This hotel aid idea needs scrutiny

Many local municipal officials have been open in recent months to doing what they can to provide more aid than usual to local developers.

In this recessionary economy, that only makes sense.

But a proposal an Oak Brook hotel operator is pushing for the Westin Chicago North Shore in Wheeling gives us pause.

As Daily Herald reporter Sheila Ahern reported recently, Mike Firsel of Harp Mid-America Investment in Oak Brook is asking Wheeling officials to approve a 4 percent conference center tax that, as proposed, for now would apply only to the Westin's hotel, conference and dining guests.

Firsel wants the village to levy the tax and then turn what he estimates would be $1 million per year over to him. He would then perhaps use it, he says, to regain controlling interest in the property from Marathon Funds, a New York partner firm that bought into the project two years ago. Firsel also says the funds would be used to add 100 parking spaces at the site and to create more open space at forest preserve land nearby. Firsel says Marathon Funds isn't interested in investing in more parking and open space.

The idea is a creative one. That we won't argue. But it seems an ill-advised attempt to drag government into a problem that should be worked out among private partners. If Wheeling raises a tax to help this one hotel partner gain power over another and essentially fund improvements that should be handled privately, what's to stop every other hotelier or restaurateur or home or condo builder from doing the same? What's to stop others in other communities from trying the same tack? Would this tax end at some point, or would the Oak Brook firm continue to benefit?

We understand why levying a tax is more appealing than raising rates as it's typically the basic room rate that is disclosed and advertised publicly. Increasing a tax allows the hotel to appear to still be competitive with nearby hotels.

But with the tax, guests' bills will be higher than those in the surrounding region, and that word will get out eventually.

Trustee Ray Lang told Ahern levying the tax would not hurt the village's general fund and won't cost the village or its residents anything, unless of course many of them eat at the hotel's restaurants or splurge on a stay.

With more than one of the hotel's restaurants already closing since the facility's 2006 open, we empathize with local officials who want to help it survive the economic storm and thrive again.

But we question the wisdom of any government passing special legislation, especially a tax increase, to the benefit of just one party.

We're even more concerned about a local government putting itself in the middle of a disagreement between two business operators. This will be one to watch. To Wheeling officials, we say, proceed with caution.