Updated Thursday, May 15 at 10:13 a.m.

Pflugerville city leaders approved a package of financial incentives on May 13 to land a future Courtyard Marriott hotel and conference center for the city.

The hotel will be located on the southwestern corner of Pecan Street and SH 130 in 130 Commerce Center, a new commercial development currently under construction. Construction on the hotel is expected to begin before 2015 and finish in the spring or summer of 2016.

The location of the future hotel is yet another indicator of strong growth in the area. It will sit within a few hundred yards of Pflugerville's first hotel, a Best Western Plus slated to open in mid-2015.

"The city has entered an agreement to bring Pflugerville a conference center that will attract business meetings, special events, jobs and hotel/motel tax revenue," Mayor Jeff Coleman said in a statement.

At a discounted rate of $2.50 per square foot, a hotel investment group called Village Pflugerville Holdings, LLC will buy 6.5 acres of land from the Pflugerville Community Development Corporation for $700,000.

"It's the first-of-its-kind conference center in Pflugerville," said Amy Madison, assistant executive director of the PCDC.

The anticipated 142-room hotel will cost $20 million and come with 20,000 square feet of conference space, enough for a 1,000-person reception. The hotel will also feature a full-service restaurant, fitness center, bar and pool, said Paul Barham, CEO of Harrell Hospitality Group, the part-owner and operator of the hotel.

"It is not, as they say, your grandfather's Courtyard [Marriott]. We are bringing something special to the city," Barham said. "It is going to attract particularly the Gen-X, Gen-Y travelers as they are the traveling public of the future."

City council members unanimously approved financial incentives for the project and seemed excited by Barham's visual presentation depicting a sleek bar and lobby and a canopied poolside area.

A package of incentives

The city of Pflugerville will waive all city-mandated building, water and electrical connection fees, according to a news release.

The city will also refund the hotel's occupancy tax and pay Village Holdings 75 percent of whatever hotel occupancy taxes are collected in the future from the next four hotels built in Pflugerville. All hotel occupancy tax rebates received by Village Holdings, including its own and those from other future hotels, will be capped at a total of $625,000 per fiscal year.

The agreement is meant to cover expenses for furniture and equipment in the conference center. Madison said the arrangement makes sense given that conferences at the Marriott could attract more people than the hotel can accommodate. The other hotels would benefit from overflow customers, she said.

Pflugerville will also pay Village Holdings 100 percent of the ad valorem tax collected from the project for 15 years. After that, the incentive will be lowered by 15 percent each year to a floor of 25 percent, where it will remain for 10 years.

Up to a maximum of $50,000 the city will also rebate 50 percent of the actual project sales tax (the one-cent, city sales tax levied on certain stores, businesses and restaurants) for 15 years.

Editor's note: This story has been updated to clarify the hotel occupancy tax rebate incentive.