A city committee has given preliminary approval to tax breaks for the proposed Eldridge hotel expansion, which would fill a long-empty gravel lot on Massachusetts Street.

Lawrence’s Public Incentives Review Committee considered the Eldridge’s request during its meeting Tuesday. A public hearing on the matter is tentatively set for the Feb. 10 City Commission meeting.

A rendering of a planned expansion of the Eldridge Hotel in the 700 block of Massachusetts.

The 48-room Eldridge, 701 Massachusetts St., wants to expand into the lot directly south of the hotel, which has been vacant since 1973. The expansion would house 54 new guest rooms, 7,000 square feet of meeting and banquet space, a kitchen expansion and a restaurant and bar.

The hotel hopes to begin construction in March or April, but General Manager Nancy Longhurst said the project needs public incentives to make it work financially.

Although the project would fill a blighted spot on the city’s main strip and help the Eldridge attract more guests downtown, she said, according to the Eldridge’s projections it would take years for the hotel to make money from it.

“We have to do it in this manner or the lot would stay vacant,” she said.

Longhurst said rather than seeking immediate cash flow, the historic hotel was committed long-term to the corner.

The Public Incentives Review Committee approved the Eldridge’s request for two incentives: to establish a 15-year, 95 percent Neighborhood Revitalization Area and for a standalone Industrial Revenue Bond to obtain a sales tax exemption on construction materials.

Under Kansas law, the establishment of a revitalization area enables a property owner to receive a rebate on a portion of the incremental increase of property taxes associated with an improvement project within the area. 

According to the city’s cost-benefit analysis, the estimated tax paid with approval of the request would more than double the current property tax collections of $4,942 a year. During the first full year of project operations, property tax collections are estimated at $11,012.

Approval of incentives would likely be subject to conditions including architectural requirements and a timely construction schedule, City Manager David Corliss said.

Mayor Mike Amyx also expressed concern about the expansion’s effect on downtown parking, although Longhurst said Eldridge guests do not complain about parking and that the hotel’s gated valet lot has room to accommodate the expansion.

The Eldridge also has requested that Douglas County and the Lawrence School District participate in the revitalization program, and discussions at their respective governing bodies are expected in February.