NORMAL — Swift Hospitality still hopes to turn the former Holiday Inn in north Normal into a 160-room Radisson Hotel, but time is running out.
Normal City Manager Mark Peterson said that according to state statute, the tax increment financing district that covers the property at 8 Traders Circle will end in August unless the town has a redevelopment agreement for the property and work has started.
Swift Hospitality bought the foreclosed property in 2010 and had a redevelopment pact with the town that would have allowed the company to recover about $3.9 million in TIF money and about $1.7 million from the hotel/motel tax for seven years.
But the project did not get off the ground because of financing, and the redevelopment deal with the town has since expired.
David Swift, president and chief executive officer of the company, said financing was arranged three years ago but the bank got into trouble. Swift said he now is working with Dougherty & Co., an investment bank and brokerage firm from Minneapolis.
"We have 50 percent of the funding in place," he said Wednesday, adding he's hopeful the remainder of the funding will come through by the end of the first quarter of this year. "Once we have financing, we'll contact the city to redo the redevelopment agreement."
Peterson said he has told Swift that in order to consider another redevelopment agreement, the town "requires absolute proof of financing. The council will not consider it without proof financing has been secured."
The property has been on a roller coaster ride since 2005 when it was a Holiday Inn and faced unpaid utility bills and liquor, hotel/motel and food-and-beverage taxes. It changed to a Staywood Inn in January 2006 but a Springfield bank foreclosed on the property four months later, forcing it to close its doors.
In 2007, Global Hotel Management, a group of private developers, proposed investing $9 million in the property to turn it into a Crowne Plaza. The town pursued a TIF district so up to $2 million in TIF money could be used for the project. In a TIF district, a portion of property tax revenue is diverted to fund redevelopment incentives.
But two years later, after work had started on the project, the developers asked to end the agreement with the town after allegations that workers weren't being paid prevailing wage, as required by the agreement.
Swift Hospitality and Sand Lodging bought the property in a bank-authorized auction in 2010.
While a new roof and windows were put in by the previous owners, Peterson said "Whenever a building is not occupied, it slowly begins to deteriorate inside and out. It's beginning to show signs of neglect. The town is concerned about the property."