The planned convention center hotel is nearing reality.

Hotel developer Tom Bauer exercised his option this weekend, said attorney Walter Brown, acting for the city.

In July, the city and Broadway Hospitality, LLC, entered into an option and development agreement for roughly $524,000, Brown said.

The agreement basically said the city would hold the Canal Street property until the company’s plans and finances were in place, he said.

“Bauer paid 10 percent down at the time,” Brown said. “The next step is to set up a closing date. Once he’s paid, he can break ground.”

Mayor Phillip West said the completion of this step in the process meant the city was moving forward.

“Hopefully, we’ll be able to finalize the deal before the month of January is over, where (Bauer) can break ground and begin developing his hotel,” West said Tuesday.

West said he hoped the hotel, paired with the convention center, would attract larger conferences.

“Because of the newness of the hotel and the closeness to the river, it should put us in a better position to compete for conferences and conventions,” he said.

The letter to the city exercising the company’s option, provided by Brown, says the company will pay the city the remaining $471,900 before or at the time of closing.

Buildings on the corner of Canal and Main streets were knocked down in October to make way for the 120-room hotel.

At the time, Bauer said he anticipated closing in November and starting construction before the end of 2006.

The hotel will be managed by New Orleans Hotel Consultants, a group the city board of aldermen approved in December to manage the convention center, community center and city auditorium.