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3. Ninth and O hotel

A proposed 15- to 17-story building on the southeast corner of Ninth and O streets, illustrated in this rendering, will not be built. Developers involved in the project say they are working on a scaled-down project.

The large hotel development proposed for Ninth and O streets will not be going forward as planned, but one of the developers said those involved still hope a smaller project will take its place.

Developers had originally proposed a 15- to 17-story building on the southeast corner of the intersection that would have housed two hotels — a full-service Holiday Inn and a smaller Indigo boutique hotel — along with 40 to 50 condos, a ballroom, restaurants and a 263-stall parking garage. The cost was estimated at $72 million for what would have been the tallest building built in Lincoln since the 1970s.

However, "costs came in way higher than we anticipated," said John Klimpel of Lincoln Hotel Group, one of the companies that is part of the development group.

The project originally was proposed in early 2016, with construction projected to start in the spring of 2017. However, in July of last year, Klimpel said the project had run into "unforeseen developments" that were delaying the projects.

Existing buildings, including the popular bar Knickerbockers, were demolished last November, but nothing much had happened at the site since then.

In the past week, however, the site was filled in and leveled off, and on Tuesday, a crew removed concrete construction barriers.

Klimpel said the development group is in the process of redesigning the project. He said plans still call for a building with two hotels, a ballroom, a restaurant and the parking garage.

"Everything except the condos, really," he said.

However, Klimpel said he couldn't offer a timeline or scope for a redesigned project. Not only will the group have to reopen negotiations with the city, it also will have to run the revised plans by the hotel brands to get their approval, he said.

The city had approved $11.66 million in tax-increment financing for the project as well as a 2 percent occupation tax on the hotel rooms and banquet food that was projected to bring in $2.35 million.

David Landis, the city's urban development director, said the current redevelopment agreement negotiated with the developer could legally be amended, but it's more likely the process would start over when the developers are ready to come forward with another project.

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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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