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The Hendersonville City Council on Thursday night chose a developer from Carrboro as a partner to transform the Grey Hosiery Mill into an upscale boutique hotel with 57 rooms, signaling that the city's 20-year quest for saving the historic structure could be near an end.

The proposal to cooperate on a development with Belmont Sayre is not a done deal. The council authorized City Manager John Connet and the city's UNC School of Government-based consultant to draw up an agreement over the next 90 days and present it to the council on July 6.

"We’ve been so excited," said Margie Bukowski, director of client services for WeaverCooke, the contractor for Belmont Sayre. "We've brought together a great team. Belmont Sayre is very familiar with buildings that have long histories."

Although the proposals were less ambitious than the City Council's vision — calling for a 130-room hotel with a restaurant and an event space for 200-300 guests — council members said that after years of false starts and dashed hopes they would count the project as a victory if it quickly comes to fruition.

"If we go with this recommended person, as long as they’re willing to start quicky, I think we’ve won, actually," said Councilman Steve Caraker, who admitted to being "underwhelmed" by the number and magnitude of the three proposals that were on the table.

To make the project happen, the city would sell the property for $1 million and invest $850,000 in streetscape improvements to create a well-lighted attractive corridor from Grove Street to Main Street. The city projects that total revenue from the project would reach $1.98 million — $1 million for the property sale, plus $312,000 in interest for financing the sale plus $676,500 in tax revenue.

Belmont Sayre, which redeveloped the American Tobacco Co. in Durham and is currently renovating the old Battery Park Hotel in Asheville, says it will use tax credits the state allows for redevelopment of shuttered factories. The city's consultant, Development Finance Initiative, put the total project cost at $13.5 million, with Belmont Sayre carrying the lion's share. The ratio of private investment to public money was 16 to 1, the report said, compared to six-tenths to 1 for a mixed use proposal and 7.5 to 1 for a proposal from a hotelier that would build a hotel on the mill property without using the old building.

"This is going to be an upscale hotel," Bukowski said of the idea that ultimately won. "This is not your middle level type of hotel and we know how to do that."

In response to a question from Councilman Ron Stephens, Bukowski said it's possible that the hotel could expand. A hotel market consultant advised her company to start with a modest number of rooms, given the demand in downtown Hendersonville, especially in winter.

Council members liked that Belmont Sayre would convert the old stocking factory into a hotel, even if the plans lacked the restaurant, for now, and event space. The other contenders were an Erie, Pa., company that proposed a three-story Cobblestone hotel on the mill site and Josh Leder, a Brevard developer who transformed the historic Brevard Lumber Co. into an event space.

In the end, council members liked Belmont Sayre's return on investment for the city's ante and liked the developer's pledge of quick action.

Jerry Smith said that in almost eight years on the council he would be glad to tell constituents that "we actually know what we’re going to do this time."

Caraker, a manager in construction, said speed is essential.

"If we don’t save this building quickly, it’s done,” he said.

With that, the council directed the staff to negotiate up an agreement that could turn the old mill into an asset that enhances downtown and creates a connection to the Historic Seventh Avenue District, which council members aspire to resurrect.

"OK," Mayor Barbara Volk said after the unanimous council vote. "The clock is ticking."