The design for a new Fairfield Inn & Suites will involve The Ship Inn building, a former seafood restaurant.

Astoria and Hollander Hospitality are close to resolving a long-running dispute over a new waterfront hotel.

In a development agreement with the city, the Bellingham, Washington, based company would build a three-story, 60-room Fairfield Inn & Suites off Marine Drive and Second Street near the Astoria Riverwalk.

The design of the hotel would involve The Ship Inn building and would have setback elements. The hotel would have 78 parking spaces with the potential for underground parking.

The footprint would be smaller than Hollander Hospitality’s original plans to build a four-story, 66-room hotel, although the number of parking spaces would expand from 69. The new project would cover 11,000 square feet, down from 13,000 square feet.

The compromise follows a protracted regulatory and legal process that unfolded after Hollander Hospitality announced plans for the hotel in 2018. Public opposition to the project eventually led the City Council to revise the Bridge Vista section of the Riverfront Vision Plan to reduce the height and shape of new development that can block river views.

Hollander Hospitality sought an extension on the project in 2020, but the city denied the request. The company contested the denial before the state Land Use Board of Appeals, which ruled in the company’s favor, and the agency’s ruling was upheld by the Oregon Court of Appeals.

Hollander Hospitality could have pursued the previous footprint for the hotel, but offered the compromise on the condition that the project would not have to go through design or historic landmarks reviews again. The company has not detailed plans for the future of the former Stephanie’s Cabin restaurant off Marine Drive and has shown interest in developing hotels at Port of Astoria property in Uniontown.

At a work session on Monday night, city staff briefed the City Council on the terms of the development agreement.

City Councilor Elisabeth Adams showed frustration that the development agreement does not require design review. “This is a real issue, I think it’s unfortunate that we’re in this place where we have to decide things the way we do,” she said.

City Councilor Tom Hilton pointed to the new provision for underground parking, a potentially complex, expensive and uncertain undertaking along the waterfront. Years ago, digging at an old gas station uncovered century-old Chinese artifacts.

“The parking — I think that would be a greater concern to our citizens,” he said.

The development agreement will go before the City Council for consideration this Monday. If approved, the project could move quickly toward development of the new hotel.

Mayor Sean Fitzpatrick tried to set expectations for public feedback given the history of the project and the legal constraints.

Hollander Hospitality “is the one directing this. That we do not have the right to make input, or try to make changes on the plans that we have to approve,” he said. “So, in our hearing, we’re not going to be able to have people telling us that we need to reduce the footprint or reduce the height and so on.

“Again, this is just a work session, but we do have a hearing coming up. If you want a public comment on that, don’t come and tell us about what we need to change or what we need to cut down on from this plan. LUBA and the courts have already made it clear we are not in that position.”