Elk Grove Village to buy shuttered hotel for $11.3M, then tear it down for redevelopment

Elk Grove Village is buying a shuttered hotel in the middle of its sprawling business park for $11.3 million, with plans to knock it down and market the property to developers.

The hotel — built in 1968 and renovated in 2016 — operated for years on the southwest corner of Busse and Landmeier roads as a Holiday Inn and recently as the Grand Royal Hotel O’Hare-Chicago. But it closed in recent months amid code violations and village inspectors placing a notice on the front door deeming it not fit for occupancy.

“The property is currently in a state of disrepair, has been placarder by the village, and has had its water service disconnected, contributing to blighted conditions within the redevelopment area,” according to the purchase and sale agreement inked this week between village officials and the seller.

The 4.25-acre property at 1000 Busse Road is being sold in as-is, where-is condition by Centric Hospitality, controlled by Ghanshyam Patel of Munster, Indiana.

The village is paying cash, using money from its Busse-Elmhurst tax increment financing district fund. Officials have done the same in other parts of town, then later sold properties for the same amount after finding a developer.

“In Elk Grove, we like the idea of driving the bus, not riding the bus,” said Mayor Craig Johnson. “We had the opportunity to purchase it, we’re going to take advantage of the opportunity and see new development coming.”

Included in the purchase of the 102,259-square-foot building is the four-story hotel and an attached bar/restaurant, which operated for years as Shelby Campbell’s Tavern & Grill but later was changed to Neon Moon Bar & Music. Not included in the deal is the neighboring property at the immediate corner, a 7-Eleven and Mobil gas station.

A closing is scheduled for May, following a due diligence period to conduct inspections and tests, including property condition and environmental assessments.