LOUISVILLE, Ky. (WDRB) – A plan for a $30 million six-story boutique hotel on East Market Street in the NuLu area got a boost Thursday with the approval of $500,000 in economic development subsidies from the state.
Stephen Wendell, a principal with South Carolina-based Mountain Shore Properties, said the state’s approval of sales tax rebates on construction materials is “a big step” toward building the hotel.
Wendell said financing such a project isn’t easy. “It’s certainly even harder to do it coming out of a pandemic,” he told WDRB.
The hotel is proposed at 730 E. Market Street in the current parking lot of the Green Building. It would be the second boutique hotel in the heart of the NuLu area, after the AC Marriott Hotel that was built across the street in 2018.
Renderings filed with the city in January show the hotel branded as “Bunkhouse,” but that’s a reference to the hotel management company that will run the business, Wendell said. The brand name of the hotel is to be determined, he said.
The hotel project is a joint venture of Mountain Shore Properties and the founders of Rabbit Hole Distillery, which is just behind the hotel site on E. Jefferson Street.
Wendell said the hotel will have a restaurant on the first floor and a beverage-limited food venue on the top floor, such as a beer garden.
It will be suited to bourbon tourists and business travelers, he said.
The investors are seeking significantly more in public incentives than the sales tax rebates approved Thursday.
Wendell said they hope to be granted a tax-increment financing district for the project, just as the AC Marriott was.
The special tax district would redirect most of the new tax revenue generated by the hotel back to the investor group. The AC Marriott group received a 20-year term for its tax-increment financing district.
Meanwhile, the group is working on financing the construction of the hotel, Wendell said.
Wendell said the group hopes to start construction by the end of the year and to open the hotel in advance of the 2023 Kentucky Derby.