Jon Davidshofer with Bettendorf, Iowa-based Build to Suit, Inc., left, and Ryan Tanner with Tanninger Companies listen to speakers during Monday's Finance Committee meeting at the Quincy Regional Training Center. | David Adam
QUINCY — When Finance Committee Chairman Mike Rein asked for justification to increase the amount of TIF money from $500,000 to $1.5 million given to a local hotel development project, Director of Planning Chuck Bevelheimer explained the financial reasons.
Then he gave everyone at Monday’s meeting in the Quincy Regional Training Center a history lesson.
“The project is more expensive than it was the first time around,” Bevelheimer replied. “Construction costs have elevated. The number of rooms have increased, almost doubled. The cost, as a result of that, has gone up. So we’re trying to figure out a way to support the project. It’s a downtown project and a vacant building.
“I just would hate to see this turn into another Newcomb.”
The five-story Newcomb Hotel on the southeast corner of Fourth and Maine was gutted by a five-alarm fire on Sept. 6, 2013. The Quincy City Council had agreed less than two weeks earlier to enter into negotiations with Frantz-Hobart Community Investors of Cedar Rapids, Iowa, in hopes of revitalizing the hotel, which had stood vacant for more than 30 years.
The Quincy City Council’s Finance Committee sent to the full City Council a proposal for a $1.5 million tax rebate to convert the former Illinois State Bank on the northwest corner of Sixth and Hampshire into a hotel.
However, it did so without a recommendation.
Aldermen approved $500,000 in tax increment financing (TIF) funds in May 2021for public health and safety improvements as part of a $10 million proposed renovation of the seven-story Illinois State Bank Building, 531 Hampshire. However, that money was insufficient to convert the space into a 25-room boutique hotel with a rooftop bar and a restaurant.
Developer Ryan Tanner and partner Jay Krottinger are pursuing the project through their Tulsa-based Tanninger Companies — which renovated the Patio Restaurant (reopening it in February 2021) and theQuincy Armory Event Center, the former Fifth Infantry Armory building at 416 Jersey which reopened in 2023 as a site for private events, trade shows, live music and more.
Tanner and Jon Davidshofer with Bettendorf, Iowa-based Build to Suit, Inc., went before the Finance Committee on Monday at the Quincy Regional Training Center to explain plans to convert the former bank into a 57-room hotel — now projected to cost $15 million. Tanniger Companies received a $3 million Illinois Historic Preservation tax credit in April to preserve the architectural features of the building, which is on the register of National Historic Places.
Two economic development incentives are part of the proposal.
The city will reimburse Tanniger 50 percent of the portion of the annual property taxes generated by the hotel that would be directed to TIF East until Dec. 31, 2033. That figure would not exceed $750,000. The city also agrees to reimburse Tanniger 50 percent of the local hotel/motel sales tax generated by the hotel for a period of 10 years or until Tanniger has received $750,000, whichever occurs first.
The reimbursem*nt of both taxes would begin once the city issues a certificate of occupancy for the hotel.
Based on 70 percent occupancy, Davidshofer projected about $2 million in gross sales annually and an increase of $185,000 in annual real estate taxes. He projected about $100,000 a year in hotel/motel sales taxes. The city currently receives about $40,000 annually in real estate taxes from the empty building.
“In the previous proposal, we just had to get our doors open to receive the TIF dollars,” Tanner said. “Now what’s required of us is to be successful. Currently, the way it’s working with that building, the only tax dollars that are coming in are from property taxes. If we have to tear down the building, there’s never going to be a hotel tax at all.
“We’ve been paying attention to the very important conversations that the city has around the TIF program. We’re very sensitive to that. We will try to do the best that we possibly can while preserving this building and improving the lives those who live here and have folks that are visiting. This is a very different ask that we’ve put together.”
Davidshofer thought the project could start early in 2025.
“I think this is going to be in the centerpiece of the Sixth Street renovation,” Quincy Mayor Mike Troup said. “The building has been empty for 10 years. This is the first developer that has worked on a plan. They have an economic plan that works, and the extra rooms help justify (the expense). Additional hotel space is something else Quincy has been working on this for several years.”
Bevelheimer said the city hopes to learn soon if it will receive a grant to be matched with TIF funds to rebuild Hampshire Street from Fifth to Eighth.
Rein asked for a statement to be added to the proposal sent to the full City Council preventing TIF East from being extended after it expires on Dec. 31, 2033.
“I don’t want somebody to come up and say, ‘Oh, well, let’s just extend that,’” he said.
“I don’t see that as being a problem,” Bevelheimer said. “That’s what we’re committed to up front, in terms of what we’re trying to do in the agreement. We can add that language if that’s what makes you feel comfortable.”
The full City Council will receive a resolution about the financing proposal in two weeks when the hotel developers are back in Quincy.
Asked why the Finance Committee didn’t make a recommendation to the City Council, Rein said, “Well, the committee didn’t want to do that. The committee thought it needed discussion without that kind of guidance.”
