Those clamoring for more hotel space in Newton, especially for race weekends like the upcoming Iowa Corn Indy 250, will soon get their wish. Newton City Council on Monday approved a development agreement for a new hotel with HNF Development LLC, a local group of investors headed by Alan Halferty and David Fisher. That group wants to construct a 40-unit hotel at 4300 S. 22nd Ave. E. for an estimated cost of $2.5 million. The hotel would reside within the city’s Prairie Fire Economic Development district, a space named with the hope that development would spead like wildfire around Interstate 80 exit 168. So far, new construction has included Love’s Country Store gas station with McDonalds and Chester’s Chicken, an AmericInn hotel currently under construction and the Prairie Gas Station owned by Fisher. The new hotel would sit on the north side of the Prairie Gas property. City officials, Iowa Speedway people and even former NASCAR driver Rusty Wallace have suggested a need for additional hotel space in Newton. “Having visitors stay overnight brings a great deal of beneift to the city and to the community as a whole so we’re excited whenever there is a hotel proposal, but I have to tell you, this one is particularly exciting because it’s done with a group of local entrepreneurs.” Community Development Director Bryan Friedman said. “Also, I think it’s consistent with this district and how we’re trying to make this a unique experience. As part of the development agreement, Newton would offer $250,000 of grant money to help with construction costs. That money would be paid in installments of $87,000 at the start of construction, another $38,000 at the halfway point and the remainder upon completion of the project. In exchange, the hotel would be assessed at a minimum of $1.5 million. The $250,000 would likely need to be bonded for, so council spent some time discussing the city’s debt capacity. Friedman noted that the city currently has about $23.5 million in debt, about 65.5 percent of its threshold. With commitments to the Trinity project, and the demolition of the Maytag downtown campus, the city debt level could climb has high as $26.5 million with the latest hotel project. This, Friedman said, would leave the city at roughly 74.5 percent of its capacity. City bonding counsel has recommended not going above 80 percent of capacity. “Taking on debt to the city as we are within sight of limits is something we do with great consideration and not haphazardly,” Friedman said, “but given what we know about our exciting current situation, I believe this is affordable and fits within prudent use of our debt capacity.” A majority of council members agreed, approving the measure 4-2, with Ron Foreman and Jim Plumb voting against. Foreman cited uncertainty of tax valuations and concerns about the city’s debt capacity before casting his vote against. Others expressed concerns about the project as well. A man who identified himself as Sam who operates Days Inn addressed council with concerns that new hotels could simply wind up wiping out old hotels. “Would that be a good idea to bring something new and kill the old one?” he asked. With council approval, the project is ready to move forward. The Prairie Inn is scheduled to being construction this summer with completion of next April. “Which sets it up very nicely for the spring and summer tourism season next year,” Friedman said.