A majority of city commissioners agreed Tuesday that a 15-year, 95 percent tax abatement for an expansion of the historic Eldridge Hotel in downtown Lawrence is a good deal for the city.

“A tax abatement is really an investment in the community’s future,” said City Commissioner Terry Riordan. “One of the things we say as a city is we’re going to help downtown, and this falls into that category. And I’m comfortable with the numbers.”

Commissioners on a 3-1 vote gave preliminary approval to the tax abatement that will be issued through the Neighborhood Revitalization Act. Mayor Mike Amyx voted against the request, saying he was concerned about the size and length of the tax abatement. Commissioner Bob Schumm recused himself from the debate because he owns commercial property near the hotel property.

The tax abatement is expected to save the Eldridge project about $2 million in property taxes over a 15-year period.

Commissioners on Tuesday, however, were stressing that they believe the tax abatement ultimately will result in a positive cash flow for the city. The expansion — which will add 54 guest rooms, restaurant and bar space, 7,000 square feet of banquet space and other amenities — is slated for a vacant lot just south of the hotel at Seventh and Massachusetts streets.

The lot currently only pays about $4,900 a year in property taxes. Once the $12.5 million expansion project is constructed, it will pay about $12,000 to $13,000 a year in property taxes. But the big revenue gain for the city and county would be through increased sales taxes. The city estimates the expansion will generate about $2.9 million in sales taxes over a 15-year period. The project also will generate additional guest tax revenues the city uses to fund the Convention and Visitors Bureau and other such functions.

The project won commission approval despite some questions from the public about whether the city needed to do more to evaluate the project and its financial projections. The ownership group of The Eldridge included Lawrence businessman Thomas Fritzel, who also is the leader of the private company that built about $12 million worth of city-funded infrastructure at Rock Chalk Park. That work now is the subject of a city audit to determine, among other issues, whether proper accounting procedures and cost controls were used in the project.

Lawrence attorney Ronald Schneider on Tuesday urged commissioners to delay any decision on the Eldridge incentives until the Rock Chalk Park audit is completed later this month. In a letter to commissioners, he said moving forward prior to the audit findings “will encourage additional criticism, skepticism and questions by the citizens of Lawrence.”

Commissioners, though, said they did not think a delay was warranted. Commissioner Mike Dever, a longtime supporter of the Rock Chalk Park project, said the audit was initiated by the city not because there was any evidence of wrongdoing on the part of Fritzel, but rather to provide additional assurances to the public that the project was a good use of public funds.

City Commissioner Jeremy Farmer also said he thought waiting for the audit wasn’t necessary. He said the potential new sales and guest tax dollars that could be generated by the Eldridge project had him comfortable with moving forward. He also said he’s concerned the public is adopting an unfair attitude toward developers.

“It is crazy to me how the community, in a sense, vilifies people who want to spend money here,” Farmer said.

Questions also were raised about whether the city’s financial analysis of the project was accurate. City staff members attempted to figure a cash-flow analysis to determine whether the project would be feasible without an incentive or with a smaller incentive. That analysis found the rate of return on the project was small. But staff members — after being questioned by city commission candidate and former IRS auditor Stuart Boley — acknowledged there were other methods for valuing the project that likely would have shown a higher rate of return for the project. Those methods weren’t pursued because city staff did not have the in-house expertise to assign projected real estate values to the hotel property.

The tax abatement still needs to win approval from the Douglas County Commission and the Lawrence School board. City commissioners also will have to give the project a final round of approval. That vote is set for March 10.

In other news, commissioners:

• Unanimously approved a memorandum of understanding between the Lawrence Police Department and Kansas University that establishes a set of protocols for investigating and communicating information about sexual violence crimes that involve members of the KU community.

• Delayed action on a proposal to revoke a city policy that allows the city to recoup a daily jail fee of $74.02 per day from people who are serving time in the Douglas County Jail for municipal offenses. Farmer has urged the repeal of the ordinance because he thinks the policy creates a financial burden on low income people who have gotten out of jail and are trying to turn their lives around. City commissioners expressed interest in revoking the policy, but asked for additional information from city staff. The item is expected to be discussed again at next week’s City Commission meeting.