Incentives OK'd for hotel, Hofbrauhaus project in Belleville
The Belleville City Council voted Tuesday night to approve about $38 million in tax incentives for the hotel, restaurant and sports complex planned for Illinois 15. The estimated value tops $100 million for the projects.
The Keller family of Effingham plans to develop up to four hotels, a Hofbrauhaus restaurant, several other restaurants, a convention center and a convenience store on Illinois 15 across from the National Shrine of Our Lady of the Snows.
They were granted $32.36 million in tax incentives and they estimate the value of the project at $90 million.
Kansas City-based Game On Sports Development was granted $5.5 million in hotel and motel sales tax revenue to build a sports complex with 11 soccer fields. This project is valued at $13 million. It is expected to host regional soccer and lacrosse tournaments that would attract visitors from throughout the Midwest, and they are expected to stay in the hotels developed by the Keller family.
To implement these incentives, the City Council on Tuesday night authorized increasing the city’s hotel and motel tax from 5 percent to 8 percent.
The vote for the hotel and Hofbrauhaus project was 14-1 with Ward 5 Alderman Phil Silsby absent and Ward 2 Alderman Mike Buettner casting the lone “no” vote.
This development agreement more than doubles the amount of tax incentives approved by aldermen in May. Buettner also voted against that agreement.
Buettner told his colleagues that the “responsible thing” to do would be to keep the original agreement, which called for $15.69 million in incentives.
“What’s the next request? My fear is to float bonds to help finance this project,” Buettner said. “We should have stayed with the original agreement and then, if successful, we could have negotiated perhaps a better deal for the taxpayers and residents of Belleville.”
Buettner said he thinks the sports complex announced after the vote in May is a great addition to the project and will give people an excellent reason to visit Belleville. He did vote to approve incentives for this project.
“I’m 100 percent behind that part of this,” Buettner said. “I think it’s going to be a money maker for you and the city. It’s going to draw people here.”
Chane Keller, one of the developers for the hotel and Hofbrauhaus site, said in an interview that the increased tax incentives were needed to quickly move the project along after the soccer and sports complex plans were announced.
“We believe this vote was important in ensuring it can continue to grow,” Chane Keller said.
He said getting City Council approval before the buildings are constructed is necessary because it would take too much time to “go back and get approvals later.”
He said the his family looks forward to getting the Hofbrauhaus brew pub open and offering full service hotels for Belleville residents and visitors.
The Keller family has not yet announced which brand of hotel will be built.
Forrest Langenfeld, the financial consultant for the Keller family, said crews on Tuesday were clearing the land and preparing it for construction.
Here’s a breakdown of the development agreement for the hotel, restaurant and Hofbrauhaus site:
▪ The developers will get 4 percentage points of the hotel and motel sales tax revenue generated at the site, where they hope to build four hotels. They would receive this for 20 years after each hotel opens. The soccer park complex will receive 2 percentage points of the hotel tax produced on the site and the city would get the remaining 2 percentage points.
▪ The tax increment financing district at the site will give the developers property tax rebates of $6 million if two hotels are built along with the Hofbrauhaus, 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 business district established on the site allows an additional 1 percent sales tax to be collected at the complex and the developers will keep all of this revenue for 23 years.
As part of the agreement, Belleville plans to extend sewer lines to the project.
Meanwhile, the developers and the city are waiting for a decision from the state Department of Commerce and Economic Opportunity on whether Belleville’s enterprise zone can be expanded to include the Illinois 15 site.
If this is approved, the Keller family could save more than $1 million in sales tax breaks on the purchase of construction material.
The city’s Finance Committee previously voted in support of the tax incentives.
In other business
Several residents who live near Lindenwood University-Belleville told the aldermen Tuesday night they have concerns about problems cropping up with students who live in homes the university has purchased near campus.
Mayor Mark Eckert said the city would meet with the residents and investigate their complaints.
Ward 8 Alderman Roger Wigginton suggested a “liaison” be established between the school and the city.