Plans for two new hotels in Elk Grove Village hampered by pandemic
What's left of a shuttered motel at a busy corner in Elk Grove Village will be demolished, after a developer who planned to renovate and add onto it for a new hotel is backing out of the project due to the COVID-19 pandemic, officials said.
That also means the original plans for a second hotel and restaurants at the northwest corner of Oakton Street and Busse Road also are dead.
"Nobody's financing hotels. Nobody's financing restaurants. Nobody's financing anything," said Mayor Craig Johnson, though he hinted at prospects for future commercial development on the 7.4-acre site that, for now, will remain in the village's hands.
"We're looking for opportunities to expand that space," he said.
The village inked a redevelopment agreement with Sunrise Retail Development LLC just over a year ago, agreeing to sell parcels of the land as redevelopment occurs for about $1 million total. But if the developer were to default or if there were other delays in construction, the village had the right to reacquire any lot for $1, under terms of the deal.
The agreement called for shovels to be in the ground already on a $7 million, three-story Country Inn & Suites by Radisson, using a portion of the former Elk Grove Motel, which was partially removed.
Future phases proposed a $14 million, four-story Tru by Hilton hotel along to Oakton, and single-story outlot restaurants along Oakton and Busse. Each hotel would have had just under 100 rooms each.
The village bought the property for $5.6 million in August 2018, with an eye toward stimulating investment in the nearby business park.
But because of the pandemic's effect on the hospitality industry, the developer has pulled back on all new construction for the foreseeable future, officials said.
That led the village board Tuesday to approve a contract with Des Plaines-based Albrecht Enterprises to finish the demo job it started in the summer of 2019.