CHICAGO—The owners of the Chicago Cubs announced Thursday that the team will build a hotel across from Wrigley Field, on the northwest corner of Clark and Addison streets, as part of a plan to bring a new mixed-use development the neighborhood.

The Ricketts family signed an agreement with Starwood Hotels & Resorts Worldwide Inc. to develop a Sheraton-brand hotel on the site of a current McDonald’s restaurant. The burger firm also signed a deal with the Ricketts family that a McDonald’s will be a part of the planned large-scale entertainment and retail development that will go up adjacent to the hotel.

Ricketts family spokesman Dennis Culloton said the hotel will complement the neighborhood as well as serve fans and tourists. "Most importantly, building this hotel is a critical part of a more than $500 million plan to re-invest in Wrigley Field and the neighborhood," Culloton said in a statement.

The Ricketts purchased the land in 2011 for $20 million. The family also owns a parcel of land next to Wrigley Field, but development of that property depends on a proposal to renovate the 99-year-old ballpark. The family has been seeking state and local taxpayer incentives to help finance the proposed $200 million in renovations, Culloton said.