Downtown hotel project now slated to begin in June, following city’s latest approval

Construction work on a multistory hotel at Ninth and New Hampshire is now expected to begin in June, ending a monthslong process in which the lot for the project has sat vacant.

Doug Compton, the lead developer for a project to build a 91-room TownePlace Suites by Marriott at the intersection, said the project has undergone changes since the beginning of the year but is close to being finalized.

“It has been more complex in working with Marriott than we anticipated, but it has been more complex in a good way,” Compton said Tuesday night after receiving a change in the project’s incentives package at City Hall. “Marriott is constantly changing rooms, changing details to make it a better project.”

After city commissioners on Tuesday unanimously approved a change that increases the amount of tax increment financing dollars that can be used to pay for a private parking garage for the hotel, Compton said he expects construction to begin in early June on the project.

Tuesday night’s City Hall approval largely was viewed as a technical change to an already-approved package of incentives. The hotel project and a 114-unit, multistory apartment project on the northeast corner of the intersection have been approved to use tax increment financing and transportation development district funds.

But the previously approved agreement placed a $3.5 million cap on the amount of TIF funds that can be spent on the underground parking garage to serve the hotel. At the time of the agreement, it was estimated the parking garage and related site work would cost $3.5 million. Now, the parking garage has grown from 89 spaces to 103 spaces, and is expected to cost about $4 million to build. Commissioners increased the cap to $4 million.

The change, however, is not expected to increase the amount of TIF dollars the two projects combined are scheduled to receive. That’s because the additional $500,000 in TIF money is expected to come from the TIF dollars set aside for the apartment project on the northeast corner.

Compton, who also is leading the development group for that project, said the apartment project can better withstand the loss of the TIF revenues because it is a larger project that can have its costs spread out over a larger number of users.

The hotel project, though, could have been in jeopardy if the tax increment financing cap wasn’t adjusted.

“It was a critical piece for us to get all this together,” said Mike Treanor, a Lawrence architect who also is part of the development group. “We’re in the final stages where we have to get all the numbers to align. To do projects on a site like this is really tough, so it is great when we have the support from the city.”

City commissioners said they were comfortable with the change after city staff members assured them a key provision of the incentives package hadn’t changed: The city won’t be taking on any debt for the project, and the developers won’t be paid any money upfront. Instead, the TIF is structured so that tax dollars generated by the new construction will rebated back to the developers, but only after they produce invoices for approved parking garage and infrastructure work.

Compton estimates that once construction begins on the hotel, it will take about 15 months to complete.

Compton on Tuesday also reaffirmed his plans to rebuild a portion of the Lawrence Social Service League Thrift Store as part of the project. The store at 905 Rhode Island St. is adjacent to the hotel site. As part of the negotiations for the project, Compton offered to rebuild the makeshift addition that is attached to the store’s historic building.

Compton said he is finalizing a lease for the Social Service League Thrift Store to temporarily relocate into a portion of the former Allen Press property at 11th and New Hampshire streets while the construction work takes place.

In other city business, commissioner on Tuesday unanimously:

• Agreed to send a letter to the Kansas attorney general asking for time to create a plan to comply with the state’s new concealed carry laws. The new state law gives cities a chance to be exempted from the law until at least Jan. 1, 2014. Eventually, the law may require the city to either install metal detectors at the entrances of city buildings — like City Hall — or else allow licensed concealed carry permit holders to bring weapons into the buildings.

• Referred to staff for additional study a request for more than $500,000 worth of incentives from Lawrence-based Wicked Broadband. Wicked — formerly Lawrence Freenet — is seeking the incentives as part of a project to increase broadband speeds in the city.