At Tuesday's city council meeting, Sacramento Mayor Heather Fargo said the project will help stimulate downtown redevelopment.
"This really is going to change J Street so we’re very excited about this project and about it moving forward."
The council voted unanimously to loan developers nearly $10 million to renovate the historic Cal Western Life Building at 10th and J Streets into a 197-room hotel.
The hotel will be operated by San Francisco-based JDV. Company president Chip Conley says they want to get community feedback on how the hotel should look.
"We’ve already had two community meetings, we’re going to have two more – one in July and one in September, to actually make sure that we create a hotel for Sacramento that everybody could be proud of."
City officials say the new hotel will create 130 local jobs and generate millions of dollars in property and sales tax.