The Rancho Cordova City Council on Monday unanimously approved a Marriott extended-stay hotel and event center as part of a deal in which the city will provide $1 million in incentives.
The planned 89-room, 53,600-square-foot development was proposed as another piece of Rancho Cordova’s strategy to draw conventions and other events.
Under the agreement, the city will pay $420,000 for infrastructure needed for the hotel and event center, and defer collection of $580,000 in developer fees.
“We need the convention space,” Mayor Dan Skoglund said. “It’s a great fit and location in our convention area.”
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Skoglund had recused himself from a September vote on the proposed project as he was running for his fourth term on the council, saying he didn’t want the matter clouded by election-season politics. He joined in the 5-0 vote Monday night in favor of the development’s design plan, parking layout and other requirements.
Amanda Norton, the city’s economic development manager, said Rancho Cordova officials agreed to the incentives because they expect the city to eventually recoup all the money. She said the development will provide needed event space while spurring additional improvements in the area.
The hotel and event center will be just off the intersection of Folsom and Sunrise boulevards, next to an existing Marriott Hotel and near a Holiday Inn and a Hyatt property. The TownePlace Suites by Marriott will have 89 rooms, and the event space will have 6,790 square feet.
It will go across the street from a light-rail station and be right off the Sunrise exit of Highway 50. It fits the city’s plan to turn the area into a “convention district.”
“It will really be an asset to have it right there,” Councilwoman Linda Budge said earlier this year. “It’s an absolute prime location.”
In September, the council voted 4-0 for the incentive package, with Skoglund abstaining.
“These are the kind of amenities our constituents expect us to get,” Councilman Donald Terry said before the vote.
Sara Lebastchi of D&S Development Inc. said construction should start next year and be complete by summer or fall of 2016. She said D&S Development has owned the property for a long time and struggled to find the right use for the property.
Developers worked with city officials in March to come up with the idea of having a town center along with the hotel, she said. The city needed more event space, and the developers needed financial assistance to make the deal work, she said.
This will be the first hotel built in Rancho Cordova since 2003, the year the city incorporated, Norton said. The city has 17 hotels.
The city will build sidewalks, drainage and other infrastructure needed for the project. The city expects to recoup the cost of the improvements in seven years through hotel tax revenue.
The city also plans to defer the collection of developer fees through a 20-year loan. The city will receive 3 percent interest for the first five years, and 4 percent for the remainder of the loan term.
Lebastchi said it’s likely that the development will be refinanced and the city paid off much sooner, within five years.
The council also agreed Monday to reduce the city’s requirements for parking spaces. Developers said they could not build the hotel and event space and still provide the minimum 229 spaces required under city ordinance. The development will use some spaces at the nearby Fire Rock restaurant but will still only have 214.