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Menlo Park senior home may become extended-stay hotel

by Sandy Brundage

Casa on the Peninsula, formerly known as Glenwood Inn, may be reborn under a third name — Marriott Residence Inn — if the applicant wins over the Menlo Park City Council on Tuesday (Oct. 30).

The property at 555 Glenwood Ave. currently provides 125 market-rate units for seniors. That address lies within a mixed-use/residential zone of the new downtown/El Camino Real specific plan. Sand Hill Property Company is asking the council to study the impact of converting the property to a 138-room hotel while retaining the three-story and one-story buildings already on the site.

The hotel would be a part of the Marriott Residence Inn chain and provide extended stay accommodations of a week or longer, the staff report said. But while hotels add to a city's revenue through the transient occupancy tax (TOT), the tax excludes accommodations intended for stays of longer than 30 days — and that might be the case here, according to the staff report: "Based on the applicant's experience operating a Marriott Residence Inn in Los Altos on El Camino Real, 23 percent of room revenue would be from guests staying 30 days or longer, and as such would not be subject to TOT. However, as proposed, there would not be any restriction that would prevent non-TOT revenue from being even higher."

The specific plan allows hotels in mixed use/residential zones. So the council needs to consider whether an extended-stay facility like a Marriott Inn meets the definition of "hotel" given the projected percentage of 30-day stays, and if so, should Menlo Park cap the number of extended stays allowed to minimize loss of tax revenue?

Sand Hill Property Company prepared an economic review that concluded a hotel conversion would increase annual revenues from the property by approximately $660,000 at the current 10 percent tax, or by $770,000 if voters approve a TOT increase to 12 percent in November. The revenue from longer-term stays would add $163,000 to $196,000 if not excluded from the tax.

Parking presents another item worth close examination. The specific plan requires 173 off-street parking spaces for a hotel of this size. However, the applicant proposes 117 spaces, with 39 on-street slots. The staff report outlines mechanisms such as a variance or sharing parking with another development to allow for fewer spaces at the Glenwood Avenue site.

Conversion of the senior facility to a hotel would trigger negotiations for public benefit, given the site's floor-area ratio, according to the staff report.

Go to tinyurl.com/9ad498o to review the agenda and associated reports. Tuesday's meeting starts at 7 p.m. in the council chambers at the Civic Center at 701 Laurel Street.