Commercial developer Paul Lynch, president of PLH & Associates LLC., is negotiating with village officials over the amount of tax incremental financing his company will receive for a hotel it plans to build on Park Street.
Lynch, an Oregon resident, intends to build a 69-room Holiday Inn Express in the village's newly created tax incremental financing district (TIF 4). He is seeking an unspecified amount of funding from new taxes the hotel would generate.
But village officials, who would not comment on the deal other than to say they hope an agreement is reached "fairly quickly," are proceeding cautiously in the negotiations. There is some concern that if they agree to return too much in tax dollars to the developer, there would not be enough left to help fund other projects in the new TIF district.
TIF 4 is an area bordered by Janesville Street to the north, Hwy. 14 to the east, South Perry Parkway to the west and Wolf Street and Concord Drive to the south.
In tax incremental financing, the municipality agrees to share with the developer a percentage of the tax revenue generated by a new development, for a specific period of time. The developer typically uses the money to pay down the debt on the new property, and the municipality uses the remainder of the new tax money for infrastructure improvements within the TIF district.
Lynch plans to build a $4.1 million hotel in a vacant lot on Park Street across from the former El Rio Grande (and, previously, The Waterfall) restaurant. He said the 2.8-acre site currently generates about $4,500 a year in property taxes. That figure would increase to about $71,000 annually once the 45,000-square-foot hotel is built, Lynch said, and there would be other benefits to the village as well.
"Once that hotel goes in, it's going to set everything else off over here," Lynch said in an interview last week. "But they need that one big project, and they're getting it right off the bat. Usually you don't - you get little things here and there. But this will certainly draw interest in this side of town."
He said the two sides "are not that far off" in how much the village is willing to promise in tax increments: "I think actually it's a win-win, but it's tipping more to the village. But if I can just get enough to get this thing to work, I'm OK with that."
In April, when the Planning Commission and Village Board approved Lynch's development plan, he was hoping to break ground in June. Now Lynch says it's important to get construction under way no later than early November so that the hotel could be open next spring, in time for the travel season.
"If I can get something solidified (in negotiations with officials) within the month, we could be putting a shovel in the ground Nov. 1," Lynch said. "Then it's winter construction, and we're talking six to eight months. We need to have this open before people start traveling in June."
