Construction on a hotel project on East Second Avenue between Fourth and Fifth streets could begin in coming weeks. But the city of Durango is waiting to receive a letter of credit from Lamont Companies, the developer, before it greenlights construction.

The project, a dual-branded AC Hotel by Marriott and Hampton Inn and Suites by Hilton, has stalled for several years. Daniel Murray, development services manager for the city, said Lamont Companies has “indicated” to city staff members that the COVID-19 pandemic, supply chain issues and contractor issues are behind the holdup.

Lamont Companies’ Jeff Lamont was unavailable for comment Tuesday afternoon.

Scott Shine, community development director, said in a brief update to Durango City Council last week that Lamont Companies has been working offsite to prepare materials needed for a parking garage at the site. The parking garage would be the first step in construction for the hotels since a massive hole was excavated four years ago in November 2018.

The excavation was done without a concrete slab or concrete foundation wall ever being built, raising concerns about the structural integrity of the massive dirt wall.

“We understand that they want to be moving forward as soon as possible,” Shine said.

The city is waiting for Lamont Companies to deliver a letter of credit, which would provide the city with financial resources to stabilize the foundation wall should the project be abandoned, he said.

The city has monitored the foundation wall on a monthly basis, and sometimes more often, he said.

Murray said geological engineers have put tolerance thresholds in place and so far, conditions at the site have not breached those thresholds. He said the city doesn’t allow garbage trucks or other heavy vehicles to traverse the alleyway adjacent to the wall’s cliffside to avoid putting stress on the wall.

Monitoring will continue until the site foundation is completed by the developer, he said.

Shine said the city has been in communication with neighbors adjacent to the site and has responded to complaints about weeds and other concerns.

He said residents might notice activity at the site because Lamont Companies is beginning to store materials there.

The project would create 202 rooms in total across two hotels and would stand six stories tall at its heighest point. It is a modular, prefabricated design, meaning the hotel units and foundation were fabricated elsewhere – the Front Range area, Murray said – and will be delivered by truck to the construction site where they will be put together using a crane and limited onsite labor.

“The onsite work has not been occurring but the developer remains diligent in the sense that they’ve been working offsite,” Murray said. “So it’s been slow offsite but we’ve been informed by the concrete manufacturer for them that that work is nearing completion.”

He said the developer will be eligible for a full building permit “any day now.”

The city originally approved Lamont Companies’ site specific development plan in November, 2014, he said. The city finally issued excavation permits in 2018, which allowed the developer to perform excavation and shoring, the result of which is the pit that exists today.

In January, 2021, the developer received a foundation permit. But work slowed down and the city eventually agreed to an extension of that permit.

On Tuesday, Councilor Olivier Bosmans said the stalled project “has been an eyesore for our community” as well as a health and public safety problem. He asked if the city has a performance bond or a completion bond to ensure completion of the project is not pushed out further.

Shine said the letter of credit the city is waiting to receive is intended to protect the city and ensure the pit can be backfilled or another project can be pursued there. He said Lamont Companies is also responsible for securing public improvements, such as sidewalk and utility work, around the site.

A project completion date for the project overall has not been provided to the city, Murray said.

“We have asked for that same information from them,” he said.

cburney@durangoherald.com