Owners of The Lodge Hotel would receive up to $3.1 million in property tax and hotel sales tax rebates under a development agreement being considered by the Bettendorf City Council.
The proposed agreement with Spruce Hills Investment Partners, LLC would provide $1.75 million in Tax Increment Financing (TIF) rebates over a 10-year period and another $1 million in hotel sales tax rebates over a 5-year period. If the developers complete a 6,000 square foot retail/office center on the hotel property prior to Dec. 31, 2024, they also would get an additional two years of the TIF rebates, or $350,000.
The Lodge, formerly Jumer's Castle Lodge, has been a Bettendorf fixture at the I-74 and Spruce Hills Drive location since it opened in 1973. Peoria businessman James Jumer built three German-themed lodges, two in Illinois and the one in Bettendorf. All had Bavarian decor, authentic antique furnishings and German food specialties on the hotel restaurant menus.
The Bettendorf hotel was sold in 2002 for $2.2 million to Quad City Lodging Partners LLC, which lists its principal office as 800 White St., Suite 200, Dubuque. That's the same location listed for Platinum Hospitality Group LLC, which operates several hotels in Iowa, including the Grand Harbor Resort in Dubuque. When Spruce Hills Investment Partners was incorporated in October 2012, its principal office was listed as 800 White St., Suite 200 in Dubuque.
The hotel property was assessed at $5 million in 2013.
The investment group is seeking the city assistance to convert the property into a Hilton DoubleTree Hotel, and they have told city officials they will spend $17 million to refurbish the 18-story property. The renovation would include a new exterior, refurbishing of the hotel interior and construction of a new entrance and parking lot.
Steve VanDyke, the city's economic development director, plans to meet with Bettendorf School District and Scott County officials in the coming month to outline the TIF proposal and find out if the two taxing authorities have any objections to the rebates.
About half the TIF dollars rebated under the agreement would be those levied by and due the school district. That's why the city, although not legally required to do so, has made a practice to consult with other taxing bodies before deciding to approve significant TIF developments.
TIF agreements only need approval of the city, and were originally enacted by the state as a way for communities to redevelop "blighted" areas.
Under the proposed hotel TIF (as with other TIF developments in the past), taxes currently levied on the property would continue to be paid to the various taxing authorities like the school district and county. Only the "incremental" taxes – those taxes resulting from the increased value of the property (assessments) after completion of the project – are rebated to the developer.
The Spruce Hills Investment group needs to complete the exterior and interior renovations before the end of the year or face a $175,000 penalty. The proposed agreement also requires the developers to "reimburse the city $175,000 each year the developer fails to timely pay real estate taxes over the 10-year period" of the agreement.
The hotel owners currently owe $285,00 in back taxes and the past due tax bill will have to be paid before the developers get any TIF rebates, according to city officials.
VanDyke also said the city is in the process of identifying the individual investors who are involved in Spruce Hills Investment Partners limited liability corporation.
