The city is giving a hotel development group a boost of up to $1.89 million in a 12-year tax-incentive deal in exchange for a 42,000-square-foot, 90-room Tru by Hilton hotel.

The city earlier this year OK’d the construction of the new hotel in the 2700 block of Pontiac Place by a group of three developers who built the Marriott TownePlace Inn and Suites just next door. On Monday, the Janesville City Council OK’d a tax-increment financing deal of up to $1.89 million for the project.

Dayna Sarver, an economic development official with Madison firm Redevelopment Resources, said three developers from Iowa, Madison and West Bend asked the city for tax-increment financing incentives to bridge a gap in the cost of the project.

Redevelopment Resources has been working as a third-party economic development consultant for the city of Janesville on some development deals in the absence of a full-time economic development director.

Sarver said the city’s deal would extend 12 years to help the project move past the funding gap, but the TIF deal has a “pay-as-you-go” structure, which means the city would ultimately reimburse the developer for costs based on how the hotel performs.

Under the TIF agreement, the Hilton hotel could receive as much as $1.8 million in incentives over the next 12 years. In the first year of the TIF deal alone, the hotel likely will generate an additional $157,000 in new tax value to the area, according to officials.

The spot along Pontiac Place where the hotel is being proposed is the site of a former Menards lumber yard that developers revamped as a four-store retail strip mall that houses Joann Fabric, Ross Dress For Less, Five Below and PetSmart. The same developer built TownePlace Suites under a plan that the developer said in 2017 would likely include a second hotel at a later date.

The city had designated the land where the Hilton hotel is now proposed as well as the former Menards land as a TIF district to spur redevelopment there.

City council member Douglas Marklein recalled when the land for years housed nothing but a vacant retail building and the blighted skeleton of a Menards lumber storage building. He said the TIF deal and the emerging hotel project would create “the final piece in the puzzle” that he said will make the redeveloped land along Pontiac Drive and Highway 14 “a great gateway to Janesville.”

Sarver said the new Hilton hotel is one geared to appeal to millennials and families, such as people who are traveling for youth sports tournaments.


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