A plan in the works for the past two years to build a hotel in downtown Woodstock has fallen through, with the mayor saying it is “not the outcome we hoped for,” due to financing issues.
The City of Woodstock announced Friday it will terminate a redevelopment agreement with Kebb CS-WK, LLC for a proposed downtown hotel project at Calhoun Street and Jefferson Street after the developer was unable to secure the financing necessary to move the project forward.
The termination will be subject to city council approval on Tuesday.
The city said it has worked collaboratively over the past months with the developer through multiple amendments to the original redevelopment agreement, providing additional time and flexibility to advance the project.
“Despite those efforts, the financing requirements outlined in the agreement could not be met. While the project will not move forward under the existing agreement, City officials expressed appreciation for the developer’s partnership and good-faith efforts throughout the process,” the city said in a statement.
The Woodstock City Council in August 2024 approved the redevelopment agreement with the developer to build a Wisconsin-based Cobblestone Hotels hotel, which was proposed to have 60 guest rooms, a guest laundry, an indoor pool, a fitness center and a conference boardroom.
The hotel was also proposed to have a breakfast room and outdoor patio that would have doubled as the evening dining room for the Wissota Chophouse.
The $12.5 million hotel was approved with $2 million in tax increment financing as an incentive.
City officials say they have continued investing in the surrounding area since the original proposal through the acquisition of adjacent properties, creating a larger and more cohesive redevelopment site at Calhoun Street and Jefferson Street.
The city council at its next meeting will also consider acquiring the former lumber yard property at 200 East Judd Street to expand the city’s investment.
Woodstock Mayor Michael Turner said the city remains optimistic about the site’s future.
“This is not the outcome we hoped for, but it is the right decision for the City at this point,” Turner said.
“We worked in good faith to give this project every reasonable opportunity to move forward. Redevelopment projects are complex, particularly in today’s financing environment, and we remain committed to partnering with developers on projects that strengthen our community. At the same time, we have a responsibility to protect the public interest and ensure this important downtown site is positioned for the strongest possible future,” Turner said.
Woodstock will move forward with the demolition of the existing structure as the next step in preparing the property for redevelopment.
City staff will work with the city council to evaluate redevelopment opportunities, including renewed developer outreach, consideration of alternative development concepts and coordination with broader downtown planning efforts.
“We are committed to exploring every opportunity to bring meaningful redevelopment to this site,” Woodstock Economic Development Director Jessica Erickson said.
“A downtown hotel remains an important community goal, but the expanded property also creates opportunities to consider a broader range of development. By looking at the full assembly of properties rather than a single parcel, we have the ability to think bigger, be more intentional, and pursue a project that delivers lasting value for residents, businesses, and visitors,” Erickson said.
City officials say they believe the property is well-positioned to attract a high-quality project that will serve for decades to come now that the expanded redevelopment site is under city control.