DURHAM — A $5.7 million incentive for turning the 17-story Hill Building into a luxury hotel and art museum won unanimous approval from the city council Monday.
“This is a terrific project. It is the heart of downtown and it’s a wonderful spot for this. It can be transformative,” said Councilman Steve Schewel.
Mayor Bill Bell said previous downtown projects that have proven successful, such as the American Tobacco renovation and the Durham Performing Arts Center, suggesting the hotel can be a similar boost for the city.
Any payment is contingent on 21c Museum Hotels beginning construction by June 30, 2013, and opening within two years. The incentive is payable in twice-yearly installments, provided the operation meets occupancy-tax and sales-tax collection targets over a 20-year term.
“It does make sense,” said city Economic Development Director Kevin Dick. “The project will bring more visitors and business people downtown, it helps the tax base.”
The city estimates the hotel will generate $10.4 million in sales, occupancy and property tax revenue over the 20 years. The 21c company plans 120 hotel rooms, a restaurant and museum in the building, with rates starting about $195 a night.
“There is demand in Durham for luxury hotel rooms,” said Shelley Green, chief executive of the Durham Convention and Visitors Bureau. “There’s definitely more demand for rooms downtown.”
The 21c company was founded in 2006 by two Kentucky arts patrons, Jack Daniels heiress Laura Lee Brown and her husband, Steve Wilson.