In the continuing upgrade of the Cross County Shopping Center, construction will begin in early 2013 on a $26 million Hyatt Hotel, Yonkers officials announced Tuesday.

The hotel chain plans to convert an existing office tower at the outdoor mall into a 155-room Hyatt Place. The brand caters to families and business travelers and will be the first hotel at the Cross County Center, one of the first malls built in the country, said Jim Cavanaugh, spokesman for the Yonkers Industrial Development Agency.

"They've got their financing and they're ready to move in the next few months," Cavanaugh said.

Demolition work inside the existing office tower will begin during the first three months of 2013, with construction scheduled for the fall, according to the city.

On Tuesday night, the development agency voted its final approvals to assist in the construction by providing a $266,220 mortgage tax abatement and an estimated $775,023 sales tax exemption on construction materials.

The project will create 80 construction jobs during the 18-month build period, with an estimated payroll of $6.6 million, Cavanaugh said. The hotel also will create 28 full-time equivalent jobs.

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The developers will spend an estimated $26.3 million to add 17,000 square feet of first floor and basement space to the existing 55,000-square-foot office tower.

The city agency initially approved the project in July, and the latest action is the final vote necessary to set the project in motion.

Also decided at the meeting was a vote to authorize the first phase of plans to turn Teutonia Hall, a German-themed music hall on Buena Vista Avenue constructed in 1891, into a 25-story residential tower with 412 units and a 550-space parking garage. The first phase involves an industrial cleanup of the site, which is known as a brownfield -- an abandoned or underused industrial or commercial space available for reuse.

On Tuesday night, the development agency agreed to pay $8 million in demolition and site remediation and authorized $144,000 in mortgage tax abatements and $335,000 in sales tax exemption on construction materials.

The brownfield cleanup will take "several months," a period during which the developer, Metro Partners, must complete financing arrangements for the project, Cavanaugh said. Once remediation is complete, the developer will return to the city to apply for additional incentives that would launch construction of the $173 million project during 2013.

The overall project will include not only Teutonia Hall, but also the adjacent three-story Trolley Barn, a historic steel-frame brick building, plus three existing residential buildings. The facade of Teutonia Hall will be preserved and transferred to the front of the parking garage.

"These projects represent the different types of investment happening in Yonkers today," Yonkers Mayor Mike Spano, who chairs the development agency, said in a statement. "On the one hand a thriving shopping center is improving, and on the other a long-vacant building will provide new housing."