A proposed Hampton Inn hotel on El Camino Real in Menlo Park was sidelined Monday night (June 24) when the city's Planning Commission voted 3-1-1 against approving the hotel. Commissioners also decided to continue further discussion of the matter to their next meeting, likely to be on July 22.
The plan for a three-story, 70-room hotel with an underground parking garage at 1704 El Camino Real has gone through numerous iterations since it was first proposed in 2016.
There is now a 28-room Red Cottage Inn there, and the developer, Sagar Patel, says his family has worked hard running the inn since 1994.
In order to build the new hotel at the density the owner has proposed, the city requires that a "public benefit" be provided to the community. Patel has asked the city to allow the hotel or "transient occupancy" taxes – a fee of 12% per hotel room per night that goes directly to the city – to qualify as the required public benefit.
The tax revenue has been accepted as the public benefit in past projects under the current El Camino Real/downtown specific plan zoning code - including the Park James Hotel and Marriott Residence Inn projects - but the residents near this proposed hotel have argued that it isn't enough to make up for what they believe will be adverse impacts to the neighborhood.
Patel talked about the work he's done with the neighbors to address their concerns, but residents still raised pointed objections to the development.
Among them: That the proposed white exterior would be visually impactful; that the proposed 8-foot-tall wall around the perimeter should actually be 13 feet and painted brown instead of white; and that the proposal, which has been redesigned multiple times with feedback from the nearby residents, "looks like a freeway motel."
Patel said that while he's been criticized for the "franchise of choice," the hotel will "look more and feel like a boutique hotel that … happens to have a Hampton Inn sticker."
Patel said he has revised a mid-process proposal to put the underground parking above ground - which would have saved money but which the neighbors disliked - because he "didn't want to fight the fight."
"We've had this property for a long time," he said. "We've toiled for a long time. For us to give up equity in this project is not something we take lightly."
A divided commission
The commission's vote highlights an ongoing philosophical tension among commissioners: Should members abide by the zoning laws and policies laid out in the city's El Camino Real/downtown specific plan and ConnectMenlo general plan update, which govern the two areas of town where most new development is occurring? Or should they take a more active stance against projects that, while fully compliant with these zoning laws and policies, some members oppose for other reasons?
Commissioner Andrew Barnes took the former position.
Given the steps the applicant has taken and what the rules have been up to now under the El Camino Real/downtown plan, he said, "I'm unable to find a reason why it doesn't conform."
Evaluating whether or not hotel taxes should be allowed to count as a public benefit, he argued, is above his "pay grade" (as a volunteer commissioner).
Commissioner Henry Riggs' response was mixed: He argued that the city took years to develop these plans to create consistent policies, but noted he did want a debate about whether hotel taxes should count as a public benefit. In addition, he argued, "The applicant here has worked with the neighborhood to a degree that, in 12 years, I have rarely seen." He ultimately abstained from a vote.
Commissioners Michele Tate, Camille Kennedy and Katherine Strehl voted against approving the project at all. As a result, the matter will have to be brought back to the commission because city staff wasn't prepared for that decision and must now draft new "findings" for why the project shouldn't be approved.
That means another public hearing and the potential for the commission's two absent members, Michael Doran and Chris DeCardy, to weigh in next time.
Kennedy said she didn't think the project should be approved because the "base" amount of development the downtown plan permits isn't good for the community anymore, let alone the "bonus" amount of development the plan allows if the developer provides benefits to the community.
Strehl said her most significant objection to the project is the proposal to accept hotel taxes as a public benefit.
The taxes-as-public-benefit debate, she said, is "something I think the City Council needs to grapple with. The sooner they grapple with it, the sooner this project can come back."
Correction: A previous version of this story incorrectly indicated that Commissioner Riggs had voted in opposition to the motion to not permit the hotel; in fact, he abstained, but did support a previous motion to permit the hotel.