Hilton hotel to be built where La Quinta stood at Elk Grove Village entryway
The spot where a La Quinta Inn motel stood for decades at the entryway to Elk Grove Village is set to be the construction site for a Home2 Suites by Hilton hotel.
The new 5-story, 115-room hotel is part of an $18 million redevelopment of the northeast corner of Oakton Street and Busse Road by Oak Brook-based Aim High Hospitality.
Plans also call for a 3,500-square-foot retail outlot building to house a restaurant at the corner, where a White Castle had stood.
Elk Grove Village officials, who purchased the properties last year so they could be flipped, inked a redevelopment agreement last week with Paul Khanna of Aim High Hospitality.
Village officials said they want the three-acre site to be redeveloped “to eliminate existing blighting conditions, attract additional private investment in the business park, ensure the ongoing stability of the village’s tax base for it and overlapping taxing districts, and to stop the decline in the assessed valuation of the property and surrounding areas,” according to the agreement.
The developer said without public subsidies promised in the deal, the project wouldn’t be financially feasible.
The village will convey the property title to the developer for $1 once the project receives all governmental approvals, has secured financing, and gets a corporate commitment from Hilton to build the hotel, the agreement states.
The village also agreed to provide $500,000 for additional site work. And officials promised to support the developer’s application for a Cook County Class 7b property tax incentive, which would allow the site to be assessed at lower levels for a dozen years.
Aim High must give the village a $100,000 deposit — which can be refunded once building permits are issued — and a $4 million irrevocable standby letter of credit “allowing the village to make itself whole in the event the developer fails to complete construction,” the agreement says.
The village will be allowed to draw down on the letter of credit if the developer doesn’t hit certain construction deadlines. The village will release any remaining balance once it issues an occupancy permit, per the agreement.
Elk Grove Village paid $10 million in April 2023 for the La Quinta, which closed shortly thereafter, and $900,000 in March 2023 for the vacant White Castle restaurant and drive-through. Both buildings were demolished, with the intention of combining the two vacant sites for one larger development, officials said at the time.
The 88,000-square-foot hotel will include a fitness center, meeting rooms and indoor pool. The projected average daily room rate is $125, officials said.
The name of the restaurant planned for the former White Castle parcel wasn’t announced.
The developer projected that 55 jobs would be directly created by the redevelopment, and another 110 jobs indirectly related to the project.
A timeline calls for plans to be submitted to village hall within 90 days, which would include a petition for rezoning from industrial to business. Construction would begin by April 2025 and be complete by July 2026.