Council authorizes work on P3 parking-garage and 160-room hotel proposal

The Melbourne City Council on Oct. 28 directed staff to prepare a comprehensive public‑private partnership agreement with Melbourne Hospitality Holdings (MHH) for a proposed 160‑room hotel and an attached 542‑space joint‑use parking garage.

The proposal calls for MHH to build a seven‑level precast concrete parking structure with 542 spaces, of which 300 would be dedicated public parking funded with about $10.5 million in Community Redevelopment Agency (CRA) dollars during construction. The remaining roughly 242 spaces would be reserved to meet the hotel’s code requirement and leased or licensed back to the developer. The unsolicited proposal also requests a 10‑year tax increment financing (TIF) style reimbursement for hotel property taxes.

Cindy Dittmer, staff lead on the project, told council that outside consultants (DRMP and Grow America) reviewed construction and finance assumptions and found the city’s requested incentives “reasonable and necessary to make the project feasible.” Lance Sheeta, representing Melbourne Hospitality Holdings, described plans for hotel meeting space, a roughly 7,000‑square‑foot ballroom and restaurants, and said MHH owns and operates properties it develops.

Council members pressed staff and the developer on several open issues: whether stormwater for the garage and hotel would be separable, how hotel and public parking would be enforced (access-control for the hotel’s upper levels), loading access for the O’Galley Civic Center, the timing and content of a county amendment to the CRA interlocal agreement, and the schedule and performance bond requirements. Staff said the proposal is contingent on completion of an amended interlocal agreement with Brevard County and that a performance bond and additional permitting details would be negotiated before construction.

The council’s direction authorizes staff to draft and negotiate the full P3 agreement consistent with state law (including required public hearings) and with the modifications discussed in the staff memo. The motion passed on a voice vote.

Next steps: staff will draft the comprehensive P3 agreement and return to council at a subsequent public hearing with final draft terms, performance‑bond language and parking‑management details. The agreement remains contingent on county approval of the amended CRA interlocal terms and final permitting.