The University of Maine System Board of Trustees advanced a proposal Monday for a public-private partnership to renovate two vacant buildings on the flagship Orono campus into a $17.2 million boutique hotel.
The project would be funded by Radnor Property Group LLC, which is seeking to renovate Coburn and Holmes Halls and build an addition of approximately 24,800 square feet onto Holmes Hall to create an 87-bed boutique hotel.
The university plans to lease the property surrounding the two halls and the buildings to Radnor for 99 years with the property to be returned to the university after 99 years and a purchase option after 75 years. Annual rent would start at $30,000, with a 5 percent escalation every five years, and the university could collect additional income if the project exceeds financial projections.
Radnor intends to obtain historic tax credits as well as new market tax credits to help cover the costs of the investment. The university would contribute up to $1.7 million if the credits are unavailable.
Trustees voted Monday to advance planning for the proposal, though further board approvals will be required. According to materials presented to the board, construction would start in February with substantial completion by April 2023 and a projected opening in the summer of 2023.
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