A Minnesota-based development group plans to build a four-story, 76-room hotel in the Johnston Town Center, a $100 million development underway at Merle Hay Road and Northwest 62nd Avenue.

The GrandStay Hotel will be the third commercial project in the Town Center, an 18-acre area that city officials envision becoming a commercial-based destination for residents and others. Two commercial buildings, whose construction is nearing completion, anchor the development. Also in the Town Center is a new City Hall, a splash pad that converts to an ice rink in the winter, and about 1 acre of green space called the Yard. Other commercial and office projects are planned in the area.

“I think [the hotel] looks great and like how it ties in with everything else that’s happening in the Town Center,” Johnston City Council member Tom Cope said during Monday’s council meeting. (To see the Johnston Town Center master plan, click here.)

The council on Monday approved selling city-owned property at 6215 Merle Hay Road to Douglas A. Carlson Development Inc. and Johnston Hospitality LLC for $183,400.

The council also approved a development agreement that requires construction of the hotel to be underway by March 1, 2023, and completed by Oct. 31, 2023. The agreement also requires the hotel owner to contribute $1,000 a month for three years to a fund that pays for operations and maintenance of the Town Center’s common spaces.

In addition, the city will pay the developer up to $1.4 million in tax increment financing over nine years beginning in June 2026, according to the development agreement.

When completed, the hotel is expected to have an assessed value of between $6 million and $7 million.

The hotel project is Douglas A. Carlson Development Inc.’s first project in the Des Moines area. The company, which started in 1995, is located in Cold Spring, Minn., and has mostly been involved with the development of multifamily and senior living facilities. The group is currently building a hotel in Algona, Tony Dingmann, the company’s vice president and senior project manager, told the council.

The Johnston hotel, with a footprint of 12,800 square feet, will include some extended-stay rooms, an indoor swimming pool, a breakfast bar, a conference room and an outdoor patio.

GrandStay Hospitality is a hotel franchisor based in the Minneapolis-St. Paul area and has 30 properties in eight states, including three in Iowa. GrandStay Hotels are located in Ames, Pella and Rock Valley. Dingmann told the council a private operator will manage the Johnston property.