By Michael S. Hoey
Correspondent
The Delavan Common Council approved a developer’s agreement Dec. 10 with Best Hospitality LLC to guide the redevelopment of the former Delavan House Hotel at 215 E. Walworth St.
“We are happy to announce that the former hotel has been sold,” City Administrator Denise Pieroni said.
Sean Patel, owner of the Delavan Super 8, bought the hotel Nov. 22 and plans to open a new hotel on the site by May 1. A franchise for the hotel has not yet been determined.
“This has been a top priority for the council for several years,” Pieroni said. “We are very excited to see the project move forward.”
Pieroni said the city is happy to see a new owner come in and re-open the business as a hotel with first-floor retail. Patel plans to open a Subway restaurant, a Starbuck’s and a full-service restaurant called the Arcadia Bar and Grill.
A developer’s agreement was necessary because the city has applied for a $250,000 community development grant from the Wisconsin Economic Development Corp. that, if attained, will be loaned to Patel to help redevelop the building. Having a developer’s agreement is a requirement of the grant. The grant would be targeted to help Patel make improvements to the façade of the building and renovate the first floor for the planned restaurants.
A representative of WEDC said the grant is made for situations just like this and the city has a good chance of receiving it.
Conditions of receiving the grant from the city for Patel include operating a hotel in the building for at least 15 years, being open year-round, investing $1 million in the building within two years, maintaining first-floor retail space, employing a minimum of 16 full-time positions and staying current on city taxes.
If those conditions are met, the city will waive interest payments on the loan and also waive the principle on the last five years of the loan. Because the loan would be from grant money, the city is not losing any money by waiving either amount. Accumulated interest and principle become due and payable if the hotel closes within 10 years or the restaurants are discontinued.
The developer would also be eligible for reimbursement of a portion of the tax increment generated by the project if the conditions are met. The developer will be reimbursed for 80 percent of the increment generated from the hotel property or 80 percent of the increment generated in Tax Incremental Finance District No. 5, whichever is less, up to a total aggregate amount not to exceed 50 percent of the total documented cost of improvements or $500,000, whichever is less.
Part of the developer’s agreement states that the developer would not be taking on the project if not for TIF assistance and other incentives to help pay for the renovations. Pieroni said the developer’s agreement is consistent with the city’s desire that TID 5 in the downtown be developed on a cash basis. Money will not be spent on it unless it is generating money.
Alderman Bruce DeWitt said the grant will help the developer but only after he has invested significant money in the project.
Pieroni said Best Hospitality intends to begin façade improvements yet this year but poor weather has not allowed the work to begin.
Finance director
Pieroni announced the city has hired Kelly Hayden, former Fontana village administrator, to become finance director for the city. Hayden was Fontana’s village administrator for 12 years and worked in Walworth before that.
The finance director post is a new position. Pieroni said utilities director Barb Stebnitz recently retired and the position was eliminated. Pieroni has taken on some of the administrative duties of the position. Hayden will oversee all financial operations of the city and the utilities.
Apartment remodel
The city approved a request from the Wisconsin Housing Preservation Corp. to approve issuing tax-exempt multifamily housing revenue bonds by the Public Finance Authority to rehabilitate facilities in the city.
The facilities include the Lake Comus Manor at 207 McDowell St., Turtle Creek Apartments at 1090 Birchwood Lane, and Woodview Park Apartments at 303-353 Tyrell Court. All major building components are to be upgraded along with interior renovations to kitchens and bathrooms. Pieroni said all work is expected to be completed in 2014.
Pieroni said the bonds pose no risk to the city or its borrowing authority. The bonds will be financed by private investors and involve no obligation by the city.
Business expansion
The council approved a conditional use permit to allow Korey’s Auto Kare to expand. Owner Korey Kuehni has purchased the former Southern Lakes Publishing building at 665 E. Geneva St.
Kuehni said he plans to move his business into the building and eventually tear down the building his business is currently in for parking. For now he has an agreement to park cars across the street next to Culligan’s on a parking lot owned by Wheeler Real Estate LLC.
