LaGRANGE — City leaders have reached an agreement that will begin laying the groundwork for the construction of a downtown hotel. City Council approved a memorandum of understanding for the deal during a meeting Tuesday.

“The memorandum of understanding has been executed by the developer out of Carrollton, as well as the Downtown LaGrange Development Authority and the City Council,” said City Manager Tom Hall. “This is, basically, all parties reaching an understanding.”

The developer, Paramount Acquisitions, is based in Carrollton. The company is the development arm of RA-LIN and Associates, a construction company also based in Carrollton. The company is already handling another downtown hotel project in Carrollton, which is nearing completion.

“The developer group from Carrollton that has entered into an agreement with the downtown authority has built and recently opened a Courtyard by Marriott in Carrollton,” said Mayor Jim Thornton. “They seem to be very bullish on the prospects for a similar hotel in LaGrange.”

The hotel is set to be constructed on the site of the Mansour’s building in downtown LaGrange. The site will be adjacent to a parking deck, which will be donated by the Callaway Foundation.

“This has been a long process and we are very happy to see that it is moving forward,” said Speer Burdette, president of the Callaway Foundation. “The downtown hotel is very critical for our downtown area, especially with the construction of Sweetland Amphitheater (at Boyd Park).”

The city is being asked to donate the property to the DLDA, as well as $300,000 to the demolition costs. In return, the city will have a $4 million public access parking deck that will have approximately 200 spaces. Taxes from the hotel are projected to provide the city with about $500,000 in revenue over the next 20 years, Hall said. The agreement also states that the hotel will hire about 30 employees.

“The DLDA and city staff will be involved in the final architecture and design for the hotel over the next few months,” said Thornton. “The deal would not be possible without the generosity of the Callaway Foundation, which has committed $4 million to build a city owned and publicly available parking deck.”

Hall said that the hotel will likely be a Courtyard-Marriott. The memorandum states that it will have 100 rooms and will be designed in keeping with the downtown square architecture in mind.

Hall said that the next step in the process is for the city’s attorney, Jeff Todd, to begin working with lawyers to draft intergovernmental agreements. He expects that process to be completed within 60 to 90 days, and demolition is expected to begin before the end of the year.