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Watertown council conveys old City Hall for downtown 30‑room Air Stay hotel
Summary
The City Council approved a conveyance of the old City Hall property to the Watertown Development Company and a restricted sale to Air Stay Watertown LLC to build a 30‑room hotel; the buyer must demolish the existing building, complete construction in 24 months and secure a $300,000 bond.
The Watertown City Council approved conveying the former City Hall property to the Watertown Development Company and a restricted sale to Air Stay Watertown LLC for construction of a 30‑room hotel on the downtown site.
Council approval matters because the agreement transfers a publicly owned building into a privately developed, tax‑paying property while imposing performance requirements intended to safeguard the city if the project does not proceed.
Mayor Hollien told the council the city had declared the building surplus on Feb. 3 and had explored multiple options before developers proposed a hotel. The contract drafted by City Attorney Lisa Carrico specifies that the Watertown Development Company may acquire the property only to transfer it to Air Stay Watertown LLC for the hotel; if the sale does not close or the project is not completed, ownership reverts to the City of Watertown. The sale is scheduled to finalize between Sept. 1 and Oct. 1, and Air Stay Watertown LLC is responsible for demolition and rubble disposal of the existing building.
Under the contract, Air Stay Watertown LLC must complete the hotel within 24 months of closing. The company will secure a bond that will pay $300,000 to the city if construction is not finished in the agreed timeframe. City staff told the council that demolition cost estimates ranged around $300,000 based on outside estimates the city had sought.
Developer representative Clay Wolford said the project will include parking under the building and about 30 rooms, and described the rooms as “upper mid scale” with features intended for both short and some weekly stays. When Councilman Shutti asked whether the hotel would offer extended monthly stays, a developer replied, “The plan is for it to be overnight stay hotel,” and added that some units would include kitchenettes to support week‑long stays.
Mayor Hollien framed the deal as a downtown economic win: “I hope everyone can understand what a huge win this is for Watertown.” Council members who spoke during the discussion praised the private investment and the developers’ willingness to take on demolition and construction risk.
A motion to convey the property was made by Councilman Bueller and seconded by Councilman Tupper. Interim City Manager Bob Zien called the roll for the vote; Councilmembers Jerns, Peters, Shutti, Tupper, Bueller and Hollien voted aye, Danforth was absent, and the motion carried.
The developers said they will present a request to the Board of Adjustments about parking. The council discussion and the contract limit the permitted use of the site to the hotel described in the agreement; any change to that use would require city action or a new agreement.
