Incentive package for Wyndham City Centre will go to new city council, developer frustrated

A nearly $20 million incentive package to redevelop the downtown Wyndham City Centre won't be taken up by the current city council.

A plan to debate and possibly vote on the deal was scrubbed for a second time at Tuesday's city council meeting and will go before the new administration.

While the delay left developer Al Rajabi of Sky Capital Group frustrated, he said he would be willing to have a conversation about the project with Mayor-Elect Misty Buscher.

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Buscher defeated two-term Mayor Jim Langfelder who has championed the unique financing package and promised in his concession speech that the Wyndham deal "would get done."

Rajabi, who was accompanied by several staff members from the hotel, said he was already en route from San Antonio to Springfield when he got word the city council wouldn't take up the question Tuesday.

"I was told we were going to come in front of you before the election," Rajabi told the city council. "Then they said, we promise you, right after the election, come on over. From the developer's point of view, from the staff point of view, it's very frustrating. It cost a lot of money and a lot of time.

"This is all lined up. This is a shovel ready project. That's what we have. We're ready to go. I'm really scared that banks, with the way things are going, credit is getting very tight and are we going to do this or not?"

At one point during the meeting, Langfelder asked Rajabi if he was open to the ordinance coming back under the new city council.

"It doesn't sound like the city wants me here," Rajabi shot back.

Last month, the Community Economic Development Commission endorsed an ordinance that would provide the hotel $18.75 million in incentives and would come partly from a targeted tax-increment financing district, or TIF.

The city would have the flexibility to blend in sharing the hotel/motel tax and sales tax, both generated at the property, to help complete the incentive requirement.

The plan would call for the Wyndham, which opened 50 years ago, to become a Delta by Marriott and keep 250 hotel rooms and 200 market rate apartments.

An overhaul of the stressed property is pegged at just short of $60 million.

Rajabi said while he would "definitely" be happy to meet with Buscher, "I would need to check with my bank (to see) if they're willing to wait that long," he told The State Journal-Register after the meeting.

Buscher probably wouldn't be sworn in as mayor until early May, although an inauguration date hasn't been set.

"Interest rates have gone up (and) inflation has gone out of control. With those things, you have to take a step back and see if things pencil out," Rajabi said. "Banks are doing the same things. They're not doing loans left and right like they used to do. This is not a project out of the ordinary. It happens all the time. Cities are partnering with developers and making sure (projects are) successful."

"I love Springfield. I want to be part of this town," he added. "We need to look at all of our options, then make a decision that's best for my staff, my team and our banks."

Ward 8 Ald. Erin Conley said all parties need to be "open and honest" about the different conversations they've had around the project.

"The dial has continually moved, the story has changed enough (that) I would like our mayor-elect to have her time with her team to review this proposal," she said. "It requires really responsible and thorough review by this council, and I don't think that's being disrespectful to you or your company."

"We're really just asking for a timeout," Ward 9 Ald. Jim Donelan added. "Please don't give up on Springfield."

Langfelder, speaking with the media afterwards, said while he understood Rajabi's frustration, he thinks ultimately the project will go forward.

"We understand the need for Mayor-Elect Buscher wanting to weigh in," he said. "I think (Rajabi) felt everybody was on board ready to go, but the elections happened and that's the way it is. The project will stand on its own."

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Rajabi had wanted to sell the hotel to New York developer David Mitchell last year, but city council turned away three votes on a variance that would have increased the number of apartments.

Some city council members haven't forgotten about Rajabi's mention last summer of possibly eliminating the hotel's rooms and developing 200 apartments for government-assisted housing because, he said, his options were "limited" financially.

The Wyndham became a campaign issue over the forgiveness of a $243,000 charge on a 2021 City Water, Light & Power bill.

During the meeting, Rajabi said "zero dollars" is owed to the city.

"I paid the city $1.5 million to make (it) whole," he said. "We had an agreement and I paid exactly the amount that was agree upon."

Buscher, in a sit-down interview with the SJ-R earlier Tuesday, said it is the city that needs to be made whole.

"If you owed a quarter of a million, and then wanted $20 million more, I would ask for the quarter of a million back," Buscher said. "It's still the same person who received debt forgiveness and then wants additional funding from the city. Ultimately, it's all the taxpayers' money."

Contact Steven Spearie: 217-622-1788, [email protected], twitter.com/@StevenSpearie.

This article originally appeared on State Journal-Register: Incentive package for Wyndham will get kicked to the new city council