KALAMA — In a big step for the McMenamins project, Port of Kalama commissioners Wednesday approved an amended lease with the hospitality company and awarded a $6.8 million contract to JH Kelly to build the shell of its restaurant and hotel.

The Longview-based contractor is expected to start construction of the above-ground work within 60 days, according to the port. The groundwork already is complete.

The project had stalled briefly after estimated construction costs were higher than anticipated, forcing the port and McMenamins back to the bargaining table on a portion of the lease that set a cap on construction costs.

Under the lease, the port will hire Kelly to build the shell of the hotel. McMenamins will spend an estimated $3 million on the final touches and design. Between the port’s and the company’s initial investments, the final price tag could be between $9 million to $10 million.

While the port will pay up front for the building shell, McMenamins will gradually pay the port back over time through its lease. As result of the recent lease negotiations, the port has agreed not to raise McMenamins’ rent. Instead the port essentially will wait longer to recover its costs.