Naperville offering $7.5 million to Freedom Plaza developer
Naperville city councilmen on Tuesday indicated they are willing to provide $7.5 million worth of incentives to the developer of a long-sought hotel and conference center planned for Freedom Plaza on the city's north side.
City staff members now will draft a formal incentive agreement to present to Lakhany Group Investments LLC, which aims to begin construction in August of a hotel, conference center and four free-standing restaurants on a 13-acre site on Abriter Court between Diehl Road and I-88 west of Freedom Commons shopping center.
Councilmen decreased the incentives from what originally was proposed by Lakhany Group's attorney Russ Whitaker but suggested the package include several types of tax rebates payable over 20 years or until the full $7.5 million value is reached.
“My cap is the $7.5 million,” councilman Steve Chirico said. “I want this deal, but I'm not going to support more.”
The incentives include a full rebate of the hotel tax and a 75 percent rebate of city sales tax paid by the hotel and conference center, as well as city sales tax rebates on up to $500,000 worth of construction purchases made from Naperville businesses.
Councilmen also unanimously moved for the deal to include a rebate of no more than $28,000 for the purchase of rights to Abriter Court, a cul-de-sac that dead-ends into the land where the $50 million to $60 million development will be built.
Whitaker said incentives are necessary to make this type of large-scale hotel and conference center project possible, and the developer was looking to cut upfront costs as much as possible by also seeking a waiver of $23,000 in fees for review of final engineering plans.
Councilmen were not on board with a development fee waiver, with five of them saying those fees cover the staff time spent on the project and represent the cost of doing business in the city.
“The idea of rebating the fees I have a problem with,” councilman Joseph McElroy said.
Councilman Doug Krause said he did not want to get too bogged down in nickle-and-dime details of the incentive offer because he is more focused on the broader value the Freedom Plaza project can bring to Naperville.
Developers received approval earlier this month to build a 156,000-square-foot Embassy Suites Hotel with 168 rooms, a 13,000-square-foot ballroom and four free-standing restaurants in an area Krause said is “landlocked by a cul-de-sac.”
The conference center will accommodate at least 1,000 people, bringing to Naperville a major event venue, “the only product the city has been out there for over a decade saying 'Hey, we want one of these,'” City Manager Doug Krieger said.
The council is expected to consider the formal incentive agreement during its next meeting at 7 p.m. July 16 in the municipal center, 400 S. Eagle St.