Resolution accepting and authorizing the City Manager to execute a Contamination Cleanup Grant Agreement for 101 East Main Street, 121 East Main Street and 118 South 2nd Street (Hotel Mankato).

Adoption of the attached resolution.

On October 28, 2024, the City Council approved the submission of a Cleanup Grant application to the Minnesota Department of Employment and Economic Development (DEED) for the Hotel Mankato project. In December 2024, DEED notified the City of a grant award for the project.
 
Hotel Mankato was awarded a $323,887.00 cleanup grant. Hotel Mankato, LLC proposes redeveloping the property at 101 East Main Street, 121 East Main Street, and 118 South 2nd Street by demolishing two vacant buildings and constructing two adjoining hotels totaling approximately 250,000 square feet with a total of 282 hotel guest rooms, a rooftop restaurant including an outdoor patio, 168-stall underground parking garage and nine surface parking stalls. At the intersection of Riverfront Drive and Main Street, a four-story extended stay Element by Westin is proposed which will include 126 all-suite guest rooms. At the intersection of Second and Main Street, a 10-story AC by Marriott is proposed with 156 hotel guest rooms. The two hotels would be adjoined by a common lobby with a direct connection to the existing City skywalk, providing hotel guests with direct access to the Civic Center.
 
The hotels will share common guest amenities, including a pool, fitness center, guest laundry, lounge spaces, business pods, and a conference room. A courtyard area will be provided between the Element and common lobby with grilling stations, fire pits, and an outdoor social lounge area.
 
The grant eligible costs include investigation (match only); contaminated soil excavation, transportation and disposal; and environmental oversight and reporting. The matching funds of $168,290 have been committed and will be paid by the developer, Hotel Mankato, LLC. DEED contamination cleanup grants require at least 12% of the match to come from an unrestricted source. The project’s tax incrementing financing for redevelopment is considered a restricted source. A portion of the match for the grant will be reimbursed to the developer with increment that is generated from the redevelopment.