The Sturgeon Bay Common Council approved a new development agreement on Nov. 4 with Cobblestone Hotels, similar to the terms of a previous agreement with the hotel chain that was never implemented.

One big difference is a provision that the city won’t offer incentives to any other hotel developer for 18 months after the agreement with Cobblestone Hotels is executed.

Anna Jakubek, vice president of development for Cobblestone Hotels, said the company sought the exclusivity clause because having another hotel open at the same time in Sturgeon Bay would result in the project not being financially feasible.

A developer for Hampton Inn has inquired about building a four-story, 81-unit hotel where Cobblestone Hotels originally wanted to locate in Sturgeon Bay. Though that developer expressed an interest in receiving financial incentives from the city, no agreement has been reached to do so.

City Administrator Josh Van Lieshout said approval of the development agreement with Cobblestone Hotels wouldn’t prevent another hotel from being established in the city during the following 18 months, but it wouldn’t receive any incentive money to locate in Sturgeon Bay.

Cobblestone Hotels intends to build a four-story, 62-unit hotel at 1026 Egg Harbor Road, in Tax Incremental District (TID) #6. The site is located across the street from where the company originally planned to build, at the southeast corner of Egg Harbor Road and North 12th Avenue. 

The latest agreement approved by the council calls for Cobblestone Hotels to still receive a total of $1.2 million in financial incentives, $810,000 within 30 days of an occupancy permit being issued to the hotel, and $390,000 in annual payments of $26,000 over 15 years. 

Along with requiring the company to “take all necessary steps to create and obtain ownership of the property on or before March 31, 2026,” or the agreement would automatically terminate, Cobblestone Hotels would also have to guarantee a minimum assessed value of $7.5 million as of Jan. 1, 2028.

Financial projections from R.W. Baird, the city’s financial consultant, currently estimate that Cobblestone Hotels’ project would result in a positive balance of around $141,761 when TID #6 would close in 2043.Cobblestone Hotels entered into a development agreement with the city in 2023 for the original site, but that agreement became null and void after the company never finalized purchasing the property from the owners of the Door County Boardwalk development.