LEWISTON – Winston Hospitality, the development group behind Island Point’s Courtyard hotel, is taking on a much bigger role as it prepares to commit $26 million to the riverside project.

The North Carolina-based company’s intentions are outlined in a joint development agreement with the city that goes before the City Council on Tuesday. In the agreement, Winston is prepared to spend $16 million on the hotel, $6 million on housing within the Cowan mill, and $1.6 million to transform the Central Maine Power substation into a retail/restaurant complex. Winston would also build and operate a $3 million private, 200-space garage on the site.

Previously, the company had only agreed to build the hotel.

‘Better for city’

“This couldn’t be better for the city,” said Travis Soule, the local developer who created the vision for Island Point four years ago. Since then, Soule and his company, Solo Properties, have been unsuccessful in securing financing to get the project off the ground. Soule’s joint development agreement with the city expired last year.

“I’ve put my heart and soul into this project; I couldn’t be happier,” he said.

Under this new agreement with Winston, the city agrees to extend utilities along Mill Street and generally clean up and improve the Island Point area, with its costs capped at $1.5 million. Additionally there are two Tax Increment Financing arrangements pegged to the deal.

The first is based on the requirement that Winston builds the hotel and garage and redevelops the Cowan. In that scenario, a TIF would return $3.2 million in debt service development costs to Winston over a 20-year period.

The second TIF would return 100 percent of the garage’s property tax to Winston, to offset its operating costs of the garage for 20 years. Taxes are estimated at $60,000 annually; operating costs at $130,000.

The agreement also calls for Winston to pay the city $1 million for the land the hotel is built on in year five of the agreement.

“We think this is a good proposal to bring before the City Council,” said Lincoln Jeffers, the city’s economic development chief. As written, the agreement leverages $5 of private money for every $1 of public money.

Soule said he is negotiating his future role in Island Point’s development. He still holds options on the Cowan mill and has invested thousands of dollars in site preparation.

Last summer he brought in Greystone and Co., a New York development group that considered financing the project. But Soule said that company wouldn’t commit to the project as a whole.

“This is not a piecemeal deal,” he said of the mixed-use project.

Jeffers said the city couldn’t reach an agreement on the numbers with Greystone, which bowed out of the project last summer.

Soule said he initially contacted Winston Hospitality about the time his deal with Greystone was unraveling. He complimented Winston for having an entrepreneurial spirit and the vision to see a project like Island Point through to its end.

“They’re not a cookie-cutter, institutional-type group,” he said. “They’re not going to put up a prefab hotel and call it a day. They have much larger scope and vision.”

Winston has already secured the franchise rights to build the Marriott Courtyard at Island Point. Two other area hotel projects are under way: a Marriott Residence Inn is under construction near the Auburn Mall, and that city’s Planning Board just approved a plan to build a Hampton Inn in Great Falls Plaza. The Hampton Inn franchise agreement has not yet been approved.