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La Salle did the right thing on the Kaskaskia

La Salle City Council members did the right thing this month when most of the aldermen voted in favor of tax incentives for redevelopment of the Kaskaskia Hotel.

The city’s action will now make it possible for investors and owners to redevelop the 104-year-old landmark, listed on the National Register of Historic Places since 1998. La Salle isn’t losing anything, and has everything to gain.

The incentives essentially surrender tax revenue that the city never would see if the hotel redevelopment doesn’t take place. Let me cite two examples of incentives causing investment to take place elsewhere, and hotel projects spurring downtown redevelopment. In Muscatine, Iowa, (this writer’s hometown) the state hotel tax rebate program and a TIF (Tax Increment Financing district) created by the city spurred the new construction of the multi-story, $42 million, 80-room Merrill Hotel overlooking the Mississippi riverfront.

The developers indicated the hotel would create 70 jobs and lead to more development, revenue and employment nearby. A couple of downtown nightspots always have been bustling places on weekend nights in Muscatine, but the downtown has been busy by day and evening since the 2017 construction of the luxury hotel in a rather unlikely location. A brewery popped up nearby and more downtown storefronts have been filled, too.

I also recently took an Amtrak trip through the Appalachian Mountains and stayed at a boutique hotel in an historic, renovated warehouse less than 30 yards from a train depot in Virginia. Five historic districts are thriving in the city of Staunton and since the renovation of the hotel the city has been receiving millions of dollars in investment in recent years from entrepreneurs setting up wine-tasting rooms, gift shops, meeting spaces, offices, restaurants and more.

The $21 million restoration in 2006 of the Stonewall Jackson Hotel became one main driver of the rescue and resurgence of historic downtown Staunton, and Virginia’s Historic Rehabilitation Tax Credit Program drove that hotel project. By the way, the multi-story Stonewall Jackson Hotel, built in 1924 and featuring a brick façade with white trim, resembles the Kaskaskia in many ways.

Here’s a review of what the La Salle City Council approved last week:

  • The city will give back to the Kaskaskia 100% of the pillow tax collected from the hotel’s guests for the first 10 years of operation, followed by 50% given back to the Kaskaskia for years 11-15 and then 25% given back for years 16-20.
  • The Kaskaskia also will get back 100% of its sales tax revenue for the first 10 years of operation, followed by 50% for years 11-15 and then receiving 25% of the sales tax collected for years 16-20.
  • The council also agreed to a major tax-increment financing agreement. La Salle will reimburse the developer 100% of the annual “net” incremental increase in real estate tax generated over the base year (assessed year 2006) by the developer’s project (the “property tax net increment”) for the reimbursement of the developer’s eligible project costs.
  • The city also set a deadline. The agreement says the owner can’t start construction or rehabilitation later than Dec. 31, 2020, and the rehabilitation of the project must be completed within three years of commencement (unless delayed by things like fire or other casualty or catastrophe).

The council took action in good faith to allow progress. “In the long run, it’ll be a benefit for the city,” Mayor Jeff Grove said about the business last Monday.

Craig Sterrett can be reached at (815) 220-6935 or Follow him on Twitter @NT_NewsEditor.

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