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Local News

Joliet hotel developer says it needs more incentives to cover union labor costs

JOLIET – The potential developer of a Joliet hotel-conference center wants more tax incentives, saying the project otherwise is too expensive to build with all-union labor like the city wants.

The project slated for a Houbolt Road site near Interstate 80 has been stalled since the city two years ago approved a tax incentive package worth up to $3 million.

Its future may become more clear in the coming weeks. The city plans to review an analyst’s report on what tax incentives are needed to build the hotel at a City Council committee meeting before the end of September.

The Hospitality Guru Group in Aurora has proposed building two hotels, totaling 200 rooms, connected to a conference center, restaurant and fitness center. At one point, construction was to start in the summer of 2014 with the complex opening this year.

But work has not begun, and city officials have been meeting with Guru developers who want to increase the incentive package or relax the union labor requirements that came with the tax breaks.

Sejal Patel, a partner with Hospitality Guru, said Friday that the company wants more incentives because of the costs associated with using all-union labor for the project.

“We’re still negotiating with the city, but the union costs are higher than expected,” Patel said. “The city is pushing to use all union. It’s not feasible at those costs.”

Patel said the labor costs were not known when Hospitality Guru negotiated the incentive package with the city.

Mayor Bob O’Dekirk said he would not agree to more incentives or relaxing the union requirements in the incentive agreement.

“They’ve come to us a couple of times looking for more,” O’Dekirk said. “We’ve pretty much held the line on what we’re going to do. I think it was a pretty generous agreement to begin with.”

The tax package in 2013 stirred some concerns among hotel and restaurant operators that faced new competition from the project. The owners of the longtime Holiday Inn on Larkin Avenue, which also has a conference center, switched to the Clarion brand as Holiday Inn planned to put its name on the new hotel on Houbolt.

But the conference center was seen as an attractive addition to Joliet because it could bring in more business meetings and conventions.

City Manager Jim Hock said the city hired SB Friedman, a development consultant, to review the incentive package in place. Hock said SB Friedman’s report will be reviewed at a meeting of the Joliet City Council Economic Development Committee sometime before the end of September.

Patel said he saw the report, and, “In that study, it did say more incentives are needed.”

Meanwhile, Patel plans to come to the City Council meeting Tuesday. The Guru Hospitality project is not on the agenda, but Patel said he will be there in case the council “has any questions.”

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