Homewood trustees voted Tuesday night to give $900,000 and a recommendation for Class 8 tax designation to Ravisloe Country Club owner Dr. Claude Gendreau, all for the development of a boutique downtown hotel.
The two incentives are separate and distinct, Grandeau’s financial consultant Don Peelman said.
The Class 8 is in response to anticipated high operating expenses, as are custom in the business, says Homewood Community Development Director Paula Wallrich. The designation will reduce his assessment to ten percent of market value for the first ten years, 15 percent in the 11th year and 20 on the last, with an opportunity to renew. Not having a Class 8 is one of the contributing factors in the decline of the former Homewood Hotel, Peelman said.
The $900,000 in TIF money, on the other hand, is intended to cover property acquisition costs and other “soft costs” such as design and engineering reviews, according to Wallrich.
“This is something that doesn’t come lightly and without a lot of thought,” Wallrich said. “What would happen if we didn’t have Dr. Gendreau looking at this property?
“I think about that building being vacant for how long?” she continued. “ I think about what the adaptive reuses would be for that building. Even if we were fortunate enough to have some entrepreneur interested in hotel use … the business model isn’t as strong as for someone who has that relationship, like Ravisloe, that can feed into this. I’m looking at this as a perfect fit.”
Trustee Ray Robertson, on the other hand, is looking at it as just the opposite.
“Everybody else sees the benefit of this. I don’t,” Robertson said. “I just don’t see an 18-room hotel being profitable. I don’t see anything that stops this from turning into one of the hotels on Halsted Street.”
Despite Robertson’s skepticism, the TIF money passed in a 4-1 vote (Trustee Tom Kataras was absent). As for the Class 8 designation, trustees only passed a recommendation. The decision is now in the hands of Cook County, which Peelman says he is optimistic about.
Grandeau plans to invest a total of $5.1 million into the redevelopment of 2034 Ridge Road. La Banque, or “The Bank,” hotel will feature 18 rooms, a lounge, a fitness center, a spa and a premier restaurant on the first floor. Gendreau said his new hotel will primarily cater to several of the large businesses in Homewood that routinely send guests out of town for overnight accommodations, including Ravisloe, which is already booked for weddings in 2013.
READ: Homewood Announces Hotel Plans for Central Business District
Gendreau hopes to start construction within the next month and have a completed project by the end of summer 2013.