MARSHALL — Marshall City Council members heard details this week of a proposal to build an 84-room Hampton Inn near the Red Baron Arena and Expo. Northfield-based development firm Rebound Partners is requesting a commercial tax abatement and business subsidy for the roughly $16.1 million project.

“Our goal is to hopefully start construction yet this fall,” said Scott Koester, of Rebound Partners.

After hearing a presentation from Rebound Partners, council members voted to call for a public hearing on the proposed tax abatement and subsidy.

Marshall EDA Director Lauren Deutz said Marshall has tried to work with different developers to build a new hotel since about 2013. According to a study updated in 2023, Marshall could support an additional 60 to 70-room hotel, she said.

“Building a Hampton Inn next to the arena presents a strategic opportunity to meet our growing hospitality needs, and capitalize on the area’s expanding event and tourism sectors,” Deutz said.

After talking with some of Marshall’s major employers, as well as event venues and sports organizations, there was “a clear consensus” that Marshall lacked the quantity and quality of rooms needed to support lodging demand, Deutz said.

“Marshall has a very strong weekday and weekend market” for hotel lodging, Koester said.

Koester said Rebound had spent some time discussing what kind of hotel to bring to Marshall, and had gotten a positive response from Hilton, the parent company of Hampton Inn.

“They like Marshall, and really feel that a Hampton Inn here in town would be a good fit,” he said.

Koester said Rebound initially reached out to Marshall community members about starting an investment fund in 2020. In 2022, Rebound acquired two parcels of land next to the Red Baron Arena, and they began raising capital in 2024.

Total development costs for the project were about $16.15 million, Koester said. Funding for the hotel project would come from several sources.

“We are raising $3.35 million, that’s going to be the private equity that our development team is working on right now,” he said. Rebound Partners were also planning on $1 million in subordinated debt. “We’re talking to Runnings, SMSU, CJ Schwan’s about participating in that,” he said.

“We’ve been talking with the city about a forgivable loan of $500,000, and we’re also looking at some additional funding with some other not-for-profit organizations that can provide some low-interest financing.”

Koester said Rebound Partners were seeking a 10-year city tax abatement, and a 10-year tax abatement from Lyon County.

“It’s going to help us bridge the financing gap, and ensure project feasibility,” he said.

City council members voted to call for a public hearing on the proposal and the city tax abatement and subsidy requests.