Elk Grove TIF to fund redevelopment of newly annexed motel, former nightclub site

  • The former Phoenix nightclub along Higgins Road in Elk Grove Village was demolished last year, and is now part of a 9.25-acre tax increment financing district created to spur redevelopment.

    The former Phoenix nightclub along Higgins Road in Elk Grove Village was demolished last year, and is now part of a 9.25-acre tax increment financing district created to spur redevelopment. John Starks | Staff Photographer, 2020

 
 
Posted7/6/2021 5:30 AM

Elk Grove Village has implemented a tax increment financing district for a newly annexed area officials have long eyed for redevelopment along Higgins Road near Oakton Street.

The 9.25-acre district includes a Jiffy Lube, a McDonald's restaurant, the site of the former Phoenix/Hunters nightclub the village bought and demolished last year, and a Days Inn motel the village purchased last month and plans to tear down this summer.

 

Village officials said the TIF is being created to facilitate redevelopment of obsolete and deteriorated properties that have an adverse impact on the adjacent business park, where a much larger 917-acre TIF was established in 2014.

Now that the village board voted on a set of TIF ordinances last week, property taxes paid to local governments will be frozen at their current levels for as many as 23 years. Taxes above those levels collected within the area will go into a special village fund to pay for redevelopment efforts.

Those redevelopment costs, as detailed in a village-commissioned TIF eligibility report by consultant Camiros Ltd., are estimated at $25 million. It includes $15 million for property assembly, including acquisition, demolition, site preparation, relocation and environmental remediation.

Mayor Craig Johnson said the two-building motel complex is scheduled to close July 30, and the village plans to demolish it in August or early September. The village tried to buy the motel a year and a half ago, but talks fell through, he added.

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In February -- after the earlier voluntary annexations of the Jiffy Lube and McDonald's sites led to the forced annexation of the Days Inn -- the village sent the motel an itemized list of code violations that owner Sonny Patel said would have cost him $500,000 to remediate.

Inspections found numerous code violations, village officials said, including a gas leak, electrical code problems, lack of fire extinguishers, exposed electrical wiring, missing smoke detectors and water damaged ceiling tiles.

Talks resumed over a possible sale, and last month, the village and Patel came to terms on a $4.25 million contract.

"It is scary," Johnson said of the 57-year-old motel, originally opened by the Hyatt Corp. "It's time. This is the perfect time for the owner and the village. It needs to go and it is going."

The village plans to clear the site, though there aren't any set plans for the property right now, Johnson said.

It could be combined with the former nightclub site next door for a larger redevelopment, he added.

The shuttered LGBTQ bar was demolished in October, after the village paid $1.35 million to its most recent owner, Sam Cecola, the Barrington businessman who also owns the Admiral Theatre strip club in Chicago.

Johnson said the 33-year-old McDonald's and 35-year-old Jiffy Lube will remain intact, and be connected to the village's water and sewer systems.

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