The view from the Bayshore Freeway in Menlo Park may be about to change: Developer David Bohannon, hotel partner in hand at long last, plans to see Menlo Gateway up and running by 2018.
The plan is to build three office buildings -- still totaling 694,000 square feet -- three parking garages and one hotel on the 16 acres along Independence and Constitution drives.
But the project that will be presented to the City Council on March 10 has changed in some particulars from the version voters approved in 2010.
Mr. Bohannon's agreement with the city requires that construction of the hotel begin before he can build the office space. The current design concept shows a hotel of glass and light folded into sharp angles. With 250 rooms in an 11-story tower, this iteration has 20 more rooms than the original version, spread across 193,000 square feet.
Amenities include a restaurant, an outdoor pool with lounge, and a 40,000-square-foot fitness club that will be managed independently of the hotel. Meeting spaces -- 20,000 square feet created both indoors and outdoors -- round out the planned project.
Construction will attain, at a minimum, LEED Gold standards of "green" design, according to the developer.
Ensemble Hotel Partners, based in Long Beach, will manage the hotel, which will launch as part of Marriott's new "Autograph Collection" series of properties.
"All the hotels under the Autograph Collection are a brand of one," explained Brian Ehrlich, chief investment officer for Ensemble. The Menlo Gateway site will be customized through an independent branding exercise "to help to create a personality, a style, a design that celebrates Menlo Park," he said.
He estimated the hotel's construction cost as in the ballpark of $100 million, plus or minus 10 percent. Building would start the first quarter of 2016, with the hotel opening by early 2018.
Room rates will be in the range of $400 "we hope to tag along with the Four Seasons, and probably drift and drag behind them by $20 to $30. The one big hole in the market in our perspective is outdoor function and meeting space, for corporate as well as social events. There really isn't a great place for that both indoors and especially outdoors," Mr. Ehrlich said.
The redesigned hotel is projected to deliver to the city about $3.1 million annually in transient occupancy tax revenue. That's about $1.2 million more than the version presented in 2010, according to Mr. Bohannon.
Bigger hotel but potentially less traffic than was earlier projected? Yes, thanks in part to a smaller fitness center. The developer's consultants estimated 10,777 new daily trips with the revised project; the original version was expected to generate 11,113. The environmental impact report done for the 2010 version should suffice for the updated plans, he said.
Mr. Bohannon hopes to achieve an urban, mixed-use village kind of feel, he said. "I want people to feel this is a very nice place to be, very inviting, frankly, for people who don't want to stay in the hotel, to come in for a meal."
His vision extends beyond the boundaries of the Menlo Gateway site -- he hopes to establish standards, such as 12- to 16-foot-wide sidewalks that Menlo Park will incorporate into the new zoning regulations the city is currently working on for the M2 district.
Bookended by Facebook and Menlo Gateway, the M2 industrial zone is undergoing a renaissance, with new apartment complexes, Facebook's ever-expanding number of campuses, and the opening of new incubator companies. The changes will impact the surrounding Belle Haven neighborhood -- something developers are taking into consideration.
"We're partnering with Facebook right now to improve Chilco Street. ... we agreed to design it and provide the design to the city," Mr. Bohannon said. They are still hashing out exactly what those improvements will look like.
Not a bubble
The news may surprise some in Menlo Park who were starting to wonder whether Menlo Gateway would ever break ground.
"I started the project in 2004, with a smaller, different type of hotel," Mr. Bohannon said. But that was before the recession killed investors' enthusiasm for new developments. That enthusiasm continued to lag, at least as far as luxury hotels were concerned, once the economy started to bounce back.
"There are very few four-star, full-service hotels being developed in this country," he said. "Asia is doing a lot."
The current superheated real estate climate, however, seems to be something different from a bubble, Mr. Bohannon said. He thinks there will be another cycle of ups and downs, but "we have institutional memory now." Banks as a result of being burned badly by the previous downturn are "very disciplined" when it comes to investing.
Even with the economic recovery that started about three to four years ago, Mr. Bohannon said, the upswing is still spreading across the United States. Investors first snapped up "broken assets," such as hotels that were financially underwater, before looking to build new projects, making something like Menlo Gateway a low priority.
"If you're someone like us, sitting on (a proposal) for a full-service hotel, it wasn't happening," Mr. Bohannon said. He could have gone smaller; people were calling to ask about doing a limited hotel, he said. But, he added, "While the city wanted this type of hotel, we also wanted it. I have been patient, waiting to bring forward the right type of hotel."
At a glance
■ 193,000-square-foot hotel with 250 rooms in an 11-story tower.
■ 694,000 square feet of office space, with two buildings on Constitution Drive and one on Independence Drive.
■ Both the hotel and office buildings will be under 140 feet high
■ 40,000-square-foot fitness center.
■ 2,689 parking spaces, including three parking garages.