JOLIET – A developer is backing away from renovations they planned for the Hotel Plaza in Joliet.
At Thursday’s land use and legislative committee meeting, Joliet City Manager Jim Hock told committee members that Kinzie Group no longer plans to renovate the upper three floors of Hotel Plaza, located at 26 W. Clinton St.
The developer told city officials the costs of renovations – even with tax increment financing – does not create a large enough gap of income for a private company to take on, he said. Hock said Kinzie Group wants to come in and explain to city officials why the renovations will not happen.
City officials suspect the property will go back on the market when the deal falls through.
“We are going to work with some potential developers because this group said they’d be willing to share not only their financial calculations, but even the plans they had for renovations,” he said.
Committee members also received an update on Joliet’s City Center tax increment financing district, which was established in 2000 to stimulate redevelopment in Joliet’s downtown area, said Kendall Jackson, city planning and economic development director.
According to the city’s website, tax increment financing uses revenues from increased property valuations within the district to fund improvements.
He said with nine years left in the lifespan of the City Center TIF districts, city officials may want to consider either extending its life or creating a new TIF district. State law requires TIF districts to last 23 years, he said.
If city officials decided to extend the life of the City Center TIF district, it would need approval by state legislature, along with needing to provide documents that show a need and evidence of support from other taxing bodies, he said. An extension would add 12 years after the nine years expired, he said.
In order to create a new TIF district, city officials would have to hire consultant to conduct an eligibility study that takes between nine to 12 months to complete. The study would also cost between roughly $30,000 to $60,000.
A new TIF district would last another 23 years, he said.
“Nine years will be up fairly shortly,” he said. “We’ve heard from other developers they would like some assurance this TIF will be in place, that this tool is probably the main tool that we have will be in pace downtown for a number of years,” he said.