Friday, November 18, 2011
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To build or to block that's the question for the Chester City Council.
Developers James Best of Chester, John Bergfeld of Sparta and John Pawloski of Godfrey have proposed a project to build a $6.7 million 65 to 80-unit Microtel hotel on the highway above the Chester Mental Health Center and the Menard Correctional Center. The project would replace the shuttered post-World War II motel, the Hi-3, that's now closed.
To cover part of the redevelopment costs they want to use funds from future property tax payments to the city's existing TIF district.
The problem rests with the owner of the one remaining hotel, the Reid's Inn Best Western, who says there's no room for two in town, and that the city shouldn't be financing his competition.
The city went as far as hiring an expert to conduct a study. The expert though was a property appraiser out of the St. Louis market. That's a problem, the developers imply - he's not really an expert in their field.
The Randolph County Herald-Tribune has his complete report online.
As the council debates the issue they should consider two items not in the report.
First, do they really want to protect what appears to a 40-year-old ex-Ramada Inn now affiliated with Best Western over a brand new property?
In Mount Vernon, the former Ramada became a Best Western and is now shuttered. There's a reason for that, modern travelers not driven by the price will avoid those properties like the plague.
The report states that most of the furnishings in the existing Best Western are less than two years old. That may be true, but it still looks like an old Ramada Inn on the front.
That's not to say it isn't well run. Reviews at TripAdvisor.com are generally positive and complimentary.
Second, if the Chester city fathers would look to Marion they would see that the last seven hotels (and the two now under construction) have all benefited either directly or indirectly from tax increment financing.
Up the interstate, Mount Vernon has created a new TIF district alongside it's new interchange. Presumably any future hotels that locate there will benefit to some extent from those efforts.
City leaders create TIF districts when they determine that blighted conditions are hurting their communities. Lines are drawn, then any development that takes place within those lines become eligible for tax increment financing.
A TIF agreement has to be reached between the developers and the city, but unless the proposed development is a public nuisance or will hurt the community in the long run, it's really not the city's business to start making value judgments.
To me, the difference between venture socialism (like Solyndra and GM) and the use of general tax incentives is the amount of government interference and political posturing that takes place.
Incentive programs like TIFs possess a clear-cut set of rules. If the developer meets the objectives, then they qualify for the incentives. The decision to offer the incentives has already been made when the city established the TIF district in the first place.
The local owner of the Best Western argues that it's not the city's role to pick winners and losers. He's right. It's not the city's role to block competition in the marketplace.
Another thing. The study rightly points out that both Chester and Randolph County lost population during the first decade of the 21st Century. The Southern Illinoisan pointed out that the site in question has been a closed motel for 20 years.
The Chester city council was right in taking steps to revitalize their community by creating a TIF district, but if they balk at local investors wanting to redevelop blighted eyesores, I'm not sure where they're going to grow.