Developers of a planned Extended Stay America hotel in Palmetto are ready to start looking at next steps after the Community Redevelopment Agency board approved a new incentive agreement.
The four-story, 120-suite extended stay hotel, estimated to cost $14 million, is the first piece of a multi-business plan for the site at 1550 U.S. 301 N. in Palmetto.
The deal is not final. Still needed are a traffic study and the approval of the city attorney.
CRA Director Jeff Burton is excited for the project, saying it’s been decades that they’ve been trying to get a hotel in the city.
“It’s another large-scale development in Palmetto, and a use we currently don’t have,” Burton said.
In an Aug. 12 meeting with the Community Redevelopment Association board, which is made up of city commissioners, Rod Connelly, president of the site’s developer, Civix, told the CRA board indicated the hotel may take their project elsewhere if a new, bigger incentive agreement wasn’t reached soon.
The need for a new deal came after developers asked for an amended incentive agreement that would be paid out over the life of the CRA, or through 2044.
Board members wanted to see the final version, but it could not be brought back before board for approval until Wednesday.
Even then, the version is not truly final yet.
City attorney Mark Barnebey pointed out two sections of the agreement holding up the process: The need for an approved traffic study and for the board to decide if developers had until 2020 or 2021 to build the hotel before they start losing incentive dollars.
Part of the new agreement requires an approved traffic study. A traffic study was done in 2017 for the site but never approved. City staff may need to have a consultant go over the study before it can be approved, according to Barnebey.
Manatee County is already planning improvements to the road there, so the traffic study will determine how much the developer will pay versus the county, Barnebey said.
Once a traffic study is approved, whether it’s the 2017 version or a new one, the agreement can be signed. It’s unclear how long it would take to get a traffic study approved.
The new agreement also gives developers until 2021 to have the hotel completed before reductions to the incentive money kick in. This however, will mean the CRA loses some money because there is less time in the life of the CRA with the building on the property and the city will receive less in tax dollars.
Connelly said the date extension was requested because they’re “dealing with the practical realities of the process.”
CRA board members voted 4-1 to approve the incentive agreement, allowing the project to move forward, pending review and approval of the city attorney and the traffic study. Brian Williams cast the lone dissenting vote, having disapproved of another portion of the agreement unrelated to the traffic study or incentive date deadline.
Work on the project can start as soon as developers get the permits from the city.
The full proposed project for the lot at 1550 U.S. 301 N. includes plans for the new hotel, a restaurant and a mini-storage facility. The vacant 7.5 acres was purchased by 301 North LLC in 2005 for $2.6 million.
A rezoning request for the land was approved by city commissioners in April 2018.
This is first hotel project in decades for the city. The Oaks hotel was built in 1907 but a fire damaged the wooden hotel in 1970s. There was also the Palmetto Hotel, which can be seen in photos of the Palmetto Business District between 1905 and 1910.