A proposed 63-room, four-story luxury hotel with rooms at $350 a night at 1400 El Camino Real could deliver Menlo Park up to $8.5 million in transient occupancy tax revenue over 10 years. But the developer is also suggesting that $1 million of that go to investors instead an option the council was not averse to discussing further, provided the city recoups the money down the road.
During a study session on Tuesday, Feb. 24, local developer Jeff Pollock of the Pollock Financial Group said that a "minimal level of assistance" from the city would help secure the $31.5 million project's financing.
The appeal for the city is obvious right now the property, which used to house a Shell gas station, is home to a bunch of shrubs and dirt. "It looks like a lot of (downtown) lots," Vice Mayor Rich Cline wryly noted.
While not opposed to sharing the transient occupancy tax revenue, Mr. Cline said he was concerned about maintaining the integrity of the downtown/El Camino Real specific plan "as projects come in and start whittling it down ... at what point can we say no to others who want to come in?"
City Attorney Bill McClure said there was nothing binding about making exceptions for one project, pointing out that the specific plan allows for some discretion. He also said that as far as public benefit in exchange for exceeding the base level of building density goes, the plan does regard a hotel as a benefit in and of itself because other uses allowed on a site, such as office space or residential buildings don't generate anywhere near as much annual revenue.
The boutique hotel would also require a small exception for parking the developer plans to build a 75-car garage underground that uses hydraulic lifts to stack vehicles vertically, but the specific plan's rules state the project should have 79 parking spaces.
Transportation Manager Nikki Nagaya attributed the difference to the specific plan assuming a hotel would include a fitness center that could be used by the public, thereby increasing site traffic. Since the Pollock hotel doesn't include exercise facilities, it's reasonable to allow four fewer parking spaces, she suggested to the council.
The developer is still fine-tuning the details. Based on the council's input, project representatives said they'd look at adding charging stations for electric vehicles to the garage, and incorporating more "green design" elements if it makes sense economically.
Mayor Cat Carlton suggested the Pollock Financial Group pay particular attention to how well the hotel's architecture will suit Menlo Park. If she's learned anything in two years on council, she said, it's to not underestimate people's passion for architecture. "Modern just doesn't fly here... Think warmth, Mediterranean ... don't think walls with windows."
Mr. Pollock told the Almanac he hopes to start construction of the 33,750-square-foot hotel in early 2016 and finish within 12 to 14 months.