Excavators, bulldozers and dumptrucks were busy Monday moving dirt on the site of Rockbridge Capital’s planned $60 million hotel on the south side of West River Street.
Workers were preparing the ground for construction after the building that previously stood at the site between Montgomery Street and Martin Luther King Jr. Boulevard was recently demolished to make way for the 173-room hotel.
Across the street to the north loomed the decommissioned power plant that developer Richard Kessler plans on renovating as part of his own $250 million hotel project along the waterfront.
Construction on both projects is now expected to begin this summer after the developers first presented their plans to the previous Savannah City Council in October 2014.
The enthusiasm they had for the projects at the time has been equally matched by the new mayor and council.
Mayor Eddie DeLoach sees the investment as a job creator and step toward redevelopment of the area.
“It ought to be great,” DeLoach said.
In the long-term, he said he would like to see more improvements made to River Street, including the removal of all vehicular traffic except the trolley. That’s further down the road, however, he said.
In the near-term, the council will have a less controversial decision to make Thursday when it considers a right-of-way work permit needed for the Rockbridge project.
Both projects are located in a state opportunity zone, which makes tax credits available to developers who pay higher wages and employ individuals from impoverished areas.
Kessler is using the tax credits to help finance the project, according to city officials. Officials with Rockbridge could not be reached for comment Monday and it is not clear if the developer is also seeking those credits.
Rockbridge is using a former city fire station at MLK as a staffing and employment office for the hotel being built across the street. Eventually, the former fire station site is expected to be developed for residential and commercial use.
As part of the hotel projects, a new city elevator and stairway will be built with city funding for improved public access to River Street and the Riverwalk via Montgomery. The improvements, in addition to the western extension of the Savannah Riverwalk, are expected to cost about $14 million.
Kessler’s Plant Riverside hotel project includes the restoration of the decommissioned power plant, as well as the construction of four new buildings to accommodate more than 400 rooms. There will be a lot of shifting of equipment when construction is underway for both hotels, said city spokesman Bret Bell.
“There is going to be a lot of coordination for the projects,” Bell said.
The city council approved a $33 million bonding agreement with Kessler at their last meeting to help the developer construct a garage for hotel guests and public use. Under the terms of the deal, Kessler would retain all the parking revenue, but he would be responsible for paying the bond debt, as well as the garage’s maintenance and operating costs. In addition, Kessler will also pay the city $100,000 per year for 30 years and then $50,000 per year for 20 years after.
The nonprofit agency that must approve the bond issue, the Downtown Savannah Authority, is expected to meet Thursday morning before the council meeting to consider the bonding.
The mayor, who chairs the authority, said he supports the deal because the project is expected to create 700 jobs that Kessler said will pay more than any other hotel in the city, in addition to generating millions of dollars in tax revenue.
Kessler said he expects construction to start in July.
Also on Thursday, the council will consider:
• A $259,167 amendment to the contract with Kimley-Horn & Associates for the design of Project DeRenne to cover the costs of additional tasks not in the original plan. The contract was originally approved by the council in 2011 for about $2.8 million. The proposed amendment, as well as previously approved increases, raises the total cost of the contract to about $3.4 million.
• A $280,985 contract for construction services from Savannah Construction & Preservation for the construction of a sidewalk on Coffee Bluff Road between Back Street and Coffee Pointe Drive, in addition to three pedestrian crosswalks with rapid flashing beacons.
IF YOU GO
WHAT: Savannah City Council.
WHEN: 2 p.m. Thursday.
WHERE: City Hall, 2 E. Bay St.
ONLINE: Watch the meeting streamed live at savannahnow.com and follow reporter @EricCurlSMN on Twitter.