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The Kindler Hotel construction

Construction crews are in the process of adding three floors to the building at 216 N. 11th St., the site of the future Kindler Hotel. Updated plans call for two floors to be added to the building next door, which houses Misty's Steakhouse.

A downtown redevelopment project has plans to get bigger.

The developers building the Kindler Hotel at 11th and P streets and redeveloping the Commercial Club building next door have proposed adding hotel rooms as well as floors.

The original redevelopment agreement called for the four-story building at 216 N. 11th St. to be remodeled and enlarged with three floors added to create the 34-room boutique hotel.

Improvements to the Commercial Club next door were to include facade upgrades, restoration of the third-floor ballroom and condo units on the fourth floor.

The updated project now includes an additional 11 hotel rooms, a fitness center and business center for the Kindler on the second floor of the Commercial Club, as well as the addition of two floors to that building.

Nick Castaneda, who along with his wife, Brooke, is developing the hotel, said an opportunity opened up when an office tenant occupying the second floor of the Commercial Club vacated the building.

Castaneda said he originally would have done more hotel rooms but didn't have any more space until the second floor of the Commercial Club opened up.

"The demand has really been there," he said.

The project cost would grow from less than $12 million, including about $1.6 million in tax-increment financing, to about $19 million, including nearly $2.6 million in TIF.

A big chunk of that TIF would be used to help the Castanedas buy the second-floor space from its owners for $775,000.

That gave several City Council members pause during a public hearing Monday.

Councilman Jon Camp questioned whether that arrangement is in line with the purpose of TIF.

"It's like the left hand buying from the right hand," Camp said.

However, Urban Development Director David Landis defended the arrangement, noting that the two properties are owned by separate entities.

Actually, two different entities own different parts of the Commercial Club. Lincoln Commercial Club LLC, with managers Robert H. Campbell II, William D. Scott and David M. Schmidt, owns the first two floors, while the top two floors are owned by Commercial Club Enterprises LLC, with Donald Miller Campbell listed as manager.

"This is site acquisition like any site acquisition," Landis said earlier this week in an interview.

While the additional TIF would help the Castanedas buy the extra floor to expand the hotel, it would not be used to pay for the construction of the additional floors on the Commercial Club building.

Those two floors would be developed by Commercial Club Enterprises LLC into a private residence for Donald Campbell, in a project with an estimated cost of $1.5 million.

The first floor of the building, which houses Misty's Steakhouse, would continue to be owned by Lincoln Commercial Club LLC.

Castaneda had hoped to have the Kindler open in time for Husker football season, but construction delays as well as the proposed expansion of the project will likely push the opening back to early next year, he said.

The City Council is scheduled to vote on the expanded project Monday.

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Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business editor/reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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