New Lenox works toward deal on hotel near Silver Cross

New Lenox is working on a deal to bring a hotel near Silver Cross Hospital, Mayor Tim Baldermann said.

He and village staff met Tuesday with representatives from Prominence Hospitality Group, who have a parcel under contract at the Cedar Crossings development site at the corner of Route 6 and Interstate 355, east of the hospital.

They will meet with the group again next week to work on a deal to bring “a tier one” hotel to the village, which may include an incentive such as a tax rebate, Baldermann said.

“Something along these lines is always a potential when you’re talking about a multimillion-dollar development like this,” Baldermann said. “This is absolutely a great first step.”

While unable to disclose the name of the hotel, Rehan Zaid, a Prominence official, did say it is a “globally recognized brand” and would cost more to build than an economy hotel.

He expects an investment of $10 million to $14 million depending on the size of the hotel, bringing 50 to 100 construction jobs and about 20 to 40 permanent jobs.

The group still needs to determine whether it is financially feasible to build in the area, and a deal with the village would be “favorable,” Zaid said.

The project could be confirmed in a month, and a hotel with 75 to 100 rooms could be open by late 2020 or early 2021, he said. Depending on the success of that first hotel, a second one could come after, he added.

Additionally, with Illinois having recently expanded its Video Gaming Act, New Lenox will be amending some of its own regulations on the gambling business.

Trustees on Monday night discussed a number of changes to the rules that exceed state regulations.

Statewide changes include raising the cap on gambling machines in an establishment from five to six and increasing the cap on wagers from $2 to $4.

Currently, New Lenox requires that establishments installing video gaming terminals show that 60% of income comes from other business, such as food or alcohol. The village is now set to change that to 50%.

With an increase in terminals and wagers leading to possible increased revenue from that side of the business, the establishments might find themselves in noncompliance of the 60% requirement, Baldermann said.

“As long as they will make at least 50% from their main food or alcohol [business], we didn’t want to make it difficult for them with that sixth machine,” he said.

New Lenox will also look to increase annual fees for each terminal from $25 to $150.

Veterans organizations and the park district’s golf club would be exempt from this fee increase, Baldermann said.

The village will also add a stipulation that the nongambling portion of their business cannot come from tobacco or tobacco-related sales.

“What we had heard was that in some places owners were selling cartons of cigarettes really cheap just to get people in there to play games,” Baldermann said.

New Lenox currently has 17 establishments that offer video gambling, and the village makes an average of about $220,000 a year from its portion of taxes, he said.

The village checks annually to make sure the establishments are compliant with all village regulations, and they have been, he said.

The state requires that all business that want a video gaming license to have a "pour" liquor license as well. Earlier this year, three local business owners came to the board to request they find a way to allow them a pour license so they could install video gambling terminals to offset decreasing revenue.

The board was reluctant at the time to allow this, with concerns about people drinking in liquor stores and a 7-Eleven. That issue has not come up again, Baldermann said.

The amended ordinance is expected to be approved as part of the board’s consent agenda at its Aug. 26 meeting.