Controversial project going to Naperville City Council

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Artist's rendering of the Pita Inn restaurant at Freedom Plaza Development in Naperville Abriter Court just north of Diehl Road and south of Interstate 88.. | Artist rendering Sep. 27

City Council meeting

The Naperville City Council will meet at 7 p.m. Tuesday at the Naperville Municipal Center, 400 S. Eagle St. For more on the meeting, visit http://www.naperville.il.us/ccinfo.aspx

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Updated: December 1, 2011 5:28AM

With DuPage County’s unemployment rate hovering around 8.5 percent and every politician in America talking about jobs, a proposed Naperville development could ease the pain a little.

But approving it would mean City Council members might have to depart somewhat from the city’s long-established vision for the Interstate 88 corridor through Naperville, and possibly provide an incentive package to get the deal done.

That dynamic will drive the discussion at Tuesday evening’s City Council meeting at the Naperville Municipal Center.

Big plans

Superhost Enterprises is proposing a seven-story, 150,000-square-foot Embassy Suites Hotel at a site along Abriter Court north of Diehl Road along I-88. The hotel would include a conference center with 20,000 square feet — big enough to accommodate 1,000 guests, making it by far the biggest such facility in Naperville.

The overall project would also include a Pita Inn restaurant and — the most controversial element — a three-story Alzheimer’s care facility. The site also includes a parcel that could be developed in the future by the owners.

Superhost officials believe the deal is too good for Naperville to turn its back on.

“We want to stress the value of what they would be giving up,” Superhost Vice President Samir Lakhany said, referring to his group’s plan to take its case to the City Council Tuesday.

According to a study initiated by Superhost by the Arizona-based consultant Applied Economics, the upside of the project would be significant:

• Direct or indirect support of 360 jobs producing $12.2 million in personal income.

• 650 construction jobs generating $38.1 million in income and creating an $87.6 million impact in DuPage County.

• Guest spending at the hotel of $2.6 million annually.

• Supplier purchasing and employee purchases in the area of $27.1 million.

• A five-year impact of $153.9 million on Naperville and $180.6 million on DuPage County.

Point of contention

The sticking point for some is not Superhost’s concept, but rather with its development partner. In order to secure bank financing for the project, Superhost teamed up with CRL Senior Living Communities, which would run the Alzheimer’s/Memory Care Assisted Living facility on the site.

For that to happen, the city would have to change the property’s zoning. For most of the city’s staff, that is a non-starter.

“The city has a well defined vision for this area that has stood the test of time,” Community Planner Suzanne Thorsen said at an August Plan Commission meeting about the project that lasted well past midnight. “A zoning amendment for a nursing home is inconsistent with the area.”

Staff said the zoning for the site should remain consistent with the vision that the land along I-88 should be a “research and development corridor.”

“The I-88 corridor is a strategic area for economic development in the city of Naperville, providing an important base for highly skilled office and research/development employment,” according to a memo from staff to council members. “The proposed Alzheimer’s treatment facility is not consistent with the vision or intent for the I-88 corridor.”

The Planning and Zoning Commission deadlocked on its vote, so the plan will go to City Council without a recommendation for approval.

City Manager Doug Krieger agrees with leaving the zoning alone.

“It’s really a question regarding land use,” he said. “Do we feel the property is challenged enough (in development potential) to deviate from our plans?”

Krieger said that “nine times out of 10” city staff will recommend against a zoning change that conflicts with the city’s vision for a particular area. Staff will often counsel patience for those anxious for the land to be developed.

“It will be developed at some point in time,” he said.

Echoing Krieger’s sentiments is Christine Jeffries, president of the Naperville Development Partnership.

“We hold to the vision that was established for that corridor and we feel the zoning is appropriate,” she said. “It’s not one (an issue) we have waffled on in the past.”

Jeffries called the proposed Alzheimer’s facility an “incompatible use” for the area, but found no problem with the proposed hotel and restaurant.

As for the financial hardships faced by the developer, Jeffries pointed out that they knew the price of the land when they bought it four years ago.

Raising concerns

In a letter to the City Council, Dan Gustafson, general manager of the new Marriott being developed on the site of the old Holiday Inn on Naper Boulevard, and James R. Adams, general manager of the Hotel Arista just off Route 59 north of I-88, said they have concerns about the project.

Both say that any claims made that the Embassy Suites conference center would help their hotels due to “overflow” customers are incorrect.

“With ample vacant rooms currently in the market, and additional rooms coming online, adding another hospitality property and approving this development absolutely would not benefit existing properties. In fact, at least some of the job and business growth predicted by the sponsor of the development would be offset by losses elsewhere,” they said in the letter.

They say that “the use of this land as prime office space, its highest and best use (as evidenced by its exising zoning) would bring more jobs to Naperville in the long term ...”

Showing support

The project does have significant support from some community members, among them members of the Naperville Area Chamber of Commerce. The Chamber itself has not taken a stand on the project.

Members of organized labor, including Plumbers and Pipefitters Local 501 and other area trade unions, held a demonstration Friday at the 9.2-acre site to show their support.

Moreover, the DuPage Building and Construction Trades Council and the Construction Industry Service Corporation are behind the project.

Lakhany takes issue with opponents classifying the Alzheimer’s facility as residential.

“It’s no way a residential use,” he said, pointing out that the average stay would be between 18 and 24 months.

And though some in opposition have questioned the development’s financial viability, Lakhany maintained that with the inclusion of CRL, “this property is ready to go ... it’s ready to be financed.”

CRL representative Mark Ellis took strong exception to those who portrayed the proposed facility as a nursing home.

“It does not have any nursing home included,” Ellis said. “We specialize in Alzheimer’s and memory care.”

He pointed out that nurses and nurse assistants, but not actual doctors, would staff the facility.

As for the location, Ellis stressed accessibility.

“It (the location) makes it real easy to get in and out,” he said, pointing out that CRL’s approach was family-centered as well as patient-oriented.

To the council

The ultimate decision on the project rests with the City Council. Although some members are skeptical of the zoning change, all say they are keeping an open mind about the issue.

Councilman Bob Fieseler is leaning towards denying the zoning change, and cites three specific reasons.

The first has to do with whether the project is appropriate for the area, although he did say a CRL Alzheimer’s facility at some other location would be “wonderful to have.”

Second, with the developers insisting that the deal cannot go forward without the CRL component, Fieseler worries about the developer’s financial viability.

“It does not give me a lot of comfort about the development’s staying power,” he said.

Then there are the tax incentives, a form of tax increment rebates suggested in the developer’s proposal. While numbers anywhere from $5 million to $15 million have been floated, Fieseler made it clear that the higher the total, the less comfortable he is with the deal.

Councilman Kenn Miller also expressed skepticism about granting a zoning change. Miller said he is uneasy with the idea of a possible $15 million incentive.

“That was the original offer,” he said. “That was too high.”

But Miller declined to commit to voting against the project, saying he preferred to hear the final presentation at the Tuesday meeting.

“I’ve learned that things tend to change,” he said.

Councilman Steve Chirico said he is undecided about the project and said all things being equal, he usually comes down on the side of job development in Naperville.

“But all things are not equal,” he said, referring to the significant step of changing a long-standing zoning policy.

But Chirico noted that the site has not been developed and said that an exception might have to be made at some point.

Lakhany said that the matter of tax incentives from the city was something on which his company could be flexible.

“We are more than willing to work with them,” he said, but maintained that the deal had to first be approved by the City Council.

“There’s no point in discussing it without approval,” he said.