After years of back-and-forth, the Park Ridge City Council now seems amenable to a new development incentive plan that uses some city resources – including money – to lure a development proposed for 1440 Higgins Road.
While the Dec. 2 City Council meeting did not include a firm vote on the development, city leaders got enough support from council members to begin drafting a formal economic incentive package the council would consider at a future meeting.
The plan, as it was proposed, will cost the city about $4.6 million in shared tax money, tax abatements, fee waivers and more. But, should the project develop fully, it will bring a Hilton-brand hotel with 112 rooms to the area, and property, hotel and sales tax revenues from visitors who would dine and shop local.
The project was delayed initially due to the COVID-19 pandemic. A proposal for the hotel marked the second planned development of the property, which the council approved in June.
However, the developers approached the council in August with a slightly different, more expensive request for $7.5 million in Park Ridge money and council members rejected it.
Now the developer, MDSA Properties, has a new plan that requires less from the city and say they are eager to start work on what will be a Tru by Hilton hotel.
In addition to what the developer has asked of the city of Park Ridge, they have requested property tax relief from Cook County. Additional incentive requests include hotel occupancy tax sharing for up to 12 years, waiving of permit fees for the project and relief from stormwater detention requirements.
Councilwoman Harmony Herrington said she was fine helping hotels with tax rebates, but waiving permit fees seemed overly generous.
“The abatement schedule is very specific to hotels,” she said. “But when we start giving certain developers advantages … it becomes very inequitable. I am just flat out against any kind of waiver for permitting fees.”
According to Hotel Appraisers and Advisors, independent hotel advisors to the city of Park Ridge, pretty much every hotel in the county has some sort of tax and other local incentives to support such projects in their costly initial stages. The hope is that future hotel tax revenue plus additional tourism spending will make up for the cost.
Hilton franchisee Amin Lakhani told the City Council at the Dec. 2 meeting he would like to get the tax abatement agreement taken care of because it is needed to begin demolishing the current structure on the property. According to his timeline, the tear-down would start next year in late winter, then construction would begin the following spring.
City Council members did not offer formal approval for anything at the Monday night meeting, but generally seemed largely amenable to the proposal. City staff is now expected to draft a formal economic incentive agreement from council members’ consideration.
City Manager Joe Gilmore backed the proposal and said it could add to the city.
“The short answer is yes, I think it’s a good move for the city of Park Ridge,” Gilmore said.
He explained the new plan makes economic sense and, he emphasized, virtually every hotel in the county gets similar local benefits.
“There really aren’t any that are viable without them,” he said about hotel projects and the incentive packages they usually receive. “Given those incentives, then the question is what are we comfortable with.”
He said even sharing the occupancy tax revenue means the city has at least some new revenue, plus whatever else the visitors bring.
“Obviously there’s a benefit to our community through foot traffic and revenue and additional sales tax to the city. I think this is a benefit to us,” he said.
Even so, not every council member was amenable to all the conditions.
Some wanted assurances that the developer couldn’t get the incentive deals and then just sell the land and the development to another company for another project and make more money because of the development incentives that went with it.
City Council attorney Michael Durkin said he would look into whether any of the development incentives could be transferred.
Mayor Marty Maloney took an informal poll and most on the council favored some kind of development incentive plan.
“It’s not an overwhelming majority, but it’s more in favor of something,” he said.
The council is expected to revisit the issue later for additional consideration.
Jesse Wright is a freelancer.
