Hotel project moving forward Hotel project moving forward (March 09, 2001)

By Justin Scheck

Mountain View's quest for a premium hotel and conference center took a step forward last week as the city council discussed what kind of developer they want to have build an upscale project on the city-owned Charleston East site adjacent to Shoreline Park.

According to a report prepared by Ellis Berns, the city's economic development manager, the council is seeking to have a have a project built that could bring over $2.5 million dollars in annual revenue to the city.

Stasek said the council has wanted such a development for a long time due to the city's lack of a formal gathering space for large events, as well as for an upscale hotel's potential to generate revenue.

"We've been hearing loud and clear that the people in the community really need more hotel space... We really don't have enough, just, gathering space," said Council member Rosemary Stasek.

"I've always envisioned that to be a prime hotel site for the city... You've got the golf course, and you've got all the walking areas," said Council member Ralph Faravelli.

Berns said that the hotel and conference center would occupy the last vacant space in the North Bayshore area, which has been the subject of a decades-long redevelopment project.

The hotel/conference center has been a long-term goal of the council; such a development had been planned for Shoreline Park, and, while the city changed the site, they have been eager to bring in the hotel, which could be a revenue source unlike any other in the city.

According to Mike Percy, the city's principal planner, hotel guests in Mountain View are required to pay a transient occupancy tax, which amounts to 10 percent of the price of a room.

Percy said the transient occupancy tax revenues alone for the 300- to 500-room hotel the city hopes to have on the site could bring about $2 million a year into the city's general fund.

In addition, the hotel would likely pay an annual lease on the site that could exceed $500,000, said Berns.

However, the location of the site within the North Bayshore Community District would require all property tax revenue to go to an improvement fund for the North Bayshore area, rather than to Mountain View schools or the city's general fund.

The council's current action is intended to establish a Request for Qualifications (RFQ) that will outline the city's desires for the site and the type of developer that would be preferred to build it.

According Berns, the city has a list of specific standards for the project.

These include a desire to lease rather than sell the site to the chosen developer for 50 to 60 years.

Percy said that hotel will be limited to four stories and a maximum height of 82 feet. The development is slated to occupy 12.4 acres of the 18.6 acre site.

The remaining land is zoned for a future 4.2-acre community/education project and a 2-acre area to allow for flexibility in developing both projects.

Other requirements imposed by the city include assurances from developers that the hotel will be completed within a set time with little disruption to the surrounding area.

The city will likely require the developer to engage in a "labor neutrality agreement" with the Hotel/Restaurant Employees Union Local 19 prior to the a lease agreement with the city.

This neutrality agreement would have the developer agree to not disrupt union organizing activity at the hotel in exchange for the union agreeing to not disrupt the project through protest actions. Faravelli said Monday he objects to the labor agreement, which was approved by the council while he was absent due to illness.

He characterized the labor provision as "a qualifier... that they would have to be union all the way through, and qualifiers hurt your chances" of attracting developers. Faravelli said that he is not against the hotel being unionized but has reservations about making a requirement before a developer is found.

"I have serious concerns... It could be the difference between getting the type of project we want and not getting the type of project we want," Faravelli said.

Faith Raider, a research analyst with the Hotel Employees and Restaurant Employees International Union, said Tuesday that the neutrality agreement does not require the hotel to be a union establishment, but guarantees the union the ability to hold timely votes and to organize without anti-union campaigns by the hotel.

The hotel owners "give up their ability to run an anti-union campaign, and we give up the right to picket," said Raider.

Berns said that if no obstacles arise with the project, a developer could be chosen by October. He and Percy agreed that it is unlikely to see development start before early 2003.

Developers able to build a hotel of the quality anticipated by the city include Marriot International, Hilton Hotels, Starwood Hotels and Resorts, Doral Hotels and Resorts, Benchmark Hospitality, and Dolce International. Berns said that while the lot will be leased out through a bidding process, the city wants to be in close contact with potential developers prior to bidding so that bids will closely fit the city's desires.