Naperville grants $7.5 million in incentives for Freedom Plaza
The developers of Freedom Plaza in north Naperville plan to be moving dirt by early August as they build a 1,000-seat banquet facility and hotel -- an amenity the city has sought for years.
The city council Tuesday night unanimously approved $7.5 million in incentives for Lakhany Group Investments LLC, mainly in the form of hotel tax and retail sales tax rebates to be given over the next 20 years.
Lakhany Group is building a 168-room Embassy Suites hotel with a 13,000-square-foot ballroom for banquets, along with four free-standing restaurants on 13 acres west of the Freedom Commons development. The new hotel and restaurants will be accessible from Independence Avenue and Abriter Court, and they are expected to be open for business by summer 2014.
"We're excited to move forward," said Samir Lakhany, vice president of Superhost Enterprise, the parent company of Lakhany Group Investments. "We're looking forward to starting construction shortly."
The council granted incentives because Lakhany Group said it would be unable to build Freedom Plaza without such assistance. The incentives are in line with those given to other hotels including Hotel Arista and the future Water Street development, and they help the city meet all its hotel-related aims, City Manager Doug Krieger said in a memo.
"The city has now achieved all of our long-standing capital goals regarding hotel construction: a new luxury hotel, reflagging and upgrading of the largest full-service hotel in Naperville, a downtown hotel and construction of a hotel conference center with seating for over 1,000 people," Krieger wrote.
The Freedom Plaza developer will receive a full rebate of the 4.4 percent hotel tax and a 75 percent rebate of the 1 percent retail sales tax paid from the hotel and conference center until the incentive cap of $7.5 million is reached or 20 years pass. Sales taxes from the restaurants will not be rebated.
Also factoring into the $7.5 million cap are city sales tax rebates on up to $500,000 worth of construction purchases made from Naperville businesses and the $28,000 cost of buying rights to Abriter Court between Diehl Road and I-88.
Lakhany said the hotel tax rebate was the most essential part of the deal, as it will make up the largest financial piece of the rebates his company is set to receive.
He also said he has been receiving "very strong interest" from restaurants similar to the well-known establishments like Maggiano's and White Chocolate Grill in Freedom Commons, and he hopes to announce soon the names of the eateries to be included in his $50 million to $60 million development.
Lakhany Group will be back before the city council in August for final approval of plans, which is likely to occur after some initial work has started.