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RACINE, WI — After looking at the legal challenges of building a hotel and convention center on land originally reclaimed from Lake Michigan, city officials and a developer unveiled revised plans for the proposed $48 million project.

Racine Mayor Cory Mason was joined by Gatehouse Capital developer David Rachie, State Representatives Bob Wittke and Tip McGuire, and members of the Racine Common Council to unveil a complete redesign and location change for a hotel and expanded convention center at the City’s Festival Hall.

Together, the city and Gateway Capital figured out that it was better to opt for an alternative development plan which takes all private development entirely out of the historically-identified lakebed area and moves it the development to the corner of Lake Ave and KipiKawi Causeway. The original plan had been to build the project on the south end of the grounds where a parking lot currently sits.

Lakebed grants were passed by state legislators at various points of the 20th century. The grants pertained to land that was previously submerged along the shoreline of Lake Michigan, reclaimed and converted into dry land. The lakebed grants gave the state the power to specify how the land would be used, typically setting rules that the land was to be used for public purposes.

First-Class Hotel Planned

The $48 million project includes a hotel with 171 rooms and an expansion of 34,950 square feet of convention space. The City will fund the $21 million cost of the new convention center, while the Developer, Gatehouse Capital, will fund the expected $27.5 million cost of the hotel.

“I have said repeatedly that I want Racine to be the community of choice in Southeastern Wisconsin, not only for people to live and work but for people to visit and convene. Doubling the usable convention space at Festival Hall and pairing that with high quality, full-service hotel with amazing lakefront views will be a game-changer for the City,” said Mayor Cory Mason.

The redesigned development, pending approval from the Common Council, consists of a 171-room, full- service, branded hotel, with a roof-top restaurant and bar, 4 seasons observation-deck, located on the lands making up a portion of the Festival Hall grounds and integrally linked to a 52,775 gross square-foot Convention Center. The hotel will be developed and owned by a single-purpose, limited liability corporation and subject to property taxes and Wisconsin Room tax.

The expanded and reconstructed Festival Hall-Convention Center would be financed and owned by the City of Racine and leased to the hotel developer/operator under the terms of a negotiated management agreement. It will be managed as an integrated facility with a hotel and restaurant.

In addition, Memorial Hall will also be managed by Gatehouse without operational charge, but Paul P. Harris Rotary Park would remain owned by the City and separate from this arrangement.

The land on which the new hotel is to be constructed which consists of approximately 46,350 sq. ft. of current Festival Hall grounds, the 441 Lake Avenue parking structure, the former Johnson Financial drive-through property; as well as a second parcel set aside for a “Phase II Hotel”, which will be sold/transferred to the hotel developer for $1.

The City-owned and expanded Convention Center will be leased to the hotel developer at a lease rate of $279,000/year adjusted prospectively for inflation. The integrated facility will also feature a rooftop observation deck available to the general public 360 days a year.

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