The Duluth Town Green area is home to retail shops, restaurants, City Hall and the large Duluth Fall Festival Stage.
It will soon also be home to what officials said will be the only hotel located within the city limits, a 102-room Courtyard by Marriott. Gwinnett County development records show Augusta-based SH Duluth LLC recently filed paperwork for a commercial development permit for the hotel, which will be built at 3141 Hill St., behind the Duluth Fall Festival Stage.
The hotel will include a 344-space parking deck with some of the spaces reserved for hotel guests with the rest available for visitors to downtown Duluth.
Duluth Economic Development Director Chris McGahee said the city has been working to get a hotel in the downtown district for six years.
“We’ve been working with one particular developer and that developer has been watching our progress,” he said. “We told them we had the idea that we were going to build the restaurants and the entertainment district and that we wanted a flag hotel to be down here to support that effort with the Red Clay Theatre, events, that sort of thing.”
Construction on the hotel and parking deck is expected to begin in January, with the hotel expected to open in about May 2020. Renderings show the exterior is designed to match the architecture of other buildings around the Town Green. The hotel will be four stories tall and have 170,973 square feet of space. The site it will be built on is 1.99 acres.
In addition to the hotel putting the property back on the tax rolls, city officials see it as a way to support local businesses and events in downtown Duluth.
“It replenishes people who need to eat and also conduct business,” McGahee said. “For every one person who is staying in a hotel, they meet three or four in a business setting. So we’re kind of looking at, you know, those guys would support the restaurant district and the Red Clay Theatre.
“Also, we have a very thriving event and wedding business so (the hotel would be) responsible for 100 and something hotel rooms during the wedding season.”
The city had owned the property since 2000, but transferred ownership to the city’s Downtown Development Authority on June 19. The DDA then sold the site to SH Duluth for $250,000 on June 29, according to DDA records.
SH Duluth is a limited liability corporation that was set up by Augusta-based commercial development and real estate brokerage firm Southeastern in December to handle the development.
As part of the deal worked out between the city and Southeastern, the developer will build the parking deck as part of the hotel and then sell the public portion of the deck to the city, McGahee said. How much the city will pay for the deck depends on when the lower portion of it is ready to be used by the public, he said.
The 2019 Duluth Fall Festival will serve as the benchmark for that portion of the deck.
“(The deal is), ‘If you present that to us so that Fall Festival can use that portion of the parking by Fall Festival, we will pay you $2.5 million. Then, when you complete the project, we will pay you an additional amount of money totaling $4 million,’” McGahee said. “So we’re going to be paying (a total of up to ) $4 million for the parking deck.”
If the developer does not have the lower portion of the parking deck finished in time for the Duluth Fall Festival, the amount the city pays for that part of the deck drops to $2 million, according to McGahee.
The development permit application states the hotel will have 331 spaces, but McGahee said it is actually expected to have 344 spaces. The city will own 180 to 182 parking spaces on the lower level of the deck and 44 spaces on the second level.
“The remainder of the spaces will be reserved for the hotel, so if you’re a hotel guest, you will be assured that you have a place to park,” McGahee said.