A now-demolished hotel at an Interstate entryway to Lincoln will soon be redeveloped with a little help from the city, under a redevelopment approved by the Lincoln City Council on Monday.

The former Rosewood Inn — a vacant eyesore that sat vacant for about eight years until being largely demolished recently — has been the subject of many citizen complaints in recent years.

But now the council has approved an agreement to help redevelop the former hotel at 2301 N.W. 12th St., which had fallen into disrepair and had been the target of graffiti, vandalism and arson.

It is visible from Interstate 80.

Speedway Properties has owned the hotel since 2003 after buying it out of bankruptcy. Prior to Speedway’s purchase of the building, it already had been vacant for three years.

Now Speedway intends to redevelop the site into an upscale strip center with retail and office uses and a fast-food restaurant.

The council approved diverting up to $300,000 in tax increment financing into the roughly $2.2 million project, although additional development could push the total project cost higher.

TIF is an urban renewal financing tool in which the additional property taxes generated from the redevelopment are used to help pay for public improvements. In this case, the TIF money could be used to help rehabilitate the building, build sidewalks, relocate utilities and cover other costs.

Urban Development Department Director David Landis said the project will enhance a highly visible entryway to Lincoln. He said the project truly meets the “but for” test laid out in state law. In other words, “but for” the city’s contribution of TIF money, the project would not happen.

Mark Hunzeker, an attorney representing B&J Partnership, said B&J originally planned to rehabilitate the hotel, until it was stripped of plumbing, wiring and other metals.

“I can assure you that but for the availability of TIF, this project would not be going forward as it is today,” Hunzeker said.

Instead, the old hotel likely would have been converted into mini-warehouses, with storage space for RVs. After discussions with the city, B&J agreed that was not the most “attractive use” for an Interstate entryway.

Councilman John Spatz said he’s glad to see the hotel come down, saying Lincoln “desperately lacks commercial eye candy” along the Interstate to entice travelers to stop.

In other business, the council voted to request the City Audit Advisory Board audit the city’s fund account balances to make sure they’re at appropriate levels. Councilman Dan Marvin proposed the audit, in light of the recent decision by the mayor to dip into a $10 million special assessment fund that hasn’t been used much in recent years.

Councilman Doug Emery said the audit would help limit the amount of “found money” that crops up in the future, which he said undermines the city’s credibility.

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.