Naperville eyes $10 mil tax rebate for hotel project

For nearly a decade, Naperville has sought a full-service hotel on the city's east end and several developers tried to give them one. But parking issues, a failed purchase and ultimately a tanked hospitality market stood in the way.

The Janko Group, a Deerfield developer on the verge of purchasing the hotel at Naper Blvd. and Diehl Road, made the latest pitch late Wednesday and promised the city a Marriott Hotel complete with a $25 million renovation. But they can only do the project with an incremental $10 million sales and hotel tax rebate from the city and approval from Marriott, which they expect to get on Nov. 19.

Without either deal, Janko Acquisitions Director Greg Spanos told the council the hotel will likely close when, or before, the Holiday Inn franchise flag expires in March 2011.

Council members Wednesday unanimously approved the deal, which states from the proposed 2012 opening of the hotel until $7.5 million in rebates is collected, the rebate will be 1 percent in sales tax and 4.4 percent hotel tax. After $7.5 million in rebates is reached, the rebate will be reduced by half until a rebate of $10 million is achieved, or for 20 years, whichever comes first.

The incentives then provide Janko with the ability to get equity financing and begin the renovations as soon as January.

“We believe the size, location, Marriott affiliation and community partnership will make this hotel the highest-quality lodging asset and best physical product in Naperville,” Spanos said. “We also believe our combined development, construction and management expertise will yield a best-in-class flagship Marriott at Naperville's front door.”

Spanos also estimated Janko would employ 85 to 125 construction workers throughout the 12-14 month renovation phase and 15 to 20 percent increase in hotel staff upon its opening.

“We think this has tremendous positive ripple effect for the local economy,” he said.

Councilman Grant Wehrli agreed, calling this exactly the type of project he believes will help turn the local economy around.