SHEBOYGAN – The city still hopes to bring a hotel to downtown, but it wants to pull out of an agreement for a project that is nearly five months behind schedule.
The Finance and Personnel Committee Aug. 10 approved recommending the Common Council enter a termination agreement with Waterside Hospitality LLC, which failed to fulfill contractual obligations to the city for a 104-room hotel with a rooftop restaurant and ground-level distillery approved last summer.
The developer was unable to show proof of financing to the city, according to Director of Planning and Development Taylor Zeinert, and they didn’t notify the city when construction would begin. The commencement notice was due March 1, according to a TID agreement.
The city notified the developer July 16 that they were in default of the agreement, and the developer requested the city terminate the development agreement.
If the termination agreement is approved, Waterside Hospitality LLC would pay the city nearly $16,000 for incurred legal fees for von Briesen & Roper’s work related to the project, including the negotiation, development agreement and termination agreement.
Construction was supposed to start by March 31 this year, and the completed hotel was supposed to open by Sept. 30, 2027, according to the TID agreement. The project was estimated to have a minimum value of $14 million. The developers could have received up to $2.8 million in tax increments.
“This is never really the direction that we want a project to go,” said Trey Mitchell, chair of the Finance and Personnel Committee. “Once we have that development agreement in place, we would obviously love to see it go through, but it does reflect the care and effort that goes into the way that we craft the agreements to make sure that the city is protected.”
City wants to find another developer for a Marriott hotel
The lot, on the corner of North Eighth Street and Ontario Avenue, is ready for another project, Zeinert said. Other prospective developers have reached out to the city about that site. Once the termination agreement is signed, she said the city will explore possible projects.
The city purchased the land, which formerly housed the Fountain Park Restaurant and Inn, for $3.2 million in fall 2024. It also awarded a $253,800 bid to demolish the buildings, which closed early last year.
The city would’ve incurred those costs anyway to prep the site for a new development, Zeinert said. The city still owns the land.
Hotel would be SpringHill Suites, not a Spring Garden Inn, which doesn’t exist
The hotel has been marketed, discussed and approved as a Marriott Spring Garden Inn, but that is not within the Marriott hotel brands. City Administrator Casey Bradley said that was likely a misunderstanding, but the hotel would be a SpringHill Suites.
Bradley previously said a downtown hotel would complement the revitalized Stefanie H. Weill Center for the Performing Arts and support business travelers visiting major employers.
Contact Alex Garner at 224-374-2332 or agarner@usatodayco.com.
This article originally appeared on Sheboygan Press: Sheboygan still wants a downtown hotel, but with a different developer
Reporting by Alex Garner, Sheboygan Press / Sheboygan Press
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By Alex Garner, Sheboygan Press | USA TODAY Network
