Plans for a new Second Street Southwest hotel on the former Virgil’s Auto Clinic site received final approval Monday.

While the Rochester City Council gave its final nod to the plans, developer Ebbie K. Nakhjavani said work continues to cover anticipated costs.

A request for tax-increment financing was withdrawn last week, according to Bill Von Bank, director of marketing and communications for the Destination Medical Center Economic Development Agency.

“The financing is a concern,” Nakhjavani said when Council Member Annalissa Johnson asked whether he still plans to seek tax-increment financing for the project known as Eleven02.

Earlier this year, Nakhjavani submitted a joint TIF request to Rochester and the Destination Medical Center Economic Development Agency based on a reported financing gap of nearly $6.01 million.

“We’ll be working on that after this approval,” he said of continuing efforts to reduce the funding gap.

Plans for the five-story hotel at the intersection of Second Street and 11th Avenue have seen many changes since the hotel was first proposed. Nakhjavani said revisions at the request of city officials and Kutzky Park neighbors have added to the cost of the project.

“It was a combination of all the changes that were made to the building, but at this stage I don’t have a clear answer or direction on where it will land,” Nakhjavani said.

Among concessions are raising the first-floor overhang to create an inviting pedestrian space on Second Street, widening public space on Second Street and 11th Avenue, building two levels of parking below street level so cars wouldn’t be visible from the street, and replacing a planned stucco exterior with a more-expensive alternative supported by DMC guidelines.

In approving the hotel plans, Council Member Michael Wojcik praised the developer’s willingness to work with the city and residents to develop a project that he called “a good addition to the community.”

However, he indicated a TIF request might face added skepticism.

“The community’s appetite for TIF has worn pretty thin at this point,” he said.

The proposed hotel will offer 250 rooms split between two hotel brands, Staybridge Suites, which already has an established Rochester presence, and Even Hotels, a newcomer to the state.

Staybridge provides an extended-stay option with in-room kitchenettes and other amenities, while Even provides for shorter stays with a focus on wellness and healthy living.

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Local Government Reporter

Randy is the Post Bulletin's local government reporter, covering the city of Rochester and Olmsted County, as well as Destination Medical Center efforts. He joined the Post Bulletin staff in 2014.