Sand Hill Property Co. is under contract to buy Casa de Peninsula, a 125-unit senior residential property at 555 Glenwood Ave., and convert it to a 138-room hotel, according to Sand Hill Property representative Reed Moulds.
Branded as a Marriott Residence Inn, the hotel would provide extended-stay accommodations, with about one-quarter of the guests projected to stay more than a month. Analyses by the city and the applicant estimate the hotel would add an estimated $669,000 to Menlo Park's annual revenue, with approximately $616,000 to $656,000 contributed by the 12 percent transient occupancy tax approved by voters in November.
Should the tax revenue fall short — defined in the staff report as not providing the city with "a minimum amount of 50 percent of total room occupancy operating revenue for two consecutive years" — Menlo Park can require the hotel to pay the difference or provide another public benefit, decrease the size of the project, or revert the site to a senior living facility, under the terms of the proposed contract.
The city's new downtown specific plan requires 173 off-street parking spaces for a hotel of this size. However, the applicant proposes 113 spaces — 74 on site and 39 spaces on Garwood Way currently used by the senior home, but within the public right-of-way.
Hotel representatives told the Planning Commission that they will discuss whether a nearby new development proposed for 1300 El Camino Real might have space to lease for parking when that project gets closer to fruition.
While Mr. Kadvany and colleague Katie Ferrick viewed the Garwood Way spaces as an exchange for the tax revenue, Commissioner Vincent Bressler disagreed.
"Why would Menlo Park give away land to make this happen?" he said during the meeting, and noted that he'd like to see sufficient parking built into the project. Or, he said, charging for the hotel's use of the Garwood Way spaces could generate revenue to be used for building the parking garages the specific plan envisioned.
"Where are we going to get that revenue? ... The logical place is to charge for parking on Garwood Way ... obviously it's worth something."
The commission voted 6-1 to recommend that the hotel should be charged market rate for using the parking spaces on Garwood Way after five years if it hasn't found space elsewhere.
Commissioner John Onken told the Almanac his dissenting vote was based on believing that the parking should conform to the new downtown specific plan requirements. "As much as I'd like to see the hotel there and additional income for the city, I don't think the parking works and am keen to work to our specific plan in that respect."
The project will now go before the City Council for approval.
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