Commission approves Midtown amendment, paves way for 105-room hotel and $20 million IRB sales-tax exemption

The Manhattan City Commission on Monday approved a second amendment to the Midtown development agreement that clears the way for a 105-room Hampton Inn at Twelfth Street and Laramie in the Aggieville district and separately authorized $20 million in industrial revenue bonds (IRBs) to enable a construction sales-tax exemption.

City staff said the amendment and IRB authorization are intended to accelerate private development in Aggieville, generate tax increment finance (TIF) revenue for urgent infrastructure work and coordinate private construction with planned street and alley improvements. The votes were unanimous: both motions carried 5-0.

City planning staff and the developer presented the package as a scaled, revenue-focused reset of a previously proposed mixed-use project that stalled. Jason (city staff) reviewed the project history and said the original Midtown concept (approved in 2022) could not move forward as proposed; the developer is proposing a hotel and associated private 100-stall parking structure instead. TJ Vilcanskis of Back 9 Development, representing Midtown Land Company, said the current plan calls for a 105-room Hampton Inn by Hilton with roughly 102 parking stalls and that Hilton is under contract to operate the hotel.

"We've received zero calls on this piece of property in the whole time we've owned it," TJ Vilcanskis said, arguing the hotel was the financially viable option after investor withdrawals and an increase in available office space locally. He said the developer estimates the combined revenue streams from property tax increment, city sales tax and transient guest tax would repay the city's prior $2.3 million land credit in about three to four years of hotel operations.

City staff described expected district benefits in the packet and presentation: a projected $4 million in additional property tax increment captured through the TIF, approximately $1.6 million in city sales-tax receipts over the TIF life, and nearly $5 million in transient guest tax over the same period. Staff also reminded commissioners that Aggieville's TIF was intended to support roughly $40–$50 million in needed public-infrastructure work (streets, water, storm and sewer lines) and that the TIF alone was forecast to generate about $20 million for the district.

Supporters from the Aggieville Business Association and the Manhattan Area Chamber of Commerce urged approval. Dennis Cook of the Aggieville Business Association said the board was "100% unanimous in support" and argued the hotel would bring customers to local businesses and help speed infrastructure work. Jason Smith, president and CEO of the Manhattan Area Chamber of Commerce, said the project would produce revenue critical to completing Aggieville infrastructure and noted that office and retail demand has softened since the original Midtown proposal.

Opponents warned the commission about the developer changing plans repeatedly and said a hotel could harm the district's long-term mix of retail and residential uses. Amber Starling, speaking during public comment, criticized the developer and the commission's prior handling of downtown projects and raised concerns about corporate behavior and the local jobs the hotel operator might provide.

The commission approved two formal actions on the item: - A second amendment to the Midtown development agreement for the Midtown Phase 1 site at Twelfth Street and Laramie — outcome: approved, vote 5-0. - Resolution No. 012125d authorizing issuance of industrial revenue bonds in the amount of $20,000,000 to permit a sales-tax exemption on construction materials for the project — outcome: approved, vote 5-0.

Officials said a yes vote allows the developer to pursue building permits, coordinate construction with the city's upcoming Twelfth Street streetscape work and for the city to begin capturing TIF and related revenues if the project proceeds. Staff and the developer described a schedule aiming for an aggressive construction timetable to open the hotel by the 2026 fall season if permitting and financing proceed on the noted timeline.

What commissioners asked and the record: commissioners pressed the developer and staff on why alternatives (grocery, multifamily housing, retail or mixed-use) were not feasible on that parcel; staff and the developer said market conditions, recent increases in available office space and financing constraints led them to the hotel option. Commissioners also asked for clarification on TIF and sales-tax funding splits (staff said roughly $20 million in TIF and $30 million in sales-tax-directed infrastructure funding had been planned) and about the contractual $2.3 million clawback tied to development milestones if the developer fails to meet permit or construction deadlines.

The commission's decisions do not change zoning; the parcel is in the Aggieville District and remains subject to the district design standards discussed during the presentation. Staff said subsequent steps include permitting review, coordination on Twelfth Street public works, and execution of documents tied to the IRB resolution and sales-tax exemption.

Votes at a glance: both related motions passed unanimously, 5-0.

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