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City Grants Hotel More Time to Buy Land

Cobblestone Hotels has been given an additional five months to buy property to build a four-story, 62-room hotel at the corner of Egg Harbor Road and 12th Avenue in Sturgeon Bay.

The Common Council voted Tuesday to approve an amendment to the development agreement that extended the deadline for Cobblestone Hotels to acquire the property from Dec. 31 to May 31.

Under the agreement, Cobblestone Hotels must “take all necessary steps to create and obtain ownership of the property” on or before the deadline, or else the agreement would automatically terminate.

The property is owned by Steve Estes and Scott Virlee, who are now redeveloping the nearby former Pamida store property at 1023 Egg Harbor Road into an events and activity center.

Anna Jakubek, vice president of development for Cobblestone Hotels, said the ownership group has not acquired the hotel site yet because higher construction costs and increased interest costs required more equity to be raised and slowed down the project’s development. 

Because the completion date of the hotel had already been extended in the agreement, Jakubek said she sought a similar extension for the land acquisition.

The city previously agreed to extend the completion date of the project from Dec. 31, 2024, to June 1, 2025. Under the development agreement, the city will pay Cobblestone Hotels $1.2 million in financial incentives. The city would pay $810,000 within 30 days of the issuance of an occupancy permit, and the remainder over 15 years at $26,000 annually, starting in 2026.

To qualify for the financial incentives – which would be paid back in property taxes generated by the project in Tax Increment District (TID) #6 – the agreement also requires Cobblestone Hotels to guarantee a minimum assessed value of $6.21 million as of Jan. 1, 2026.

The hotel’s design and site plan will require approval by the city’s Aesthetic Design and Site Plan Review Board. Cobblestone Hotels has yet to submit those project plans to the city, said community development director Marty Olejniczak.