Pitch Made for Assistance for Convention Center Renovation, Hotel Construction; Opposition Heard, Too

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Published on September 18 2013 12:14 am
Last Updated on September 18 2013 12:22 pm
Written by Greg Sapp

Representatives of Keller Enterprises, Incorporated made a request to the Effingham City Council Tuesday for funding help on a renovation of the Thelma Keller Convention Center and construction of a hotel that would provide the establishment additional connecting rooms.

The head of another local hospitality chain voiced opposition to the proposal.

Chuck Keller, Jr., Chris Keller and Patty Greene presented the proposal seeking funding from the City and a rebate of a portion of the hotel/motel tax earned by the establishment to help with the renovation and construction projects.

Greene, who is the director of the Convention Center, said the Center brings business to their motels but also to the other accommodations in town.  She said it also brings tax revenue to the city through shopping at restaurants and retail establishments.

Greene said 26,689 sleeping rooms were filled in Effingham during 2012 by activity at the Convention Center.  At an average of $90/night, that means $163,000 in sales tax revenue.  She also said they're losing groups who say they've outgrown the Center.  She said they also ask for more rooms attached to the Convention Center.

The promoters said the renovation and hotel construction undertaking is projected to cost $18 million.  Chris Keller did not say what hotel is coming to town, but said it would be a "100+ room luxury roadside establishment".

Greene said she already battles other communities that have airport access and more diverse shopping opportunities.  She also noted that other Illinois communities provide support for their convention centers.

For his part, BB and K Development Corporation head Richard Beatty wondered why the City would consider underwriting such a project.  Beatty said Effingham fills all of its hotel rooms about 12 times a year and said on any given night, half the rooms in town are full.

Beatty said it's basically a case of Effingham spending tax dollars for a hotel, then giving back some of the revenue earned at the establishment.  He noted that the City rebated BB and K $1 million when an old motel was torn down to make way for the new Hampton Inn and Suites, but said the demolition of the old motel was more expensive than first expected.

Beatty said if the City gives the Kellers the money they are requesting, he'll ask for the same amount and rebate it back to some of his leading customers.

Also appearing in opposition was Theodore Mandigo of Elmhurst, who identified himself as a hospitality consultant.  Mandigo suggested limited airport service is a problem, not a lack of rooms, and that adding 100 rooms is "not a dealmaker".  He also suggested that the project could hurt the other hotel and motel operators in Effingham.

The item was only on the agenda for discussion.  The Council will next discuss whether they want to pursue an agreement and, if so, the terms will be debated.