Hampton Inn Seeks to Build at Former Cobblestone Site

The City of Sturgeon Bay is considering a new chain hotel proposal for the site at the corner of Egg Harbor Road and North 12th Avenue. Hampton Inn aims to build an 80-room hotel on the site that was previously targeted by Cobblestone Hotels

After failing to reach a purchase agreement for the site, Cobblestone turned its attention to city-owned property on the west waterfront, where it wants to build a four-story, 62-unit hotel in Tax Increment District (TID) #4. That proposal is scheduled to be back before the city’s Finance/Purchasing and Building Committee on May 14. 

That same committee will consider the Hampton Inn proposal on Tuesday.

Steve Estes, who with Scott Virlee co-own the property at Egg Harbor Road and North 12th Avenue next to their Door County Boardwalk business venture, said having a hotel located there would be beneficial for their event and entertainment venue. Estes said the sale of the property to Hampton Inn is dependent upon the city reaching a development agreement with the hotel chain.

The layout for a proposed Hampton Inn at the intersection of Egg Harbor Road and North 12th Avenue in Sturgeon Bay. Submitted.

The committee on Tuesday will consider a proposal to build a four-story Hampton Inn with 80 rooms – 72 standard rooms and eight full-service suites. The building would also have an indoor pool, fitness center and other amenities.

Rodac Development and Construction, which would build the facility, has requested financial incentives from the city where the hotel would be located in TID #6. 

Representatives of Rodac have met with Mayor David Ward and other city officials along with the property owners regarding the proposed hotel project, for which the committee will be asked to support $2 million worth of incentives, to be paid upon completion of the hotel, which would have to guarantee a minimum assessed value of $13.9 million.

Between the two projects, the committee will be considering incentivizing the construction of 142 new hotel rooms in the city, a 23% increase from the 619 hotel, resort, inn or bed and breakfast units the city has today. The city’s peak occupancy rate hovers around 75-78% for the month of July. The highest peak occupancy rates in the county surpass 90% in the Village of Egg Harbor and 91% in Ephraim. Sister Bay, Gibraltar and Baileys Harbor also peak at above 80% occupancy in July.

The project timeline Rodac provided to the city lists construction and development taking place from late summer or early fall of 2024 to the summer of 2025 and a grand opening in the summer of 2025.

Community development director Marty Olejniczak said the project would generate more in property tax revenue than needed to pay the $2 million incentive, which would need to be borrowed.

Based on a 6% interest rate and using the current tax rates, estimates from the city’s financial consultant, R.W. Baird, indicate the hotel would be projected to generate an additional $700,000 above the total cost for the incentives to fund additional projects in TID #6.

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