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Three new hotels in the works for Downtown Racine

Three new hotels in the works for Downtown Racine

RACINE — By year’s end, Racine may have not one or two — but three new Downtown hotels under construction.

All three have been announced within the past year. The hotel trio in various stages of planning and/or moving toward construction are:

  • An expansion and conversion of the former Zahn’s Department Store into an 80-room destination hotel with restaurant and rooftop bar;
  • A 171-room, full-service, branded hotel — likely a Sheraton — with convention center on the Festival Park grounds; and
  • A $40 million to $50 million combination hotel and housing project at 233 Lake Ave., to be developed by Hovde Properties of Madison. As initially envisioned, it would be a mid-level-service hotel with about 100 guest rooms.

The Zahn’s and Festival grounds projects have fully written and City Council-approved developer incentive agreements.

The Hovde project, announced in May 2019, since then has been through its due diligence phase with engineering and environmental studies completed, according to City Administrator Jim Palenick.

“They were very pleased” with the results, he said. “They got the answers they needed; they’re prepared to take it forward.”

The city and Hovde have been working toward a developer incentive agreement for that project as well, and Palenick expected that to be likely ready for public unveiling and a City Council vote this April. And he said he expected construction will likely start this year.

Some specifics about each of the hotel projects follows.

Festival Park grounds

Dallas-based Gatehouse Capital Corp. is working with the City of Racine, in a $48 million public-private partnership, to create:

  • A 171-room, full-service, branded hotel, likely a Sheraton, with 107 lake view rooms near the southeast corner of Lake Avenue and the causeway on part of the current Festival Park grounds;
  • A rooftop restaurant and observation deck/bar atop the hotel. The observation deck would be available to the public 360 days per year;
  • A separate but connected convention center with 34,950 square feet of new construction and renovation of Festival Hall’s existing 17,825 square feet of space.

As part of the project, Festival Hall is to be renovated, primarily to improve its interior appearance and acoustics.

Gatehouse expects to start site work this year and construction likely by late fall and hopes to open in spring 2022.

The convention center is based on an elaborate funding plan which requires $21 million of public investment — but without creating any property tax burden on city or county taxpayers, city officials say.

A second phase of the Gatehouse development plan is to build a second hotel of 100 rooms, five or six years later, east of the first one.

Hotel + housing

The Hovde hotel would be run by a separate owner/operator. It is envisioned to be at least a three-star hotel, fronting Lake Avenue, that would include at least a small restaurant with bar.

The 3.5-acre property — formerly owned by We Energies — was previously proposed as the site for a $46 million arena/event center with attached hotel. However, Mayor Cory Mason vetoed the plan upon taking office in late 2017.

On the same acreage parcel, Hovde also plans to build two multistory, market-rate apartment buildings totaling about 190 units. Hovde would be own and manage those apartments with onsite management.


Milwaukee-based Dominion Properties is planning this $29 million renovation and expansion of the former Zahn’s, 500 Main St., on Monument Square. The four-story building has been vacant since the department store closed in 1981.

Dominion’s plan is to construct a four-story addition in the vacant lot south of the existing building and connect it to the existing structure. The addition would double the 1925 building’s size from 40,000 square feet now to nearly 80,000 square feet.

Dominion also plans to add a fifth-story structure with a four-season rooftop bar and observation plaza.

The first floor is to include a café or restaurant that could seat about 70 to 80 people, a banquet/conference hall that would accommodate up to 180 people and that can be divided into two separate rooms, and an oversized lobby which developer Christopher Adams refers to as “Racine’s living room.”

Adams said the hotel will be a LEED, or Leadership in Energy and Environmental Design, project. Installation of a geothermal well field, for energy-efficient heating and cooling of the hotel, was expected to start in March.


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Michael "Mick" Burke covers business and the Village of Sturtevant. He is the proud father of two daughters and owner of a fantastic, although rug-chewing, German shepherd dog.

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