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TMCNet: City OKs $1.35 million in TIF funds

[December 18, 2009]

City OKs $1.35 million in TIF funds

EFFINGHAM, Dec 18, 2009 (Effingham Daily News - McClatchy-Tribune Information Services via COMTEX) -- The Thelma Keller Convention Center in Effingham may be the hub for many conferences and meetings, but the Effingham City Council believes a renovated convention center may be even better.


The council this week agreed to reimburse the developer $1,350,000 for $2,460,126 worth of renovations at the convention center through tax increment financing funds. However, the reimbursement also hinges on the developer completing an $8 million project, including construction of a new hotel.

Some of the remodeling plan includes an enlarged lobby and meeting room and a connecting corridor between the convention center and a new hotel that is being constructed on the south end of the convention center, along with other improvements. A new entrance also will be part of the remodeling and will include two automatic sliding doors.

The renovations of the convention center are part of a larger plan to construct a five-story Holiday Inn and Suites attached to the southeast end of the convention facility. TIF funds will only be used to remodel the convention center, not to build the hotel.

Richard Beatty, who owns the Hampton Inn, Best Western and Fairfield Inn and Suites, spoke during the city council meeting against the resolution to execute the redevelopment agreement.

Since so much money is being spent on renovations, Beatty felt the council should require Keller Development to show a contract before the agreement is executed as to how much each item will cost in the renovation.

Heritage Builders are the contractors that will remodel the convention center. Beatty questioned whether the project was bid out to other contractors that may be less expensive. Beatty felt the estimated total cost of construction "seemed a little fluffed and expensive" and said the council should require an official contract demonstrating estimated costs before TIF funds are granted to the project.

Beatty also indicated he was skeptical about the draw of the remodeled convention center because Keller also is involved in a Mattoon project that includes a new convention center and renovated hotel on the south side of that city. According to Beatty, "having two convention centers within 30 miles of each other" will have an impact on the amount of use the Effingham facility will be able to get.

Tourism as a whole is down a great deal, said Beatty, and he wanted proof the convention center and new hotel being constructed in Effingham will benefit the city. He also said he believes a new hotel in the city will take away from others already established here.

"Do we really need another 100 rooms in this town?" Beatty asked.

The convention center is located in a TIF district, which allows for TIF funds to be used in the renovation project.

Renovations at the convention center are expected to be completed in 2011, and TIF funds will be used to reimburse the developer $300,000 the first two years and $250,000 the following three years, after the developer demonstrates $8 million of improvements have been made on the property. The $8 million in improvements includes the new hotel, but TIF funds will only be used to remodel the existing convention center. In order to receive the full reimbursement, the convention center must remain in business until 2017.

In October, convention center Director Patty Greene presented the city council with the planned renovation plans. She said the convention center holds more than 30 conventions and 95 wedding receptions a year. According to Greene, the convention center has had to turn away some events because it was not large enough to hold the number of people involved in the event.

"We have to keep Effingham on the map," said Greene, referring to Effingham's central Illinois location. Convention centers in larger cities are typically more expensive to use, she added, which makes Effingham an ideal location for conferences and convention.

According to Greene, when conventions fill up hotel rooms at the Hilton Garden Inn and the Holiday Inn Express, guests who need a room are sent to other hotels in the city.

Beatty disagreed and said his hotels do not see much of the guest overflow.

Samantha Newburn may be reached at 217-347-7151 ext. 131 or samantha.newburn@effinghamdailynews.com.

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