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Developer to withdraw proposal for $63 million hotel near St. Marys

Developer to withdraw proposal for $63 million hotel near St. Marys

The developer behind a controversial hotel proposal near St. Marys Hospital plans to withdraw his application due to higher than expected costs.

In an email sent out Friday, City Administrator Stevan Kvenvold said the developer, Larry Brutger, "indicated that his project cost has increased many millions of dollars over what was originally planned, and he is unable to make the project financially feasible."

 
 

Brutger's $63 million proposal called for a 225-room Holiday Inn on Second Street Southwest, directly across from St. Marys. He had requested $5.6 million in tax increment financing (TIF) assistance for the project.

"In some recent conversations with Larry, the city staff indicated that we were willing to almost double the recommended TIF assistance for his project from what we had been recommending, however, that did not change the financial feasibility for his proposed project," said Kvenvold.

 
 

The proposal experienced a number of setbacks over the past couple months due to concerns over the potential use of public incentives. City leaders and neighborhood advocates were skeptical of Brutger's request to use TIF money on an underground tunnel connecting the hotel with the St. Marys campus.

Soon after Kvenvold's email went out, City Council Member Michael Wojcik wrote on Facebook that he hopes the project serves as a reminder that developers seeking public funding "should be careful to engage stakeholders early in the process"

"There are some other good projects coming in the area and I am sure we will get another proposal soon. This will hopefully allow staff to regroup and get smart infrastructure ahead of proposals."

 
 

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