LANCASTER, Wis. — A group of Lancaster-area hotel developers have received a $250,000 grant from the Wisconsin Economic Development Corp.

While not provided as part of a COVID-19 relief package, the state funding will nonetheless offset expected revenue losses that developers anticipate the hotel will sustain due to a decline in travel since the onset of the pandemic.

“The investors … were projecting certain occupancy levels. They can’t count on those occupancy levels when they open in March or April,” said Lancaster City Administrator David Carlson. “This grant really helps the local investors make the project work. They can break even at a lower occupancy rate.”

About 10 private investors are financing the more-than-$5 million project, which involves the construction of a Sleep Inn & Suites on a 1½-acre site at 1550 S. Madison St. along U.S. 61.

The city sold the land to the developers for $1 and will provide up to $943,250 using funds generated by property taxes from the new hotel.

The revenue will finance infrastructure improvements on the hotel property and an abutting 1-acre parcel to the northwest that also is owned by the city.

The WEDC grant was applied for and received by the City of Lancaster, but the city provides the dollars directly to the hotel developers.