Construction had been slated to begin no later than this spring.
The Olympia Companies, the group that had previously pursued the project, failed to obtain the necessary permits in time to purchase the property by a Dec. 31 deadline, Marc Dugas, vice president of business development for Olympia, said.
Daniel Flaherty, Olympia's managing director, said Olympia stopped pursuing the project because of economic concerns. When asked why Olympia employees gave different reasons for the delay in other interviews with The Dartmouth -- that the permit deadline had passed -- Flaherty said he could not comment further.
The Maine Course Hospitality Group will move forward with the project, using the plans Olympia had proposed for the corner lot, which is currently owned by a local family, Olsen said. The planned 72-room hotel will include a restaurant and an underground parking garage, The Dartmouth previously reported.
Olympia will continue to work to develop a hotel in Hanover, Dugas said.
"We're still trying to work on the same project," he said.
Current plans propose that the hotel's parking garage extend on to College-owned property to the east of the proposed hotel site, so MCHG and Dartmouth must agree on an easement before MCHG can make the purchase, Olsen said. The College will likely receive monetary compensation for the arrangement, he said.
MCHG has not yet received building permits from Hanover, but the town has given the company approval to apply for them, Olsen said.
Hanover Town Manager Julia Griffin said the new developer, MCHG, might be better funded than Olympia.
Constructing the hotel now also allows the company to take advantage of low construction costs, Griffin said.
"The hope is that by the time the project is done, the economy will have turned around," Griffin said.
The hotel will be located next to the College's South Block development, which has attracted several new businesses over the past year and half, including Umpleby's Bakery, The Mountain Goat and the Yama Restaurant.
A new hotel could increase Hanover's economic growth, Carl Pratt, general manager of The Hanover Inn, said.
"In the end, any economic development in downtown is good for everybody," Pratt said, adding that the demand for rooms in the area is large enough to support two hotels.
The hotel will make better use of prime downtown real estate and will help increase business for stores and restaurants, although the actual construction may be a temporary nuisance, Griffin said.
"Construction is unsettling, and it's frustrating to folks who live and work in the area," Griffin said.
MCHG could not be reached for comment by press time.
