Projected cost overruns are the reason why a proposed hotel project is approaching City of Sturgeon Bay officials for more funding assistance.

Several months ago, the Sturgeon Bay Common Council approved a development agreement with Cobblestone Hotels Development that provided financial assistance towards the construction with funding coming from Tax Increment District #6. Due to higher-than-expected bids, the developer approached the city to change the agreement to account for the gap, which is approximately $210,000. The developers are asking for the same $1.2 million in incentives, but for an additional $210,000 to be paid upfront, from $600,000 to $810,000. Annual payments would then be stretched out over a longer period of time (12 months to 15 months) and for a smaller amount ($50,000 to $26,000).

City staff is recommending the new development agreement be approved, citing that it is highly likely that the new hotel will be able to generate enough tax increment to not just recover the incentives but to provide additional funding within the TID.

The Sturgeon Bay Common Council will also hear the second reading of two ordinance amendments and look to approve a resolution agreeing to reimburse Sturgeon Bay Utilities for improvements made to its wastewater treatment plant when they meet on Tuesday at 6 p.m.