North Peorian's hotel deal goes south in EP

Jeanette Kendall

The East Peoria City Council will vote on a first reading for a new proposal it received Thursday for an extension to the Embassy Suites Hotel.

“He has come forth with an excellent proposal,” said East Peoria mayor Dave Mingus.

The council approved a first reading for the Petersen Co.’s at its July 8 meeting for an upscale Holiday Inn. Mingus said because it was only a first reading, and the second reading was not yet approved, the agreement was not sealed.

“The first reading is exactly that. The intent is like an engagement to see if the marriage is going to work out between two parties. During that courtship, some things happen sometimes,” Mingus said.

Mingus said a condition of the proposal was it could be rejected at any time.

Mingus said that while Petersen Companies presented a “fine project” and that the “city should be appreciative,” the Embassy Suites proposal would create nearly twice as much in fair market value as the Petersen project.

“I think it’s totally right if it’s in the best interest of the community,” Mingus said.

John Q. Hammons, owner of Embassy Suites Hotels, did not submit a request for proposal for the extension he plans to build next to the Bob Michel Bridge and Granite City Restaurant. It was not until after Petersen Companies submitted their request for proposal and the first reading of their project was approved by the council that Hammons contacted city officials.

Mingus said Hammons expressed a desire to build something near his Embassy Suites Hotel, but there was never an agreement previously for the city-owned property.

In the recent agreement, it states Hammons will pay the city $500,000 for what is referred to as “Lot 2” along the riverfront and construct a “high-quality hotel ... having a fair market value of no less than $20 million.”

The second tower proposal, Mingus said, would consist of 110 suites in a separate building from Embassy Suites. Mingus said the side-by-side suites with an adjoining door will be “of a quality even better than the current Embassy.”

Deciding factors on considering the Embassy Suites addition over the Holiday Inn were that more revenue, including tax dollars, would be generated, less stress on parking, since the new addition could share parking with the current Embassy Suites, utilization of resources and Hammon’s reputation.

Mingus said the whole Embassy Suites addition could be an investment as high as $30 million.

"(Hammons) invested $35 million in the current Embassy Suites,” Mingus said. “He’s kept his word in the past as far as quality and performance.”

With the proposed 100 rooms, Embassy Suites would have 336 rooms total, all under the same management, Mingus said.

“The second tower proposed by Mr. Hammons will generate significantly more revenue for the city than almost any project one could envision for the site,” Mingus said.

Mingus said the Embassy Suites Conference Center also comes into play.

“One of the things we’re looking at real strong is the support of the conference center. Of course, that benefits (Hammons), too,” Mingus said.

Currently, the city owns the conference center, which is managed by Embassy Suites. In the future, Hammons will own the center.

“If the council votes for (the Embassy Suites) (Tuesday), it would be an existing relationship,” Mingus said.

“Whatever goes there, the city has vested interest in the conference center. We have to make sure there’s some agreement so the conference center remains viable,” he said.

Mingus said the council was prepared to approve the Holiday Inn proposal, but it was not refined.

He added that the city’s legal council is in contact with the Petersen group.

“I’d entertain exploring other alternatives (for the Holiday Inn),” Mingus said.

Mark Petersen, president of Petersen Co.’s, said he has no comment at this time.