Initial plans to build two 12-story buildings where Parking Lot J is currently located will be altered due to higher than expected construction costs.

JSM Development proposed to replace Parking Lot J with the buildings, which would be attached by a bridge and connected to a six-story parking garage. The plans called for 297 residential units, 108 hotel rooms, which Marriott Hotels would operate, and 22,000 square feet of retail space, according to the study session report.

However, construction estimates were $19 million over the target, causing JSM to revise the project. The Champaign City Council directed city staff and JSM to move forward with an altered proposal that will contain 90 residential units, 95 hotel rooms and approximately 12,000 square feet of retail space.

“(The proposal) is still larger than what we originally presented back last August but now, finally, the numbers we’ve gotten have reached a point where we can make some steps financially,” said JSM architect Scott Kunkel.

JSM will reduce the heights of the buildings to six stories, reduce the size of the parking garage and add two levels of residential units over the parking garage. The buildings were supposed to contain a mix of residential and hotel units, but the new plan separates the hotel from the apartment facility.

Also, the new plans will not include developing over the building where Flat Top Grill and Penn Station are located or the bridge connecting the two buildings.  

“Staff does feel that the proposal really meets the spirit of the original proposal, and it does offer several benefits,” said Lead Development Manager Lorrie Pearson at the study session. “By not developing over The Flat Top and Penn Station, what that means is that in the future, that can be a fully redeveloped site instead of a partially redeveloped site.”

According to the report, JSM anticipated construction costing $56 million, but factors such as poor soil conditions, increased costs of construction materials, Marriott having building requirements that are more expensive than the building code and newer requirements to meet the energy code caused the estimate to total $75 million.

The city expects the hotel/motel tax to have a positive impact on the community, although the new proposal calls for the city to cover shortfall of $100,000 instead of $60,000 from the parking garage’s profits in the first few years.

JSM expects to begin profiting on the parking garage 14 years after its completion and will repay the city with interest.

“The only real (concern) I have is the payment of the (parking) lot. That is in my mind, a little bit of a drawback. It’s kind of being a loan agency on our own land,” Council Member Vic McIntosh said at the meeting. “I’m not saying it’s a deal-breaker, but in some ways going ahead with negotiations that is a concern.”

Construction was supposed to begin in fall 2013, with the project being completed in August 2015. With direction to move forward with the adjusted plan, JSM expects to complete the building by the original expected date.

Angelica can be reached at [email protected].