SKOKIE, IL — Village trustees unanimously approved a development agreement for a new hotel and conference center in downtown Skokie.
The 142-room Homewood Suites by Hilton is planned for the northwest corner of Oakton Street and Niles Avenue. The deal calls for the developer to present proof that a hotel at least as prestigious as a Homewood Suites plans to operate at the site for at least 15 years.
The hotel is set to include 30,000 square feet of retail space on its ground floor and rooftop and about 10,000 square feet of banquet and event space. As part of the deal, village officials will be permitted rent-free use of the rooftop bar four times a year.
Corporation Counsel Michael Lorge said the project will be a positive addition to the under-construction 8000 North development about 1,000 feet to the west on Oakton Avenue.
"The addition of a hotel to the downtown area is an important and a commanding addition to the economic development already going on in downtown Skokie, and it provides great resources for the surrounding corridor," Lorge said ahead of the project's approval at the Dec. 7 village board meeting. "It is also an important addition to the Illinois Science and Technology Park, which needs hotel accommodations for its tenants."
The $43 million project is eligible to receive up to $13.5 million in tax increment financing from increases to property tax revenue in Oakton-Niles TIF District, which was formed in 2019 in a 6.25-acre area that has seen steep declines in commercial property values over the past decade.
The site of the hotel has been vacant since June 2014 when the campus of for-profit Sanford-Brown Colleges shuttered for good. The previous year, Sanford-Brown's parent company, Schaumburg-based Career Education Corporation, agreed to a $10.25 million settlement agreement that found it had misrepresented job placement rates.
Evanston developer Mark Meyer is the founder and CEO of E&M Strategic Development and the manager of E&M Skokie LLC, the entity formed in 2018 to develop the site. He said his firm was very excited about working with Skokie and could not have asked for a better experience while securing approval for the project.
"I know that what we're talking about today pales in comparison to COVID and stormwater management and all the things that really can cause stress on a community," Meyer said. "It's just humbling to be part of bringing some positive energy and something positive to the community — that's been more than one man could ask for."
The deal also includes the property to the east of the former Sanford-Brown building, including Annie's Pancake House, the family-owned restaurant that has operated at 4900 Oakton St. for more than two decades.
E&M committed to purchase all the property between 4900 and 4930 Oakton from American Landmark Properties, the Skokie-based firm founded by Al Gluck, which also owns the technology park. The price-per-square foot must be the same for both the east and west parcel.
But the developer will only keep the west parcel, site of the planned hotel. Meyer's firm agreed to sell back the east parcel to the village at the same time as the sale from Gluck's firm closes — and at the same price the developer paid for it minus any transaction costs.
Village officials would then have full control over the east parcel and the Annie's Pancake site.
The agreement calls for the developer to make an effort to bring a restaurant to its retail space and negotiate in good faith with the owners of Annie's to lease all or part of its space to the restaurant.
Village Manager John Lockerby said Annie's will not be negatively impacted by the hotel development and will be able to remain in its current location for the time being.
"They're very much interested in having a larger restaurant," Lockerby told trustees. "So they will remain where they are until they decide they want to move to the hotel or another location to have a larger facility, and then that site would be available for redevelopment."
Under the agreement, the eastern side of the hotel will include a pedestrian arcade providing elevator access to the rooftop space. The village promised not to block the area, which must remain open for village use.
The village is also guaranteed two stories of free public parking. The hotel must secure 186 parking spaces, and village staff said the spots are likely to come in a new garage on a portion of the technology park property to the north of the hotel.
"We're still negotiating through terms, but the concept is that a multi-floor garage will be built on the corner on Science and Technology Park property. It'll contain two floors of public parking and then the necessary floors [of parking] for the hotel," Lorge said. "The hotel will enter into a lease with the owner of the garage [the village or the developer], and in either regard the public parking will remain in perpetuity so long as our involvement is with the garage."
The village attorney said the developer had adequately established that the project would not be possible without the village kicking in to help cover its cost with TIF funding.
"E&M Skokie LLC has provided supportive documentation to Skokie that, given the costs associated with the site preparation and the construction of the hotel itself, the project would not be feasible without financial assistance from Skokie," he said. "Skokie recognizes that the development and operation of the hotel will prevent potential blight in a prime commercial and residential area of Skokie."