Four-Story Hotel Proposed in Sturgeon Bay

A 62-room hotel with four stories is being proposed for the corner of Egg Harbor Road and 12th Avenue in Sturgeon Bay near the former Pamida and Save A Buck buildings.

After meeting in closed session Tuesday, the city’s Finance/Purchasing and Building Committee recommended that the Common Council approve a development agreement with incentives for the Cobblestone Hotel project, subject to review by the city attorney. 

Those incentives, financed from Tax Increment District (TID) #6 created for that area, include $1.2 million to Cobblestone Hotels Development. Half would be paid within 30 days of the issuance of an occupancy permit, and the remaining $600,000 provided in 12 annual payments of $50,000.

To qualify for the financial incentives – which would be paid back in property taxes that the project would generate, according to community development director Marty Olejniczak – Cobblestone Hotels would guarantee a minimum assessed value of $6 million as of Jan. 1, 2025.

Olejniczak said the guaranteed property-value assessment would generate more in revenue than needed to pay the $1.2 million incentive.

“In fact, it would provide some excess increment that the city could use for other development needs in that TIF district,” he said. “Most notably, we know we have some stormwater concerns.”

Anna Jakubek, vice president of development for Cobblestone Hotels, said the company has been looking into the possibility of locating a hotel in Sturgeon Bay since 2017.

This drawing shows the site plan for the proposed Cobblestone Hotel project at the corner of Egg Harbor Road and 12th Avenue in Sturgeon Bay. Submitted.

“We specialize in building upper-midscale hotels for small-town America,” she said. “That’s been our main focus.”

The development budget the company provided lists building specifications for standard and extended-stay rooms and a fitness room, meeting room, pool, elevator and breakfast for the guests, but no restaurant.

Of the total projected cost of $9,426,000, or $152,032 per room, $6,598,000 (70% of the total) would be financed with a loan.

Cobblestone Hotels would have until the end of this year to obtain portions of two parcels near the intersection to build the hotel, which would have to be “substantially completed” by Dec. 31, 2024, under the development-agreement terms.

Olejniczak said the hotel would be a permitted use in a district zoned general commercial, so the project would not require any special approvals. The four-story height may be the only thing that could come up.

“There’s a 45-foot height limit,” Olejniczak said. “We’re not 100% certain if it would meet it or not. It could be a variance situation or a planned unit development situation, if necessary.”

Olejniczak said the one additional approval the project would need would come from the city’s Aesthetic Design and Site Plan Review Board, which would look at the layout of the property and the aesthetics of the architecture.

“If you look at the prototypes that Cobblestone has, I think that it would fit in very nicely on Egg Harbor Road,” he said.

Mayor David Ward said the corner of Egg Harbor Road and 12th Avenue is “a great site” to locate the hotel.

“Thank you, again, for considering us for this investment,” Ward said.

The council is expected to vote on the agreement Feb. 21.

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