LEWISTON – A new deal to develop Lewiston’s western gateway is different, councilors said Tuesday.

Councilors unanimously approved an agreement with Winston Hospitality Group to take over work on the Island Point project. The deal gives new life to the redevelopment of the Cowan Mill and surroundings, across Main Street from Bates Mill Building No. 5 and at the foot of the Great Falls. The site was also home to the Libbey Mill until it was demolished last year.

“I’ve been a skeptic about development deals the city has done in the past,” City Councilor Robert Reed said. “But I love this deal.”

According to the deal, the city will do $1.5 million worth of utility work along Mill Street leading up to the Island Point development and could create two Tax Incentive Finance Districts returning $4.5 million to developers over the next 20 years.

Developer Winston Hotel group will build a 120-room Marriott Courtyard hotel and a private parking garage and could redevelop the vacant Cowan Mill building for an added retail and residence space, according to the agreement.

In all, developers are considering $26 million worth of investment, about $5 of private investment to every city dollar spent.

“But this is not just about the money or the building,” Ward 1 Councilor Tom Peters said. “It’s about the vision and where are we going as a city and if we can find developers that will help us with that vision. And I think we have found that mix.”

Solo Properties and developer Travis Soule unveiled the Island Point project in 2005. Soule wasn’t able to secure financing, however, and his development agreement with the city expired last year.

Winston won the franchise rights to build a Marriott Courtyard hotel as part of the Island Point development last fall. The hotel is planned to replace the parking lot north of Veterans Park. Chief Executive Officer Bob Winston said Tuesday he was impressed with Lewiston and the way the project is being received locally.

“There’s a lot of heavy lifting to be done, but it’s at the top of our list of things to get done,” Winston said. “We’re hoping we can produce the kind of product and the kind of project you can all be proud of.”

Winston agrees to spend $16 million on the hotel. Winston would also build and operate a $3 million private, 200-space garage on the site. Winston will also pay the city $1 million for the land the hotel is built on in the fifth year of the agreement.

The company is still investigating spending another $6 million on housing within the Cowan mill, and $1.6 million to transform the Central Maine Power substation into a retail complex.

“If you are old enough to remember, you will see quite a transformation of that area,” Peters said. “We will all benefit. It will trigger some more development in that area.”

Parking

The city rewrote its development incentives playbook when it negotiated a new Western Gateway hotel package, City Administrator Jim Bennett said. The big difference has to do with parking. Instead of building a garage, the city would create a TIF to refund all property taxes paid on the garage, about $60,000 per year.

“In past developments, we have provided the parking garages,” Bennett said. In spite of parking fees and revenues, those tend to cost the city money.

“If we built the garage, we wouldn’t get any tax revenue from it anyway,” Bennett said. “This way, we don’t have to pay the money to build a new structure. In the long run and the short run, the city is in better shape than if it had to build it all. It’s a monumental shift in the way we’ve partnered on these projects in the past.”

Another TIF deal begins once 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.