Springfield officials recently finalized an agreement with the owner of the Wyndham City Centre hotel in which the hotel will resume paying rent for use of a city-owned parking lot at 700 E. Monroe St.
But on a higher-profile issue – whether the Wyndham hotel will be renovated in the near future – Tower Capital Group, owned by Al Rajabi of San Antonio, Texas, hasn't responded to the city's 2023 offer of potential financial incentives to renovate the aging, 30-story downtown structure at 700 E. Adams St. And it's unclear whether any renovations, or a sale of the property, are being planned. Tower and Rajabi haven't responded to repeated requests for comment from Illinois Times.
"They are not communicating anything, good or bad," Scott Dahl, director of the Springfield Convention and Visitors Bureau, said.
Dahl, who heads a department that is part of city government, said Rajabi and his associates "disconnected" from talks with the city after the group's third zoning proposal failed to receive majority City Council support in fall 2022.
The new rental agreement, unanimously approved by the City Council on Jan. 7, was negotiated with the help of a local lawyer, Gordon Gates, representing Tower Capital. Gates and Tower Capital officials didn't respond to requests for comment.
Tower Capital stopped paying rent to the city for operating and maintaining the parking deck, which is used by Wyndham customers and the general public, sometime in 2020 during the COVID-19 pandemic, according to the city's chief legal counsel, Gregory Moredock.
The arrangement, which began under former mayor Jim Langfelder, wasn't put in writing but apparently was part of city officials' attempts at that time to "keep downtown afloat," Moredock said.
Moredock said the outgoing Langfelder administration indicated in a transition document that it expected $6,750-per-month rental payments to resume in May 2023, when Misty Buscher, who beat Langfelder in the mayoral election the month before, took office. The payments never started back up, leading to a dispute that was resolved in the agreement approved by the council on Jan. 7.
According to Moredock, Tower Capital's initial position was that it shouldn't have to start paying rent again because Tower, which maintains and manages the deck, wasn't charging for parking there. The city, however, had evidence that Tower was charging for parking at certain times, Moredock said.
In the settlement, Tower agreed to repay the city $108,000 in back rent for a 16-month period – from May 1, 2023, through September 2024 – and then to resume monthly rental payments, Moredock said.
The parking deck provides more than 500 parking slots, with about 110 slots on each of the five levels. The deck was built by the city in the early 1970s and opened in 1971 with the first three levels. The hotel owns the deck's fourth and fifth levels, which were constructed by the city in the late 1980s, Moredock said.
Tower Capital bought the 369-room hotel from the previous owners for $7.4 million in 2019 as part of a bankruptcy proceeding. The hotel began as Forum 30 in 1973 and began to be known as the Springfield Hilton in 1980. The hotel's brand switched to Wyndham in 2015.
Rajabi previously said a reduction in hotel business associated with the COVID-19 pandemic in 2020 and 2021 prevented him from finding a lender willing to finance his original plan – renovating the hotel into a Delta by Marriott hotel.
Rajabi then tried to work with GoodHomes, a development company based in New York City, to renovate the hotel into a market-rate apartment complex with as many as 320 apartments and some hotel rooms. But current zoning limits dwelling units to 200, so that plan required a zoning variance, and it failed to win council support in 2022.
The latest proposal came from Tower Capital in spring 2023, shortly before Langfelder was defeated in his bid for a third consecutive term. Without GoodHomes' involvement, Tower hoped to develop a Marriott Delta hotel and invest $58 million in a renovation involving up to 200 apartments, hotel rooms and convention space in the Wyndham building.
But based on discussions with Langfelder, Tower said it hoped to take advantage of about $18.75 million in tax-related incentives from the city. Buscher, however, said the assistance package of property, hotel-motel and sales taxes potentially available to Tower would add up to $9 million or $10 million at most.
"The incentives that were offered before just simply are not there financially," Buscher told Illinois Times after a City Council meeting in June 2023.
Buscher said through a spokesperson on Jan. 14, "After the city conveyed the incentives requested were not available, no further discussions have taken place."
Rajabi put the Wyndham up for auction in an online event that concluded in April 2024. The auction was structured so he could turn down the highest bidder if the "reserve price," known only to Rajabi and his associates, was not reached. The auction failed to result in a sale.