News

Bohannon to tweak Menlo Gateway

Type of hotel, sports club likely to change

It's back to the drawing board for at least part of Menlo Gateway. The project remains a concept three years after voters approved it in 2010, and in the face of a changing economy, developer David Bohannon plans to make some adaptations.

The plan is to build an office-hotel complex with nearly 1 million square feet of floor space on 16 acres along Independence and Constitution drives on the east side of U.S. 101. In addition to a seven-floor hotel, there would be office buildings, a restaurant, parking garages and a fitness club.

Mr. Bohannon told the Planning Commission on Dec. 16 during the annual project review that his company was "talking to somebody about the hotel and hopefully we'll reach an agreement with those folks soon, and then we can move forward."

But what will that hotel look like? Originally Menlo Gateway was going to incorporate a type of Marriott Renaissance hotel-sports club combination, but according to Mr. Bohannon, that ran into some problems, for a couple of reasons: The model "did not really take hold and capture the fancy of institutional financing"; as a result, Marriott has abandoned it. Also, funding for hotel construction has been "extremely limited since 2008" and full-service hotels are still not favored by lenders, he said.

So about nine months ago Mr. Bohannon also decided to walk away from the concept and start looking for hotel developers who had the ability to finance their own deals. "...We're down to final discussions with someone who's extremely capable, and once we're reached an agreement with them I'll be able to be much more forthcoming about a change we want to introduce. So we will be back asking to modify the permit."

Planning commissioners expressed encouragement for the success of the project, and curiosity about the changes, which for now remains unsated.

Mr. Bohannon described the change as "a very tough decision" and noted, "As much as I love you all, I'm not in love with coming back and having to go through that whole process again."

The hotel represents a key aspect of the development to Mr. Bohannon, who said he can't build it without also building the office space that will pay for the hotel's essential parking garage. Once the hotel financing is secured, he can then market the office space in hopes of securing 60 to 70 percent lease commitments to kick off funding for construction of the entire complex.

He remains optimistic. "We have so much interest in the project (that) I believe it will be successful."

Comments

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Posted by Neighbor
a resident of Menlo Park: Linfield Oaks
on Dec 21, 2013 at 12:56 pm

Anyone know how a 7 story hotel next to 101 will affect Surf Airs options for flying the Eastern portion of the flight route their exploring over the freeway?


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Posted by Menlo Voter
a resident of Menlo Park: other
on Dec 21, 2013 at 1:38 pm

a seven story hotel should have no effect on aircraft operations. Seven stories is max 80 to 90 feet AGL. Aircraft that far from the airport are nowhere near that low.


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Posted by Not a chance
a resident of Menlo Park: Central Menlo Park
on Dec 22, 2013 at 10:08 am

Did anyone attend or watch the meeting online? Bohannon is not going to build that hotel. He never had any intention of building it. The question should be: what impact is 1,000,000 square feet of office going to have on Menlo Park? The answer may not be as close to zero as he'd like the council to believe.


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Posted by Clarification
a resident of Menlo Park: other
on Dec 22, 2013 at 11:42 am

Yes, it seems obvious that Bohannon will not build a hotel that "did not really take hold and capture the fancy of institutional financing", but he will build a hotel. You may as well define "that hotel", as the previous comment described, as a hotel with characteristics that the market will not support and will never be built. That said, Bohannon will indeed built a hotel, which will have characteristics that are appropriate for the market. This is how the free market works.


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Posted by Surprised
a resident of Menlo Park: other
on Dec 23, 2013 at 1:16 pm

Not a chance-

What makes you think Bohannon will NOT build the hotel? It's clear to me that any chance of the 1,000,000 sf of office you mentioned (actually under 700,000 sf of proposed office) has of being built hinders completely on the hotel's existence. A building permit for the hotel site has to be secured by 2015 before any work on the office buildings can take place. With no hotel, there is no Menlo Gateway. End of story.


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Posted by not surprised
a resident of Menlo Park: Allied Arts/Stanford Park
on Dec 27, 2013 at 8:28 am

That Bohannon wants to modify the project should be no surprise. He's always wanted to build only a bunch of office towers, but a prior Council required the promised sweetener, a hotel, to be built in the first phase. That project was approved by voters. Now it will change, and to what? Will it be as beneficial to Menlo Park? Will the traffic impacts be the same, or worse? Will there be any sales tax revenue from the million square feet of offices? Who will benefit besides Bohannon?

Does it need to go back to the voters? After all, they approved something different? Or will the current Council prostrate themselves again to development interests?

Maybe the Almanac could research some of these things?


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Posted by Embarrassed...for you.
a resident of Menlo Park: other
on Dec 27, 2013 at 11:57 am

This project's structure and Bohannon's agreement with the city is clear cut in black and white, and it's embarrassing how uneducated residents of Menlo Park are when it comes to discussing it's development. The direction of the modification discussed above was announced Dec. 16, 2013 at a Menlo Park planning commission meeting. Yes Bohannon is modifying the hotel component of the project...TO ANOTHER HOTEL! HOTEL HOTEL HOTEL. This is what was agreed upon. "Build us a hotel, and you can build your offices." How does this modification affect the city? The council will have to approve any and all modifications to the proposed plan, but no new headaches beyond the already assumed traffic, greenhouse gases...etc should exist. So to reiterate what is fact on paper, Bohannon must secure a building permit for a hotel that produces X amount of tax revenue dollars for the city before he can build his office buildings. The hotel component has not changed simply because it CANNOT. If Bohannon wants to build anything other than a hotel, then he might as well start over and throw the entire project away along with millions of dollars. However I suspect nothing could be further from the truth. Anyone who entertains this idea of Bohannon and a "scheme" to get over on the city is sadly ignorant.


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