New hotel pitch on the table in Fox Lake
Fox Lake village officials have been courted four times since 1998 by developers looking to build a hotel on the Chain O' Lakes.
But the only things the village has to show for those efforts are several failed architecture plans and a hill of mud, weeds and grass overlooking busy Route 12.
Mayor Donny Schmit hopes a new attempt to build a hotel on the 19-acre Sayles property near Eagle Point Road is the real deal. He said he's working to line up support from other local taxing bodies to extend a special taxing district on the site to move the plan forward.
“Nothing has gone before the village board at this point. Nothing is approved,” Schmit said. “We are being very cautious with the whole project because of what has happened to hotel ideas in the past.”
Schmit said Peoria-based Greystone Realty Group Inc. has not made a formal presentation to the board, but the developers did file a preliminary plan with the village that explained the nuts and bolts of the project.
Those plans call for a 80- to 100-room hotel on the vacant site between Ben Watt's Marina and Eagle Point Road, Schmit said. He would not say what hotel chain has been in on the discussions.
The hotel would be the first phase of a three-phrase project that also would include retail shops and a senior living center. The property also boasts 4 acres of prime inlet water access next to a marina with 300 boat slips.
Keith Weinstein, president of Greystone Realty, called the parcel “an ideal setting” and said Fox Lake has “a substantial retail, hospitality and senior housing demand.”
A lighted walking trail would be linked from the property to the village trail that feeds to the Fox Lake Metra station from Rollins Road.
“This could really be a springboard for the village,” Schmit said. “It would really help the economy here, plus create areas for future development.”
But the first task is extending the tax increment financing district now in place on the site, Schmit said. Developers are requesting the district be extended by 12 years to help them recoup some costs.
“I agreed, but only if it's OK with the schools and other taxing bodies,” Schmit said. “In the end, the village will not be contributing any money to the project, except through the TIF district.”
A TIF district is a method of financially rewarding a developer for improving a blighted area. When the district is created, village leaders freeze property tax rates normally paid out to villages, school districts and other local taxing bodies. Any increase in property taxes generated after the area is redeveloped over the frozen tax rate is returned to the developer to offset improvement costs.
Village leaders approved the creation of a 23-year district on the Sayles property in 2004 to spur development, but a project never materialized. Schmit said developers are asking to extend the district's life to 2039 instead of a 2027 expiration.
“The developer is indicating that without the TIF extension, the project is not feasible for him financially,” Schmit said. “So, I have been meeting with each taxing body over the last month or two regarding the TIF to make sure it would not hurt them if it's extended.”
The Grant High School District 124 school board recently approved the extension.
Superintendent Christie Sefcik said the school board chose to do so because the property is “so important to the community,” and extending the length of the district would financially benefit the school in the long run.
“In it's current state, the property (value) is estimated at approximately $1.5 million. If fully developed, the property is estimated at $47 million,” Sefcik said. “It would generate significant tax revenues to the district at the conclusion of the TIF while not generating any students during or after.”
After each taxing body approves the extension, Schmit said, the measure would need to be approved by the state legislature. He said he has discussed the extension with state Sen. Pam Althoff, a Republican from McHenry.
When that is complete, he said, developers would come before the village board to present the project.
While the developer has not provided hard numbers regarding the project, Schmit said it would cost $40 million to $50 million to complete.
“I think it would be a huge boost to the village of Fox Lake,” said Linnea Pioro, executive director of the Fox Lake Area Chamber of Commerce.
She said a hotel would create overnight stays for travelers and visitors, resulting in a trickledown economic boost for local business.
“They would go out to dinner, they would get hair and nails done, they would go out at night or order in when they stay in for the evening,” Pioro said. “I know every administration has tried to bring in a hotel. Hopefully it happens this time.”
At the start of the 20th century, Fox Lake was a tourist destination and boasted about 30 hotels operating on or near the Chain. However, those days — and the hotels — are long gone. Officials say the last hotel to operate in the village, the Waltonian, closed around 1980.
Bringing a new hotel to Fox Lake has been the unobtainable Holy Grail for mayors since 1997:
• Former Mayor Jim Pappas announced a new hotel would open on Route 134 near the old Big Hollow school site at Route 12. That project never panned out, and the land was added to a Cambridge Homes residential development.
• A 92-room hotel and 15,000-square-foot indoor water park on the Sayles property was announced during former Mayor Nancy Koske's administration in 2003. Developer Don Peeple's requested the TIF district for the site, and village officials approved it in 2004. Peeple's pulled out of the project in February 2006, citing financial issues.
• Four months later, former Mayor Cindy Irwin announced that Iowa-based Nathaniel Group purchased the Sayles property and planned to build a 110-room hotel, a family entertainment center and 500-seat banquet hall. After part of the site was cleared, the group folded, a legal battle erupted between partners, and the bank eventually foreclosed on the property.
• In 2013, former Mayor Ed Bender said developers issued a letter of intent to build a hotel and restaurant on the village-owned Lakefront Park on Nippersink Drive. Schmit said the deal fell through after he was named mayor in the 2013 spring election.
“I really don't know why (a hotel) hasn't happened yet,” he said. “The economy seems to be the reason why it hasn't happened in the past three or four years, but before that, I really don't know.”
Schmit said he's hopeful this deal gets done because a hotel and retail center on Route 12 would add much-needed jobs and sales tax revenue to a village seeing retail dollars jump to other towns.
“I've been in contact with the bank and developers to make sure this succeeds,” he said. “Short of an economic downturn, this plan should work. It really is a solid plan.”