Developers want to phase construction of stalled Holiday Inn project in Schaumburg
A local development partnership that had hoped by now to open a side-by-side Holiday Inn and Holiday Inn Express in Schaumburg is asking village officials for permission to build one first to generate enough money to build the other.
Representatives of EquityRoots Holdings LLC will seek a favorable recommendation on their revised construction plan by the village board's Planning, Building and Development Committee at 7 p.m. Thursday, Aug. 1.
The two hotels were approved for construction in March 2017 at 30 and 40 N. Martingale Road, just south of the Chicago Marriott Schaumburg, which is undergoing a $22 million renovation.
The year before, with the proposal pending, village officials hired a consultant to confirm there was sufficient demand in the market for what would still be Schaumburg's 31st and 32nd hotels.
When EquityRoots Holdings requested a Cook County Class 7C tax incentive for the financially stalled project in November 2017, village trustees' recommendation for it was contingent on the hotels being completed by June 2019.
In the end, the Cook County assessor didn't approve the incentive until March 2018.
The five-year tax break, which would take effect upon issuance of the occupancy permits for both hotels, allows for a reduced assessment.
While such commercial properties are normally assessed at 25% of market value, the 7C incentive would reduce the assessment to 10% for the first three years, 15% in the fourth year and 20% in the fifth before returning to normal.
But even with such a break, EquityRoots Holdings has said it has had difficulty securing the estimated $25 million needed to build the hotels.
With the $10 million the partnership has secured, its representatives now propose building the 87-room Holiday Inn Express as well as the pad for the 95-room Holiday Inn. They say the revenue generated by the one hotel will help secure financing for construction of the other.
The village board must first agree to amend the memorandum of conditions for the Class 7C application to allow for such a phased development.
The draft prepared by village staff would allow the project's permit fees to be frozen at the original 2017 levels for three years, but specify that the Cook County tax incentive not take effect until after both hotels are operational.
The three trustees on the Planning, Building and Development Committee are expected to make a recommendation on that request Thursday for their colleagues on the full village board to consider on Tuesday, Aug. 13.
EquityRoots bought the 5.3-acre site in December 2015. It has been vacant since the village annexed the former farm it was part of more than 30 years ago.