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

A majority of city commissioners are supportive of providing a tax break for the historic Eldridge Hotel to undertake a $12.5 million expansion in downtown Lawrence.

City commissioners at their Tuesday evening meeting stopped short of voting on the project, but a majority of commissioners made it clear they’re ready to approve a 15-year, 95 percent property tax rebate to facilitate an expansion that will add 54 rooms and additional restaurant space to the hotel at Seventh and Massachusetts streets.

“Why would we not want to invest in one of our most historic buildings in downtown?” said City Commissioner Mike Dever.

If commissioners approve the deal, which could happen as early as next week, it would continue a trend of large hotel projects receiving tax breaks in the city. The Eldridge project would be the third since The Oread hotel opened near the Kansas University campus in 2010. City officials also approved tax incentives for the recently-completed Marriott hotel project at Ninth and New Hampshire streets.

Commissioners on Tuesday said they thought the project would produce a good bang for the buck and would be particularly helpful in attracting new visitors to downtown. Commissioners said they also were swayed by numbers from the development group that showed the hotel project would be expected to turn only a $30,000 profit after 15 years if it received no incentives from the city. The report estimated with the requested incentives, the project would produce about a $2 million profit over a 15-year period, which developers noted was only about 1.4 percent return on their estimated $12.5 million investment. The incentive package, which includes an exemption on sales tax for construction materials, is expected to have a total value of about $2.4 million, according to a city report.

“The incentives are critical because it is not an easy deal to make work,” said David Longhurst, a member of the Lawrence-based development group.

Commissioners said they also were leaning toward approving the deal because the project would develop the long vacant lot that sits just south of The Eldridge. That lot produces only about $4,000 a year in taxes for the city. Using the Neighborhood Revitalization Act, the city would be assured of receiving the existing property taxes in the future. The 95 percent rebate only would be applied to the new development on the lot.

Commissioners stopped short of approving the incentives package on Tuesday because Mayor Mike Amyx said he wanted an additional week to examine the project. Commissioner Bob Schumm recused himself from the discussion because he owns commercial real estate near The Eldridge. The other commissioners expressed support for the proposal.

“We say we are such big supporters of downtown,” Commissioner Terry Riordan said. “If so, let’s put our money where our mouth is.”

Amyx said he wanted staff to do further research on whether a 10-year tax rebate would be feasible for the project.

County commissioners and school board members also will be asked later this month to determine whether the 15-year, 95-percent rebate is appropriate. The report by the city’s economic development planner did find that the 15-year time period produced a negative net return for the county under one scenario.

As for the proposed expansion, the project is expected to add 54 rooms, expand the restaurant’s kitchen and restaurant space, and add about 5,000 square feet of additional meeting and banquet space.

In other news, commissioners:

• Agreed to send a letter to Kansas Gov. Sam Brownback protesting his decision to rescind an executive order that provided protection against discrimination of state employees who are gay, lesbian, bisexual or transgender. Commissioners directed City Manager David Corliss to craft a letter that the mayor would sign.

“It is unfathomable stupidity out of Topeka, once again,” said City Commissioner Jeremy Farmer, who was the commissioner to suggest the city send a letter of opposition.

• Unanimously approved industrial revenue bonds that will provide a sales tax exemption for a $14.5 million senior, independent living facility for Pioneer Ridge near Harvard Road and Wakarusa Drive in west Lawrence. The approval will allow the project to avoid paying sales tax on construction materials purchased for the project.