Developers who signed a hotel deal with the City of Urbana, Illinois in June of 2019 are now requesting an extension for the fourth time.  The Hotel Royer (previously known as the Lincoln Hotel) is to be part of Hilton’s “Tapestry Collection”, and it was originally supposed to be completed by the end of 2022.  However, the development team has repeatedly asked the City Council to agree to delayed opening dates, while leaving the City’s $5.5 million project incentive intact.

Seven members of the development group “Icon Hospitality, LLC” attended a City Council meeting on July 24^th, 2023 urging the Council members to grant their third extension.  At that time, CEO Pervaiz Usman said “realistically, this project is almost done”.  The Council granted the extension for a February 29^th, 2024 completion date, but now the group wants until the end of 2024 to finish.  Apparently, “almost done” meant seventeen more months.

According to the new extension request, submitted to the City on January 10^th, 2024, the investment group now claims “we are near the finish line and the final hurdle”.

The original agreement stipulated a project commencement date by July 1^st, 2020, but that was delayed by a year.  With the new request to extend completion until December 31^st, 2024, that makes for a three and a half year construction period, or four and a half counting the initial 1 year delay. 

For comparison, the Empire State Building was constructed in 410 days.

According to the Hilton website, the Royer Hotel is “accepting reservations for June 30, 2024 and beyond”, so it isn’t clear why the developers want until end of 2024 to receive their occupancy permit.

Another curiosity has been the jumble of different business names that have been churned into this process.  The initial agreement with the City was made by Marksons Affiliates, LLC out of Maryland.  However, that contract was then shifted onto Icon Hospitality, LLC (registered in Illinois) sometime in 2020.  The most recent request to extend the completion date of the hotel was sent by Marquis Ventures.

Records kept by the Illinois Secretary of State show that Icon Hospitality LLC was first organized on December 23^rd, 2019, listing the principle place of business as a small clothing store in Chicago.  In an annual report filed on November 19^th, 2023, the principle place of business was changed to that of an Indian restaurant a couple of blocks away.  Champaign County tax records show two different addresses for Icon, neither of which match the current registered place of business.  Icon Hospitality lists only one managing officer: Haaris Pervaiz. 

Records also show that a number of other LLCs were initiated and dissolved in the past few years under the names Haaris Pervaiz and Pervaiz Usman (who is supposedly the CEO of Icon) at a number of physical addresses that don’t seem to relate in any way to the nature of the business.

It still isn’t clear if Hilton Hotels & Resorts has played any role in this development process, or if they simply sell their name to franchisees and remain hands-off.

Whatever business name they’ve utilized, the hotel investors have repeatedly pushed the same stories of supply chain issues as a result of the COVID pandemic.  That excuse may have held some truth three years ago, but it doesn’t make sense that those same excuses are still being routinely doled out today.

From an investment perspective, it is understandable that the hotel developers have not supplied the resources needed to complete the hotel sooner.  The COVID pandemic substantially slowed the travel industry, and keen investors would know that their money would be better invested elsewhere until things recovered.  Since the annual holding costs on the hotel property appear to be in the area of just 2% of the intended $15-20 million total investment, the decision to direct resources toward other investments comes at a relatively low cost.

The question is, should Urbana taxpayers continue to extend the $5.5 million completion incentive to this group of wealthy businessmen, even after they have blown the project deadline so many times?  What does Urbana have to gain by extending this charity?

Records on the most recent (fourth) Hotel Royer extension request, received via a Freedom of Information Act request, are provided below.