LEWISTON — A new downtown hotel will be a key component of the city’s rebirth, according to economic development staff.

Developers Lincoln Street Hoteliers will officially break ground Friday on a $12 million, 93-unit Hampton Inn Hotel on Lincoln Street near Main Street, across the Androscoggin River from the Hilton Garden Inn.

Crews have already fenced the property and have begun digging at the site, the former location of the R.I. Mitchell building and the Vincent Fruits building. The official groundbreaking ceremony is scheduled for 2 p.m. Friday at 15 Lincoln St.

A 3 p.m. reception is scheduled at the Hilton Garden Inn in Auburn’s Great Falls Plaza.

Lewiston Economic Development Director Lincoln Jeffers said the project means a lot for downtown development.

“Just having a quality downtown hotel is really a key component of revitalization,” Jeffers said. “People who stay at the hotel eat in local restaurants, they go to local performances, they shop at local stores and they walk on local trails in the parks or paddle on the river.”

Having a hotel has long been part of the city’s plan for the downtown. Jeffers said this development has been in the works for five years.

Councilors approved the development plan and a 10-year tax-increment finance district for the project in December 2011. The tax-incentive plan returns to developers $1 million in property taxes over the next 10 years.

“It’s really there to make the plan financially viable, returning more in the early years of the project as they are ramping up and revenues are not that high,” Jeffers said.

The property is owned by Lincoln Street Hoteliers and will be operated by Lodgesys, the company that operates the Sheraton Harborside in Portsmouth, N.H.

Portland-based Wright Ryan Construction and Archetype Architects are doing the construction, which is expected to be completed by September 2014.

“It should be up and running for the Dempsey Challenge in (October) 2014,” Jeffers said. “If things go really well, they could be up and running in time for the Balloon Festival (in August).”

Developers paid the city $500,000 for the lots, just south of Yvon’s Supersonic Car Wash.

The project is being financed by Machias Savings Bank and a U.S. Department of Agriculture loan guarantee, which gives the lender an added level of security.

Plans call for a four-story hotel. The building’s face would be right up to Lincoln Street, with parking and support between the street and the river. The bulk of the rooms would face north toward the Great Falls.

Most of the 96 parking spaces would be built on-site or on a city-owned lot between the hotel and the Androscoggin River.

The Hilton Garden Inn hotel brand and the Hampton Inn brand are chains owned and marketed by Hilton Worldwide.

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