AUBURN – A second Great Falls Plaza hotel development should spur a 300-space parking garage, according to city staffers.

Councilors approved, 4-3, a deal with the Mullaney Hospitality Group of Sayville, N.Y., that will allow them to proceed with a hotel development.

The new hotel would be built on the northeastern corner of Turner Street and Great Falls Plaza, across from the Platz office building, the YMCA and the Auburn Novelties building.

“We are confident this will create the opportunity to build the garage, now,” said Acting City Manager Laurie Smith.

According to the agreement, the city would lease 110 parking spaces to the developers for a monthly rate of $30 per space, plus yearly increases based on inflation. It’s similar to a deal between the city and Riverwatch LLC, developers of the Hilton Garden Inn in 2001. The city currently provides 170 spaces for the Hilton in Great Falls Plaza.

The city has been planning the parking garage in the plaza since the Hilton was completed, but has never approved a design or even an exact site for the project. Riverwatch’s Lee Griswold spoke against the new deal, saying the city should concentrate on building the garage or attracting office buildings in the plaza first.

“An office building would be a generator for other things, like bistros or restaurants or bars,” he said. Griswold said that a lack of things to do downtown is the chief complaint he hears from his customers.

“They say that there is very little to bring them downtown, other than my place,” he said. He expects a second hotel nearby would make matters worse.

“I don’t think they’ll bring new customers,” he said. “I think they’ll only split my clientele.”

Other residents spoke against the deal, as well. Brian Demers, of 1085 Riverside Dr., and Jonathan LaBonte, of 41 Third St., both urged councilors to charge a higher fee for each parking space.

“I’m concerned that taxpayers will end up subsidizing the cost of the garage, with a lease rate this low,” Demers said.

But others saw the new development as an opportunity. It could mean an additional $12 million in property values, according to Chip Morrison, president of the Androscoggin Chamber of Commerce.

“That would pay the property taxes from 70 to 80 homes, but the hotel won’t be sending any kids to school,” Morrison said.

Two other developers, Winston Hotels and Ocean Properties, hope to build hotels in Lewiston-Auburn. Both are vying to win a Marriott Courtyard franchise.

Winston hopes to build its Marriott in Lewiston’s Island Point development, just off Main Street below the Great Falls. Ocean Properties hopes to build its Marriott in the Auburn Mall area. Both developers are expecting the Marriott Corp. to announce which site will get the development this week.