A new six-story Marriott Moxy hotel is planned to replace the longtime Diner at the corner of 12th and Harney Streets in the Old Market.

The family-owned Hawkeye Hotels based in Coralville, Iowa, hopes to start construction yet this year if all approvals go as hoped for the $15.1 million project poised to bring 105 more hotel rooms to the area.

Planning Director Dave Fanslau described the 409 S. 12th St. site as underutilized in its current form. He points to the downtown master plan’s call for “urban densities,” generally meaning multistory buildings served by structured or off-site public parking that encourages pedestrian-oriented corridors.

“Redeveloping it as proposed adds a good product to the Old Market, to downtown,” he said. “The building will be high quality and offer a service still in demand that hasn’t reached its peak down there.”

Michael Henery, who owns the nearly 9,000-square-foot site that includes a parking lot and the old-school Diner, said the restaurant has been a popular fixture at that spot for more than 30 years. He leases the structure to restaurateurs who could not be reached for comment Friday. Henery said the new owners would have the right to do what they want with the Diner shell, but he suggested that it could be relocated — a proposition that was fine with the buyer.

“We’ll just be demolishing whatever is left there,” said Raj Patel of Hawkeye Hotels.

As proposed by Hawkeye, the Moxy hotel facade would be primarily red brick. Valet parking would be available for guests entering a lobby that will have billiards, pingpong tables, and a bar and restaurant intended to engage guests as well as community members, said Patel, chief development officer and principal of Hawkeye Hotels.

Offsite parking spaces are to be in a city structure near 10th and Jackson Streets, Patel said. He also wants to reserve stalls in a private structure across the street from the hotel.

Guest rooms, modern with full-size beds and bathrooms, are purposefully compact, Patel said, adding that the hotel focus is on “communal” spaces.

The restaurant, offering a limited lunch and dinner and larger breakfast menu, would be open to the public.

Sidewalks, curbs and landscaping would be improved, and 40 jobs would be created. The developer is asking the city for $1.9 million in tax-increment financing. City Planning Board members are expected to discuss the proposal Wednesday.

Henery, who is in the process of selling the property to the hotelier, said he turns 80 years old next year and is frustrated with the city’s overall investment in keeping the Old Market a top tourist attraction. He said he still loves the area and is holding on to some property, including Michael’s Cantina.

Patel said Omaha has been on his family’s radar for years, as it aligns with the company values. “It’s a very Midwestern community with a really strong business ecosystem,” he said.

Demand generators are strong, he said, citing the Fortune 500 companies, growth of new companies and startups.

Launched by his parents when they immigrated to America in 1982, the family hotel empire began with an 18-room Arkansas hotel that also served as the family home, Patel said. Today Hawkeye owns more than 50 hotels across the country and is expanding in big cities such as Minneapolis, Denver and Dallas.

Patel said the company is rehabilitating iconic properties in places such as Des Moines and St. Louis, and has a dozen hotels that are set to start rising this year.

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