The Champaign City Council voted 8-0 on Tuesday to approve plans for the Parking Lot J development, at 524-6 E. Green St. and 601 S. Sixth St. Construction of the two-tower 12-story hotel and apartment complex, which will be built in the parking lot’s current location, will begin in fall 2013.

The council began the proposal in March 2012 and selected JSM Development as the developer in August.

JSM Development will pay Champaign approximately $3.9 million to purchase the land and will also share in the cost of a street reconstruction project of Healey Street, between Sixth and Fourth streets.  

“This is possible because of the kinds of partnerships we have in campustown and the reinvestment in that area that businesses have helped us with,“ said Deborah Frank Feinen, council member at-large. “(We’re) really beginning to look at that area as an urban downtown.”

Thomas Bruno, Champaign deputy mayor, said campustown’s “transformational” development, comprising both the new hotels and other projects, can be partly attributed to the city solving its flooding problems about 10 years ago.

“Flooding depressed the interest in the private sector investing and developing in campustown,” he said. “We solved the flooding in campustown, and we have been watching the significant multimillion dollar investment roll in ever since.”

He added that since the development began, campustown’s real estate has become desirable.

“The highest rents in Champaign County, residential and commercial, can be found in the campustown area,” Bruno said. “Certainly the surface parking lot has never been the best use for that valuable land, and I’m glad we can finally put a project on it.”

According to the ordinance, the construction will include a five-story parking garage below the new building. Four stories of hotel rooms will extend outward over the building that currently houses Penn Station, 605 S. Sixth St., and Flat Top Grill, 607 S. Sixth St.

The project contains 108 hotel rooms, 297 apartments and about 21,000 square feet of retail space. The parking garage will have hourly public parking spaces available.

JSM will work to provide additional parking during construction, according to Jill Guth, director of commercial leasing at JSM.

“Any time you add more residential area, the surrounding businesses will also benefit with the added customers,” Guth said.

Tony Buser, Flat Top general manager, said the building will have a very positive impact once it has been completed.

“I think it’ll bring more traffic,” Buser said. “It has to be good.”

But Brian Paragi, T.I.S store manager, said that while the new building will bring added traffic to the area once it is finished, construction would negatively impact business.

“There is an impediment from the construction and sometimes customers are drawn away from that,” said Brian Paragi, T.I.S store manager.

Champaign Mayor Don Gerard said the other two developers vying for the lot will also develop land in the campustown area.

“I’m very excited at the fact that we have a local developer that’s investing so much in our community,” Gerard said. “Thank you, JSM, for all you have done to help re-establish our campustown as a really premier location.”

Austin Keating and Earn Saenmuk contributed to this report.