CHAMPAIGN — In 2023, the Champaign-Urbana Mass Transit District announced that it was in talks with a new development partner on an expansion project for its Illinois Terminal in downtown Chamapign after previous collaborators left the endeavor.
Three years later, that second developer, Royse Witte Downtown, is also dropping out of the project.
“There really is just one singular reason,” said MTD Managing Director Karl Gnadt. “And that was that it was just too challenging to close the financial gap for Royse Witte.”
He added that the firm made a “herculean effort” to make the financing work, but the current development environment and the specifics of the project made it more expensive than developing a property that’s more of a blank slate.
Collin Carlier with Royse Witte Downtown confirmed that financing was the main issue.
As a result of the firm’s departure, the project will no longer include apartments. Instead, Gnadt said the scope of work is now “just the expansion and rehabilitation of the Illinois Terminal,” which will include a parking deck.
The MTD had previously planned to partner with Core Spaces on the expansion project.
That company, along with local businessman Hans Grotelueschen, presented a proposal called The Yards that included several other components across 11 acres, including a sports arena. The idea was introduced before the COVID-19 pandemic.
However, the arena and other parts of the project became more uncertain after the University of Illinois, also a partner on the project at one time, announced in May 2022 that it no longer planned to add a Division I men’s ice hockey program.
“Although the joint development aspect of the project has been removed due to market conditions, construction costs, site constraints and financing challenges outside MTD’s control, the project’s fundamental transportation purpose, need and public benefits remain unchanged,” Ashlee McLaughlin, the MTD’s external affairs director, wrote in a recent report. “Strong collaboration continues between MTD, the city and private development partners pursuing complementary investments in the area.”
Gnadt said there could be some “ancillary developments” within a quarter-mile radius of the terminal.
“We have a good relationship with Royse Witte,” he said. “We’d like them to continue to pursue additional developments in the area. We think that they’d be good partners in that regard.”
Royse Witte Downtown is made up of Omni Development President Dennis Witte, Royse Holdings Principal Mike Royse and Carlier, who is CEO of Royse and Brinkmeyer Apartments. The trio are also partners on The Inman.
Carlier said in an interview last month that the group is looking into the possibility of developing an ice arena downtown, with “Plan A” being land bounded by Walnut, Logan, Market and Marshall streets that was previously targeted for The Yards.
The MTD’s board will vote Wednesday on whether to approve a $5.76 million architecture and engineering contract with Stantec Inc. on the terminal expansion project. The amount includes a 5 percent contingency and could be subject to change, McLaughlin said.
Some 80 percent of the contract will be funded with federal dollars and 20 percent will be covered by local funds.
