The Menlo Park council voted 4-0 Tuesday night in favor of a proposed hotel on Glenwood Avenue.
The plan would replace Casa de Peninsula, a market-rate senior housing facility, with a Marriott Residence Inn. Of the eight residents remaining in the senior housing, six will be moved out within a week and the other two are deciding between options, according to project representatives.
The city and the applicant estimate the hotel would add about $669,000 to Menlo Park's annual revenue, mainly through the 12 percent transient occupancy tax (TOT). Under the proposed contract, if the hotel fails to provide the city with "a minimum amount of 50 percent of total room occupancy operating revenue for two consecutive years," Menlo Park can require the hotel to pay the difference or provide another public benefit, reduce the size of the project, or revert the site to a senior living facility.
Or, conversely, if in a given year, 85 percent of guests stay longer than 30 days, thereby generating no TOT, the hotel owes the city up to $50,000.
However, the "elephant in the room," as Councilwoman Kirsten Keith put it, is the parking.
Menlo Park's new downtown specific plan would require 173 off-street parking spaces for the hotel. The applicant, however, proposed 113 spaces -- 74 on site and 39 public parking spaces on Garwood Way historically used only by the senior home.
"We have always looked at this project as including Garwood Way, for better or worse," applicant Reed Moulds told the council. When the team realized the parking was actually in the public right-of-way, he said, they worked hard to figure out how to make the project viable anyway.
The Planning Commission recommended that the city limit the hotel's exclusive use of the Garwood Way parking to five years and after that, charge rent to encourage the proprietors to make other arrangements.
Mr. Moulds said he has been talking to other businesses in the vicinity, such as Ducky's car wash, which could possibly have parking spaces available at night after closing.
The agreement approved by the council on Tuesday night incorporated the rent clause, but also includes a provision that no rent will be charged for a given year when the city's revenue from the TOT reach $700,000 or more.