Chesterton Tribune

Traffic, incentives and town park access discussed for $5.5 million Burns Harbor hotel plan

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Sartell, Minnesota developer Troy Hoekstra agreed to meet with Burns Harbor department heads and map out what’s needed to bring a 76-room hotel to Burns Harbor after discussing the project with its Advisory Plan Commission last night.

The $5.5 million to $7 million hotel would have up to three additional retail sites likely developed as restaurants. No specific hotel chain has been identifed at this time.

Those are the plans for the 9 acres Hoekstra hopes to contractually exercise control over that now houses Rainbow Trailer Park, which would have to be demolished and its tenants relocated.

According to local attorney Martin Ulferts of Michigan City, who has represented Rainbow owner Jacob Pasternak’s incorporated company, “We’d like to see the property developed.”

Hoekstra confirmed he’s also in contact with a broker possibly to acquire an additional 9 acres east of Rainbow for expansion of the hotel project.

Hoekstra is working in partnership with the Morrissey Hospitality Companies of St. Paul. The group was a managing partner in the search, acquisition and build-out of the 414-room, $135 million Key Lime Cove indoor waterpark resort in Gurnee, Illinois.

After Monday’s meeting Hoekstra said his timetable for the Burns Harbor project is “yesterday.” However, “All these deals go at their own pace. I’ve had some grind on for three years, and sometimes they come together in three months.”

Commission president Jeff Freeze told Hoekstra, “This body will do what we can from a zoning perspective.” Member Gene Weibl welcomed the creation of jobs and broadening the tax base. Both men are also Town Council members.

It was determined the hotel project may need a use variance, rezoning, possible subdivision or designation as a planned unit development. The Town Council, Sanitary Board and Redevelopment Commission all likely would be involved as well.

In Minnesota, Hoekstra said it’s a nine-month process to vacate a trailer park; while Indiana doesn’t appear to have similar limitations, he said he wouldn’t mistreat any park tenants and would provide them adequate notice of development plans. The number of current tenants wasn’t readily available.

A large consideration, said Hoekstra, is the amount of infrastructure including concrete that would have to be removed from the site to build anew. But an advantage is having the town’s Lakeland Park with fishing, boating and lifeguarded swimming immediately adjacent to the west.

He suggested building the hotel on the west end of the Rainbow property and opening the existing fence on the park’s east side to facilitate its use by hotel guests as an “unbelievable amenity.”

Weibl later said, “That makes me nervous. Unknown people staying there temporarily --- you know where I’m going.” Replied Hoekstra, “That would definitely be something to think about.”

He also said conversation could be started about enlarging the hotel pool and creating community partnerships for its use during off-peak hours.

Hoekstra conceded highway access to the hotel will be tough to work out. Located at the Interstate 94 interchange with U.S. 20, guests would have to turn onto North Babcock Road --- the first part in the town of Porter --- then jog onto the Rainbow frontage road or realign it.

Weibl noted hotel guests getting off eastbound U.S. 20 from I-94 would be inclined to cut across four lanes of traffic to turn onto Babcock instead of making the legal move of going to the next stop light and executing a turn.

Hoekstra said a Comfort Inn is located at Babcock and U.S. 20, its weekend occupancy is high so obviously hotel guests can find the site and good things are happening there, yet the Burns Harbor site seems to be even more of a significant opportunity.

Incentives from the town were broadly discussed, like using tax-increment financing (TIF) revenues to help the project along; Hoekstra said investor groups sometime do a self-imposed lodging tax that hopefully is used for improvements at the site.

Associate town attorney Chuck Parkinson said Indiana doesn’t allow municipalities to impose local option taxes, and Burns Harbor doesn’t have any surplus TIF money because its annual collections go to repay a sewer bond. Tonight, the Town Council will consider a tax-abatement extension for ArcelorMittal, a package that includes Mittal’s commitment to make the remaining sewer payments freeing up about $500,000 in TIF funds each year.

Freeze said the town has adequate capacity at its sewage treatment plant for the hotel. Sanitation superintendent Bill Arney said it appears the Rainbow lift station could be eliminated and with a system upgrade the hotel-project effluent pumped directly into the town’s main line.

Hoekstra inquired about local property taxes as they will weigh heavily on project evaluation. Burns Harbor has one of the lowest municipal tax rates in Porter County, and Parkinson said Indiana caps property taxes at a maximum 3 percent.

He suggested Hoekstra talk to the town Redevelopment Commission about potential financing incentives. Said Hoekstra, “You can’t just run around the countryside looking for free money. There’s other ways to make it work.”

Commission members Jan Hines, Jim McGee and Marcus Rogala were absent. Attending the meeting was Town Councilman Greg Miller.






Posted 5/8/2012