Plan might find new use for Douglas Hotel, longtime Urbana eyesore

2 Urbana elementary schools also could be included in plan to convert them into new senior housing.

A plan to redevelop a long-vacant hotel in downtown Urbana could also provide new life to two elementary schools that would otherwise be slated for demolition.

The Urbana City School District, the city of Urbana and the owners of the former Douglas Hotel are working on a proposal that could turn the vacant inn, as well as North and South Elementary Schools in Urbana, into affordable senior housing, Mayor Bill Bean said. Those entities are working with the Champaign Economic Partnership and Flaherty and Collins Properties, a developer based in Indianapolis.

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The deal initially focused on finding a suitable use for the Douglas, which has been vacant for more than a decade, Bean said. But that site didn’t have enough rooms available to make the project viable so the developer also looked at the two elementary schools.

The school district is building a new high school on the same site as the current high school, as well as a preschool-eighth grade school and between Vintage Drive-Thru and Campground Road on the south side of town. With the new primary school under construction, the district’s three elementary schools were likely to be demolished, district Superintendent Charles Thiel said.

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If the new project moves forward, it could redevelop a longtime eyesore downtown, find a new use for two of the school district’s aging buildings and provide more senior housing options for residents, Bean said.

The owners of the Douglas and staff from Flaherty and Collins couldn’t be reached for comment.

Several attempts have been made to redevelop the downtown hotel since it closed more than a decade ago. But renovations would be costly, Bean said, and finding a viable project has been difficult. The hotel was a local landmark and a popular business for years but most recently it’s been an eyesore, he said.

The city would only need to take over the two school buildings since the hotel is currently owned by a private entity.

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“As far as I’m concerned, that hotel is a cancer in downtown Urbana,” Bean said.

Converting the hotel into senior housing would draw more foot traffic downtown, create jobs and benefit local businesses and restaurants, he said. Urbana’s Board of Zoning and Appeals recently approved a zoning change, approving two conditional use permits for the city school buildings that would allow them to be used for senior housing, said Marty Hess, a city council and BZA member.

“It’s going to be a boon for downtown Urbana if we can get this done,” Bean said.

Under the proposal, the school district would transfer the two properties to the city, and the CEP would transfer the properties to the developer, said Marcia Bailey, economic development director for the CEP.

The developer is seeking a grant from the Ohio Fair Housing agency in mid-February, Bailey said. The developer also is applying for historic tax credits later in the year to make the plan more affordable, she said, so all sides are working on a tight timeline.

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Even if the developer doesn’t receive the credits this year, it would still be interested in applying next year, Bailey said. But the organizations are also discussing an agreement to make sure the city isn’t stuck with two school buildings if the deal falls through, she said.

“If we can get that historic building redeveloped, it just changes the whole landscape of downtown Urbana,” Bailey said.

The school district has funding available as part of its construction project to tear down unused buildings, Thiel said. Most of the money set aside for demolition would be returned to the state if the buildings are saved, he said. If this proposal falls through, there aren’t viable reasons for the district to maintain those properties.

The district has heard some interest from parties interested in East Elementary School, which isn’t included in this proposal, Thiel said. But there are no specific deals moving forward for that property at this point.

“There’s a large faction of the community that would like to keep and maintain those buildings for their history,” he said of North and South elementaries. “If it can be reused and repurposed that would be ideal, and the total project would be a win for the community.”

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