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Feb. 12--A 96-room hotel is planned for the former Commerce Center building in downtown Birmingham.

Birmingham-based hotel developer Rhaglan Hospitality LLC is seeking assistance from the city of Birmingham in obtaining a loan of up to $2.5 million for a term up to 20 years from the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) Section 108 Loan Guarantee Program.

The loan would provide partial financing for real property acquisition and pre-construction costs associated with the former Protective Life Company building, or Commerce Center, at 2027 First Avenue North.

The budget and finance committee of the Birmingham City Council on Monday approved the request. The matter will go before the Birmingham City Council on Tuesday, Feb. 20.

The Section 108 Loan Guarantee Program provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and other physical development projects.

Rhaglan CEO Jim Lewis said the hotel will be similar to the Redmont Hotel, which his company redeveloped in 2016. The Redmont is a Curio Collection by Hilton hotel.

"We are very excited," he said, adding the hotel could have room for retail space and a restaurant.

"We are in discussions with several hotel companies," Lewis added.

Lewis said the building is in "exemplary" condition for being empty for at least 10 years.

When asked why he wanted to redevelop the building into a hotel, he said the project was a natural next step from Redmont.

JK Commerce LLC, which has the same address as Rhaglan Hospitality, bought the 14-story Commerce Center at the corner of 1st Avenue North and Richard Arrington Boulevard, for $2.8 million in November 2017, public records show.

The building was once home to Protective Life and later the Birmingham Chamber of Commerce. The 71,000-square-foot building dates back to the 1920s.

Brown Marx

The Brown Marx Building -- the last empty building in the "heaviest corner on Earth" -- may also be developed into a hotel.

Tupelo Hotels 1031 Acquisition II LLC purchased the Brown-Marx building at the corner of 1st Avenue North and 20th Street North in downtown Birmingham from Hughes Capital Partners late last year for $3.7 million, public records show. The company also bought the Allright Parking Deck at 1901 First Ave. N. for $1.6 million.

According to information from the city of Birmingham, the purchaser plans to develop the property as a hotel.

Tupelo Hotels 1031 Acquisition II LLC shares the same address as Ascent Hospitality, which developed the Elyton Hotel in the adjacent historic Empire Building. Ascent is also developing a limited service Marriott hotel with 120 rooms in the former Alagasco headquarters building.

A marketing representative for Ascent Hospitality didn't respond to multiple requests for comment on the Brown Marx project.

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