The Courtyard by Marriott hotel under construction on Forest Drive in New Albany is expected to open by the end of this year and could generate about $150,000 annually for the city.

The Courtyard by Marriott hotel under construction on Forest Drive in New Albany is expected to open by the end of this year and could generate about $150,000 annually for the city.

The hotel will be New Albany's first. David Wespiser, managing member of Hotel Development Services, said the 122-room, four-story hotel will be "tailored ... to New Albany, with the look and feel of the city."

The city will collect income taxes from the hotel in addition to a 6 percent bed tax, with 3 percent going back to the hotel for marketing, said Jennifer Chrysler, community development director.

New Albany City Council in June 2011 agreed to share the bed-tax revenue with Hotel Development Services for promotion of the hotel. Legislation was approved in 2010 for a 6 percent bed tax on all hotel and motel rooms in the city limits.

Chrysler said the city hopes to earn about $150,000 a year from the bed and income taxes.

She said if the hotel is 65 percent occupied in the year and averages a rate of $140 per night, the bed tax would be $249,000 each year. Half of that -- about $124,500 in Chrysler's scenario -- would go to New Albany.

Chrysler said hotel officials estimate paying $22,000 in income taxes per year to the city.

The city's planning commission Aug. 20 approved two sign variances for the hotel. Three other sign variances for the hotel were tabled to the commission's Oct. 15 meeting, pending more information from city officials.

The two approved signs required variances from city code because they will be mounted on the front and back of the hotel, facing Johnstown Road and Smith's Mill Road, respectively, rather than on the access street, Forest Drive.

The three tabled variances would allow the hotel developers to install two brick monument signs in landscaping beds on the north and south sides of the building.

City Planner Stephen Mayer told the planning commission the city code requires signs in that area to be mounted on white posts that resemble a fence for horses.

He said city officials might consider a different type of sign for retail businesses in that area if the entire retail area, which includes 52 acres zoned for commercial, retail and office, uses the same type of signs.

Kathryn Meyer, deputy community development director, said no other applications for the 52 acres have been filed. The closest business in the area, Tutor Time, has a sign on white posts that resemble a fence for horses. That building faces Johnstown Road and is accessed off Woodcrest Way.