Fayetteville will pay up to $1.5 million to the developers of the Prince Charles project downtown for the new parking deck being built on Hay Street next to Segra Stadium.

The City Council voted 9-0, with Council member Kathy Jensen absent, on Monday to pay the additional money at the request of Hay Street Development Pad LLC. The contract was originally for $14.5 million. Jordan Jones of Hay Street Development has previously said the construction costs have increased since the initial estimates.

In discussion on Monday, council members said the garage is literally and figuratively a foundation for an economic engine for downtown and the city. The five-story parking deck is to be the base of a 12-story structure. The upper seven floors will have an office building and a Hyatt Hotel.

It’s part of a larger project that is converting the old Prince Charles Hotel into apartments, that built Segra Stadium for the Fayetteville Woodpeckers Minor League baseball team and includes the sale of the Festival Park Plaza office building from the city to the Prince Charles developers.

A slide presented at the meeting says the redevelopment on and near Hay Street is expected to produce 1,006 jobs and $126 million in economic activity when it’s done.

Some details of the new parking deck deal:

• The city will pay at least $1 million in addition to the $14.5 million of the prior version of the contract.

• The city could pay as much as $500,000 more, provided that Hay Street Development also pays more. The deal calls for the city to match additional spending by Hay Street Development up to $500,000.

• The office building, the hotel and the old Prince Charles Hotel apartment building, and Festival Park Plaza are to pay taxes to the city as if they are worth at least $45 million in total, even if they are appraised at less value. The previous version of the contract set the total at $37 million.

Staff writer Paul Woolverton can be reached at pwoolverton@fayobserver.com and 910-486-3512.