Developer Drops Plans for New Hotel near St. Mary’s Hospital
Rochester, MN (KROC AM News) - A proposed large hotel project near St. Mary’s Hospital that was first presented to the city last August has been withdrawn by the developer.
City Administrator Steve Kvenvold was contacted Friday morning by the CEO of St Cloud-based Brutger Equities.
Kvenvold says Larry Brutger said the estimated cost of the project had risen several million dollars and it was no longer financially feasible. Kvenvold says Brutger did indicate “ he would be willing to pursue this project if something would change in the future to make it more financially feasible or some other project in Rochester in the future.”
Kvenvold says his staff recently offered to double the amount of tax increment financing assistance for the project but it still was not enough to offset the higher-than-expected costs. The city had initially offered $1.7 million to mainly cover the cost of a parking structure that would have included public spaces.
The DMCC Board was briefed on the project in December and was asked to authorize the use of public funds for the development. But many of the board members indicated there were too many questions about the project and other issues in the St. Mary’s area that have to be addressed before they could act on a request for the DMC’s public assistance. The city is not able to use its TIF program for the site because the buildings that were on the property were demolished.
The Holiday Inn and Suites project proposed a 225 room hotel, a full-service bar and restaurant, retail space, a 350 underground parking ramp, along with three for-rent townhomes. The plans also include a potential subway connection under 2nd Street to St. Mary’s Hospital.