Sturgeon Bay Inks a Deal for New Hotel

A development agreement to build a 62-room hotel with four stories at the corner of Egg Harbor Road and 12th Avenue in Sturgeon Bay received Common Council approval Feb. 21. 

The city has agreed to pay $1.2 million in financial incentives for the Cobblestone Hotel project, with half 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 in Tax Increment District (TID) #6 – the agreement requires Cobblestone Hotels to guarantee a minimum assessed value of $6 million as of Jan. 1, 2025.

Community development director Marty Olejniczak said the site to construct the hotel near the former Pamida and Save A Buck buildings has been underutilized, and a study determined the project would be feasible in that location.

“As with most developments that we’ve seen the last several years, it’s very difficult to do projects without some type of financial incentives,” he said. 

District 1 alderwoman Helen Bacon said TID # 6 was created to make improvements along Egg Harbor Road.

“That’s a positive, and I think the financial agreement – the fact that we don’t have to pay them their first payment until occupancy to get the occupancy permit – is good,” she said.

Olejniczak said that as an added part of the agreement, the property owner agreed to dedicate a private drive as a public right-of-way leading to 14th Avenue next to city-owned property.

“That would improve our ability to improve that city-owned parcel at 911 North 14th Avenue,” he said.

The project still needs approval 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.

“[The property] is zoned for a hotel – it’s a permitted use,” Olejniczak said. “Unless they need any type of variances – say from a height requirement or setbacks or something – they will not need to go before any other committees.”