The City of Sturgeon Bay Common Council has approved substantial changes to the development agreement with Cobblestone Hotels for a new four-story, 62-unit hotel on Egg Harbor Road.  The updated deal maintains approximately $1.2 million in total incentives for Cobblestone, with $810,000 paid within 30 days of occupancy and another $390,000 delivered in annual payments over 15 years.

Among the new terms, Cobblestone must acquire the property by March 31, 2026, or the agreement terminates, and the company must guarantee a minimum assessed property value of $7.5 million by January 1, 2028.  One notable feature of the revised agreement is an 18-month incentive freeze clause.  The city agrees not to offer financial incentives to any other hotel developer for 18 months following the execution of Cobblestone’s agreement.

Proponents say this exclusivity gives Cobblestone a more stable market environment, reducing the risk of an oversupply of hotel rooms that would hamper viability.

Opponents believe that financial incentives mean some of the tax revenue that the city might otherwise receive is deferred or redirected, creating risk if Cobblestone fails to meet deadlines or monetary guarantees. Some may question whether 62 new rooms will saturate the market or displace smaller lodging operators. The exclusivity clause also locks out competing hotel incentives for a period, potentially limiting competitive options.

Potential benefits for the community include job creation and economic stimulus. Construction of the hotel is anticipated to begin once property acquisition is complete, anticipated for early next year, and occupancy is expected to occur shortly after, meaning the local construction workforce may gain months of work, and upon opening the hotel will create hospitality and support jobs. The added hotel capacity may capture more visitors to the region, increasing spending in local restaurants, shops and attractions.