Hamilton Chief of Staff Aaron Hufford told City Council city staff has worked with a pair of development groups, Spectrum Investment Group and Acumen Development, on a redevelopment plan for 20 High St. The pair of developers have worked on 126 hotel projects together.
They plan to add the former city building to that portfolio, making it an upscale hotel that features a covered valet at the riverfront entrance, rooftop outdoor and enclosed event spaces, and corporate-style suites. They’d require an addition to accommodate 116 hotel rooms, as the existing building would accommodate 43 rooms.
The project also would allow Municipal Brew Works to expand, doubling its size, and investing $48 million into the project.
Hufford said the development team has not yet selected a hotel company to work with, but are looking at an upscale hotelier, such as Marriot, Hilton, or Hyatt.
The development team hopes to have all city agreements in place by the start of 2024 and closing on the property. Construction would start by mid-2025 and open by 2026.
City Council is expected to vote on the issue at its August meeting, and if approved the deal would allow the development team to buy the building for $1 and provide them with a $2 million city grant. Additionally, they’d receive a 15-year full property tax abatement and a $250,000 contribution towards expanding the building’s utilities.
In exchange, the city is asking the development team to at least invest $30 million with a minimum of 100 hotel rooms ― both would be exceeded by the developer’s expectations ― and negotiate an agreeable lease agreement with Municipal Brew Works.
City Manager Joshua Smith said being an older building, it’s very difficult to turn a lot of the open space of the 1930s-era into usable space, “which is what necessitates the eastside addition of four stories.”
Smith said that selling the building and requiring a substantial investment will take a sizable expenditure off the city’s books.
“The building being almost 100 years old, and very view tenants, it costs the city probably on average approximately $200,000 a year just to not to improve the building, but just to maintain the building,” Smith said.
He said that when analyzing the benefits of the incentives versus just maintaining a difficult-to-maintain building, the agreement is to Hamilton’s benefit. The city spends just to maintain the former city building between $200,000 to $250,000 a year.
“It is going to take some money from the city on the front end, but the return on that investment, to me, is repaid within the first 10 years by virtue of us not having to put money into that facility,” Smith said. “But really, it gets repaid exponentially by taking an anchor building in our downtown and really putting it back into a tremendous use.”
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