Lighthouse Properties and city staff presented a preliminary plan Sept. 22 to build a second downtown hotel — a 80‑room SpringHill Suites franchise — on the city-owned parking lot at the corner of South Seventh Street and Walnut, and to build a public parking garage next to it to replace the lot.

The developer said the Marriott brand would expand the reservation and loyalty pool downtown and that the proposed hotel site would be linked to Santa Fe Street by a 50‑foot-wide extension of Spillman Plaza that would improve pedestrian access. Guy Walker of Lighthouse Properties said renderings show the hotel behind Old Chicago with a parking garage immediately north, and that the franchise agreement is currently for 80 rooms with an allowance to adjust by about 20 percent.

City staff said a new parking garage was essential to the concept. Jacob (city staff) told commissioners the administration has been working with Lighthouse Properties on project design and potential funding. City staff described a financing approach that would rely on incremental tax revenues captured in specially created districts rather than the general fund: re‑adding the city lot to the Downtown TIF (tax increment financing) or creating a small new TIF over the hotel footprint, using a community improvement district (CID) sales‑tax increment and redirecting transient guest tax and future StarBond receipts once existing bonds pay off. Staff estimated the garage construction on the order of tens of millions and discussed a bond to finance the city‑owned garage; commissioners asked staff to return with more detail.

Commissioners and the developer discussed operational details: how guests would drop off and check in, the plan for a pedestrian bridge between a second‑floor hotel entrance and the garage, and the possibility of a five‑level precast parking structure yielding roughly 389 spaces compared with the current lot’s roughly 155 spaces (the project renderings showed a net gain of about 144 spaces). Walker said the developer’s market analysis, using STR (Smith Travel Research) data, indicates the existing Homewood Suites’ occupancy and rate performance would support a second downtown flag, and that the new hotel would be positioned at a lower nightly rate than the Homewood.

Staff said the most likely financing mix would include a new, short TIF over the hotel site that could capture property tax, sales tax and transient guest tax for up to 20 years, a CID (1–2 percent) in the hotel block, and potential reallocation or project additions to the StarBond district. Staff emphasized those changes require multiple legal and public steps, including amending the Downtown master development agreement, creating or amending TIF/CID districts and public hearings. A price tag cited by staff was described to commissioners as about $13 million for the garage; staff said precise cost estimates would be developed by architects and finance staff. Commissioners expressed support for continuing, and the commission directed staff to proceed with legal review and further work on district and financing design.

The discussion was conceptual; the commission did not vote to adopt financing instruments or transfer the city lot. Instead staff recorded consensus to continue discussions and return with detailed cost estimates, district maps and proposed development agreements if the commission wants staff to pursue the concept further.

Questions and next steps raised at the meeting included: whether the garage would be publicly free or paid (staff said the city prefers not to manage paid parking), the anticipated maintenance needs for a garage (staff will survey hospital and peer communities), coordination with OCCK for drop‑off and transit access, the timing pressure under the franchise agreement (the developer said the franchise requires start of construction within two years of signing), and whether the hotel brand and additional supply would cannibalize other downtown hotels (the franchise approval process and Marriott’s review of the market were cited as part of the brand approval).

Commissioners asked staff to return with a financing plan and timeline, and to consult bond counsel and other advisers on the bonding capacity and legal steps required to create or amend TIF/CID/StarBond commitments. With that direction staff and Lighthouse Properties said they will continue design and financial work and return to the commission for formal approvals at future meetings.