O’Fallon creates new business district with $18M hotel as its centerpiece
A new business district could spur additional commercial development near the intersection of West U.S. Highway 50 and North Green Mount Road in O’Fallon, city officials say.
Special business districts are designed to stimulate the economy, create jobs, increase tax revenue, and fund infrastructure upgrades such as roadways, water, and sewer systems.
Several ordinances related to the proposed district were approved by the O’Fallon City Council Tuesday. These include the district’s creation, approval of the business district plan, authorization to impose business district taxes within its boundaries, and a redevelopment agreement with Allyson Group Inc.
Brad McMillin of Allyson Group is developing the $18.2 million SpringHill Suites hotel on nearly five acres at the northeast corner of the intersection. He proposed that the area become its own business district, allowing business owners to collect up to an additional 1% sales tax.
This is an extra tax on retail goods, above and beyond what is currently collected in the city, and is not a sales tax rebate.
The project’s total estimated cost is $18,222,068, but the amount to be recovered by Allyson Group will ultimately depend on the 1% business district tax collected by businesses in the district.
McMillin has developed retail and mixed-use properties in O’Fallon since 1986. In the business district plan, he stated that property acquisition and infrastructure improvement costs to serve the site were economically infeasible without another source of funding. The district will bridge that economic gap.
SpringHill Suites by Marriott International, approved two years ago, will be the city’s 15th hotel, adding 103 rooms to the more than 1,250 already available.
SpringHill will offer primarily one-bedroom suites, with some double rooms available. Amenities include an outdoor swimming pool, meeting spaces, and a limited fitness center.
The five-story hotel will be developed on four lots. Two of the lots have been vacant for more than a decade, while the other two have existing single-family residences. The deteriorated and dilapidated homes have been considered blighted and have become a dumping ground for bulk trash and tires.
Required roadway improvements to the existing street network include a westbound right-turn lane at the signalized intersection of Highway 50 and Green Mount Road, based on a traffic impact study conducted by CBB Transportation Engineers and Planners.
Surrounding properties include offices, retail, and services. The northeast quadrant is bordered on the north by the Eagle Ridge Neighborhood Condominiums and a commercial center; to the east, by residences and Scott Credit Union; to the south, by CVS Pharmacy, Sonic Drive-In, Denny’s, and Harley-Davidson; and to the west, by Carrollton Bank, First Bank, and Advance Title Solutions.
Alderman Ross Rosenberg explained that business district taxes are only used for specific, eligible expenses.
A public hearing on Aug. 4 resulted in no objections, and the proposal has passed through all city channels without opposition.
Special Business Districts
In the past, city officials have approved specific business districts to revitalize certain areas, attract development, and fund infrastructure improvements.
Recently, the new Park Place Business District—covering 320 acres near the Family Sports Park, west of the intersection of Venita Drive and Porter Road—was approved. Other districts include the Downtown District and the Central City Tax Increment Financing (TIF) District.
With projects such as O’Fallon Station downtown and the planned Park Place, officials hope to create a vibrant atmosphere through events and branding.
An economic development incentive called Destination O’Fallon, implemented in 2016, led the city to increase its hotel/motel tax from 5% to 9%. This tax is paid only by those booking lodging.
It proved to be a game-changer. Destination O’Fallon tax revenue funded new playing fields at Family Sports Park, including two all-weather synthetic turf fields for soccer and baseball in 2018. The state-of-the-art soccer complex cost $4.58 million.
Development and improvements to the 200-acre Family Sports Park have attracted more sports tourism, making it a regional site for tournaments with players from other states.
The lodging industry has become a major economic driver for the city. Assistant City Administrator Grant Litteken said data shows that if someone stays overnight in O’Fallon, they are likely to spend more than three times as much, including hotel stays, multiple meals, and shopping trips.
“The Family Sports Park not only attracts hundreds of thousands of people to O’Fallon each year, but it also helps fill O’Fallon’s hotels, restaurants, shops, and many other businesses,” Litteken said.
Hotels in O’Fallon include Baymont Inn & Suites, Candlewood Suites, Best Western, Drury Inn & Suites, Extended Stay America, Fairfield Inn, Hampton Inn, Hilton Garden Inn, HomeTowne Studios & Suites, La Quinta Inn & Suites, Quality Inn, Super 8 by Wyndham, Sleep Inn and TownePlace Suites by Marriott.
Another hotel development, Home2 Suites by Hilton, is under construction at 357 Regency Park Drive and will feature 108 guest rooms, a pool, and lounge area. Originally part of the Central Park mixed-use development, it was moved to Regency Park last year.
This story was originally published September 4, 2025 at 5:00 AM with the headline "O’Fallon creates new business district with $18M hotel as its centerpiece."