get our first new hotel, I think there will be proof that we need a second one, a third one,” Eckert said.

Two new hotels are planned in O’Fallon where there already are 12 hotels along Interstate 64. Fairview Heights has eight hotels and Shiloh has one.

Eckert said those hotel owners enjoy something that Belleville doesn’t have: an interstate. However, he believes hotels in Belleville could thrive because of people visiting Belleville and nearby cities would rather stay in a new hotel along Illinois 15 instead of battling the traffic congestion off I-64.

In an effort to spur development on the west side of Belleville, the City Council agreed to spend $2.42 million to extend sewer lines to the Hofbräuhaus site.

If the Kellers had built all the hotels, conference center and restaurants they had proposed, the of intersection of DeMazenod Drive and Illinois 15 would need to be improved to meet safety standards required by the Illinois Department of Transportation.

However, the Kellers have discussed with IDOT whether a “smaller” hotel without a conference center could be built without having to make improvements to the intersection, Eckert said.

But Eckert said he did not have confirmation on whether this would be approved by IDOT and an agency spokesman said nothing has been finalized.

About 30,000 vehicles pass by the Hofbräuhaus site each day on Illinois 15, according to the Department of Transportation.

From 2013 to 2016, there were 39 crashes at the intersection of Illinois 15 and DeMazenod Drive, with 33 people injured, according to Illinois Department of Transportation records.

Here’s a breakdown of the crashes: eight crashes in 2013 with two injuries; six crashes in 2014 with two injuries; 16 crashes in 2015 with 14 injuries; and nine crashes with 15 injuries in 2016. No one died as a result of the crashes at this intersection, according to the records released through a Freedom of Information Act request.

Records are not yet available for last year or this year.

Tax breaks

While the Hofbräuhaus has been open since March in Belleville, the Kellers have not yet filed claims for any of the $32.36 million in tax incentives they are eligible to receive.

The tax rebates are based on tax revenue generated by businesses on the site.

The tax breaks are concentrated in three types:

The tax increment financing, or TIF, district at the site allows the developers to get property tax rebates of $6 million if two hotels are built along with the Hofbräuhaus, convention center and four upscale restaurants. If two additional hotels are built, this rebate would increase to $8 million, or $1 million for each new hotel.

The developers will get 4 percentage points of the hotel and motel sales tax charged at the site. They would receive this for 20 years after each hotel opens.

The site was established as a “special business district.” This allows a business owner to charge an additional 1 percent sales tax and the developers can keep all of this revenue for 23 years.

Convenience store

In February 2016, Wortman Properties of Effingham announced plans to build a Jack Flash convenience store next to the Hofbräuhaus but construction has not yet started.

A company spokeswoman has told the BND she would check on the status of the project but has not yet released details.

The City Council in July approved the site plan for the convenience store.

The chain has 10 convenience stores, with most of them in Central Illinois.

Despite the delays in getting businesses open in the Kellers’ development, Eckert said he remains bullish on the project.

“I think it’s going to continue to be a destination,” Eckert said. “I’m still very optimistic. It’s been a journey that hasn’t always been perfect but I still think we’re moving forward.”

Mike Koziatek: 618-239-2502, @MikeKoziatekBND