Tabeling Seeks $1.5M in Incentives for Mahomet Hotel Development, April agreement remains in place

The Village of Mahomet Board of Trustees will look at an additional redevelopment agreement for a 2.17-acre site near the Interstate 74 exit on Tuesday. This proposal, spearheaded by Hotel PV74, LLC, owned by Shawn Tabeling, includes substantial financial incentives for the development of a that could pave the way for a 71-room hotel near Farm Credit. The hotel is expected to be a Country Inn & Suites by Radisson or another approved mid-scale national franchise.

The hotel project, expected to cost $10-$12 million, includes features such as an indoor pool and patio and 71 rooms. The hotel is expected to bring 15 permanent jobs to Mahomet. To ensure financial viability for the developer, the updated agreement from April 2024 offers a package of tax rebates funded through both Tax Increment Financing (TIF) and the Business District.

Incentives in the Proposal

The agreement proposes rebates covering several tax streams:

• TIF Rebates: For the first five years, the developer would receive 75% of the share of property taxes generated from the TIF District. The rebate reduces to 50% for two additional years. 
• Hotel Motel Tax Rebates: The developer would be refunded 100% of the village’s hotel hotel tax revenues for the first five years, decreasing to 75% for the following two years.
• Business District Sales and Hotel Taxes: The village would rebate 100% of the 1% Business District taxes collected from the hotel for up to 10 years.

Combined, these incentives are capped at $1.5 million, with the agreement expiring in 2035 when the TIF District sunsets.

Other Incentives for the Property

The broader 10-acre site that includes the proposed hotel was initially addressed in an April 2024 redevelopment agreement between the Village of Mahomet and Tabeling Development Company, LLC. That agreement remains in place and covers the remaining 8 acres of the property, which is divided into six commercial lots.

Under the April agreement, the Village committed up to $750,000 in incentives, primarily funded through Tax Increment Financing (TIF) and Business District revenues, to support the development the property. The incentives include:

• TIF Rebates: The developer would receive 50% of the share of property taxes generated from the TIF District for a period of five years.
• Business District Sales Tax Rebates: The village would rebate 100% of the 1% Business District tax collected from retail and service transactions within the development for up to five years.
• Cumulative Reimbursement Cap: The total incentives for the six-lot development are capped at $750,000, which includes eligible costs reimbursed through both TIF and Business District revenue rebates.

If the hotel project on the designated 2-acre parcel fails to move forward, the April agreement stipulates that its terms will extend to the “hotel” property, effectively folding it into the broader development plan for commercial use. This ensures that all parts of the 10-acre site remain eligible for redevelopment incentives, preserving the Village’s broader vision for revitalizing the area.

Funding Source Concerns

While the rebates are funded by TIF and Business District revenues, their use redirects potential funds away from other essential needs, including the Mahomet-Seymour School District. With the TIF district’s 12-year extension in 2024, the 24-year diversion of property tax dollars from local taxing bodies was prolonged. During the rebate period, the school district is expected to receive 50-percent of the property tax increment, totalling approximately $50,000-$60,000 annually. That rate is projected to rise when the TIF district expires in 2036 to $125,000 annually. 

Beginning January 2024, Mahomet residents and visitors will become subject to a 1% sales tax in the Mahomet Business District. These taxes are intended to fund infrastructure improvements and redevelopment efforts in the designated “blighted” areas of Mahomet. Blighted areas are characterized by deteriorating infrastructure, economic underutilization, and inadequate planning, which discourage private investment. Examples of blighted areas include dilapidated buildings, poorly planned subdivisions, and insufficient public services.

Under the redevelopment agreement for the hotel, Hotel PV74, LLC will receive rebates on the Business District sales and hotel taxes collected from its operations for up to 10 years. This means the revenue generated by the taxes from the hotel will be returned to the developer during the rebate period. While the agreement aims to incentivize the hotel’s development and spur broader economic growth, it temporarily shifts the use of Business District revenues away from their original purpose of supporting broader infrastructure improvements in the district. The Business District will be in place for 23 years.

Community and Economic Impact

Proponents argue the agreement is necessary to spur commercial growth, citing the difficulty of securing financing for hotels. Village officials anticipate the hotel will strengthen Mahomet’s commercial sector, attract private investment, and generate increased traffic to nearby businesses. Once the rebates end, the village expects annual revenues of $150,000-$175,000 from the project, including property and hotel taxes.