Groundbreaking on a downtown hotel at the Grey Hosiery Mill site could be a year away if the city can attract a private developer interested in the project.

During its Thursday night meeting, the Hendersonville City Council approved a Request for Proposals (RFP) that will go out to private developers to build a downtown hotel at the Grey Hosiery Mill property at Grove Street and Fourth Avenue.

The city is seeking a developer to build a 130-135-room, 75,000-square foot hotel that would preserve the original 1915 portion of the Grey Hosiery Mill as a restaurant and event space for 200 guests. Although a hotel is specified in the RFP, the city will entertain other commercial ventures.

Last year, the city hired the UNC School of Government’s Development Finance Initiative to conduct a feasibility study on a downtown hotel in Hendersonville. The 14-page RFP packet includes project costs, returns, hotel concepts compiled by the DFI as well as general, market and tourism information about Hendersonville and brief history on the mill.

DFI estimates total development cost at $24.7 million, including site acquisition. The bulk of the project would be funded privately by the developer. Although, the city council has agreed to a $1 million loan to help with acquisition of the property as well as street-scape improvement along Fourth Avenue from Main Street.

The mill is eligible for federal historic rehabilitation tax credits and state mill rehabilitation tax credits. The program endorsed by city council does not apply the credits, but developers are welcome to pursue them if they wish.

Based on the DFI’s analysis, the hotel would yield $1.9 million in annual net income and reach a stabilized occupancy rate of 65 percent by its third year of operation.

A conceptual drawing shows a five-story building built next to the original 1915 mill for hotel rooms. The project also includes 115-118 parking spaces on site and assumes spillover use of the county-owned lot across Fourth Avenue next to the courthouse.

In the current timeline all developer proposals are due in March and a partner will be chosen in April. Site plan review and permitting will be conducted by the end of the summer. The city is eyeing for the project to break ground in late 2017 or early 2018.

Council members Ron Stephens and Jeff Miller were not present at the meeting. Although a quorum was held with three of the five members present, the council could not vote on any ordinances without two-thirds of council members present. Four public hearings, along with other budget items, were pushed to the council’s Jan. 5 meeting.

Among those items the council could not approve was $330,000 requested in funding for the rental and operation of a temporary water pumping system at the French Broad River for a three-month period in response to the ongoing drought.