NORMAL — Less than two years after it opened, the owners of the Hyatt Place in uptown Normal are asking the town for money due to slow sales.

Normal City Council will consider Monday approving a hotel/motel tax rebate that would be $264,000 over the next three years if the hotel continues business at its current pace, according to town documents.

The agreement is necessary for ownership to get a new financing deal, said City Manager Mark Peterson.

Asked what would happen if the town didn't give the rebate, he said, "Certainly it's a possibility that the pending financing agreement would not go forward, which would be problematic for the hotel property."

That doesn't necessarily mean the hotel would close, however.

"Its performance isn't that bad, and the ownership group is absolutely committed to making this thing work," Peterson said, "but it certainly could impact its viability in the short term."

The deal would give the owners half of hotel/motel tax proceeds, which were $176,000 over the last year. If business improved significantly, the rebate would be much greater, but it would end after one year. The town could also pay 25 percent of hotel/motel tax if business improved by a smaller amount.

The town gave developer Tartan Realty Group $5.1 million and donated the land at 200 Broadway Ave. to get the hotel built.

"The cost of this rebate agreement is not insignificant; however, given the substantial private/public investment in this hotel property, the potential to rebate $88,000 per year for three years is not unreasonable," Peterson wrote in a memo to the council.

He said the town can work around an $88,000 annual loss in hotel/motel tax. The money to be used goes into the town's general fund for basic operations.

"The Hyatt has struggled to meet initial performance expectations given the rather stagnant nature of the hotel/motel market within the Bloomington-Normal area," Peterson wrote. "The Hyatt Place (will) implement new management and marketing strategies in order to increase its local market share."

Peterson said while the town has given incentives to hotels before, including the Marriott Hotel and Conference Center in uptown and the Radisson Hotel near Interstate 55, the Hyatt deal is unusual in that the business is open.

"I don't think there will be people flooding in (asking for incentives)," he said. "Hyatt did approach us and laid out all their information. ... We have a significant investment in that hotel. The town wants to protect that."

Peterson added he's personally vetted the refinancing, including the lender and the hotel's finances, but he can't share that information publicly.

The council meets 7 p.m. Monday on the fourth floor at Uptown Station.

Follow Derek Beigh on Twitter: @pg_beigh