The New Albany City Council is expected to take a final vote next week on approving up to $3.35 million in bonds to help rehabilitate the Elsby building.
Resch Property Group and The Sprigler Company plan to redevelop the more than century-old building on Spring Street into an 82-room hotel, with an events center and parking lot.
The bonds would contribute $2 million in revenue toward the roughly $29 million project. The developer is also adding $3.7 million, along with $14 million through loans and $6.9 million in federal and state historic tax credits, which they say are dependent on the city’s economic buy-in.
The project is expected to be finished in 2025. The architect is TowerPinkster. Plans include a restaurant on the first floor and rooftop, with a speakeasy in the basement.
Though the council approved an ordinance on the funding on first and second readings last week, some council members wanted more information and said they hadn’t been given enough time to consider it.
During a work session Tuesday, Dylan Fisher, with the Wheatley Group, presented more on the economic impact.
Fisher said the Elsby would be a competitive alternative to hotels in Louisville.
“This really gives you the opportunity to capture some of those stays … and to really promote downtown New Albany,” he said.
During the roughly two-year construction, the project would create more than 200 direct jobs leading to more than $155,000 in local income tax. The induced property tax revenue from construction would be more than $200,000 annually.
Once finished, the hotel, including restaurants and the event center, would support more than 60 jobs.
The average daily room rate would be close to the market rate in the first year at $199.33 per night, but increase by about $28 per night after two years.
Fisher said it wouldn’t compete with New Albany’s two other nearby hotels, as they're at a different price point.
Council member Josh Turner, who voted against the funding last week, said he was glad to get more information at the work session. But he still has questions, including some about hotel census data.
“I feel very good about the project. It's awesome,” he said. “But I'm not sure the risk is something we should be taking on. And there's still a lot of unknowns.”
The council also approved a resolution last week creating a Tax Increment Financing District, or TIF, for the Elsby property.
Tim Berry with Crowe LLP, an accounting and consulting firm which works with New Albany, said at the work session that there’s an agreement that the developer will make up any shortfall in TIF payments needed to meet the bond repayment.
Council member Stefanie Griffith, who voted last week against the TIF resolution and the bond ordinance, said she was glad to get more information.
“I feel like they did answer the majority of our questions,” she said. “And I appreciate all the additional education. I like how it is backed more by the developers versus the city.”
Economic Development Director Claire Johnson said the project meets goals outlined in the city’s comprehensive plan to create a downtown events center and focus on historic preservation.
The council is expected to take the final vote at its regular meeting Thursday.
This story has been updated to correct price points and the spelling of developers' names.
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