The city commissioned HVS Consulting & Valuation to do an analysis of the hotel market. It analyzed the existing room supply and the addition of Embassy Suites as the baseline and concluded that “the near-term development of a conference hotel facility with the addition of an extended stay hotel to be built shortly thereafter would be most beneficial to visitors, the City of Davis, other hotels in the market, and the overall community.”
However, HVS concluded that “the addition of another hotel, specifically another extended-stay facility, would not benefit the market for another four to five years after the initial extended-stay hotel has opened.”
The question before the city council was how to proceed at this point in time. The conversation, which saw Rochelle Swanson recuse herself, featured an interesting exchange between Mayor Pro Tem Robb Davis and Councilmember Brett Lee.
The mayor pro tem explained, “The recommendation feels to me like kind of a de facto RFA (Request For Applications) process.” He said, “The logic of the report is that… we have two projects, we should move forward with one at this time, another one later.”
He said it is one thing if this is a city-owned property, but “when we’re talking about a private development the question shifts to me about the issue of entitlement. We do have some entitlement issues here.” He pointed out both require general plan amendments which gives the council the ability “to make sure that the needs of the city, especially vis-à-vis energy, transportation and traffic, we will need to be able to be sure that we have a robust ask in that respect.”
But he questions the idea of choosing one out of the two. “I’m not really comfortable doing that,” he explained.
Brett Lee responded that he and Robb Davis had written an op-ed in the Enterprise “talking about this idea that we should be more in the driver’s seat in terms of evaluating proposals.”
He noted that the recommendation does not say that the council will choose one, “we could choose two or we could choose none.” He said, “Rather than react to a certain proposal, I think the city did a good job in terms of
commissioning a study to get a better sense from the city’s point of view what makes sense financially.
“Individual proponents came forward with their own study showing how amazingly awesome it would be for the city if their project went through,” he said. He said this allows the city to get a better sense of the market “without the heat of a specific project before us.”
Robb Davis said he agrees with these points and the need to get out in front. “Where I’m struggling is that recommendation comes along with a report that suggests strongly we should go with one to begin with,” he said. He is in favor of developing a specific list of things that will come out of these projects but “less clear about the implications of accepting a study that moves us in the direction of saying we should only do one now.”
Brett Lee pointed out that the financial gain to the city about doing Embassy Suites by itself versus Embassy Suites – Plus One seems “very small.” “It is a weak or small benefit to the city to go Embassy Suites – Plus One,” he said. “I don’t think there’s overwhelming evidence that the city should do Embassy Suites –Plus One.”
He concluded, “Financially, it wasn’t that strong of a case.”
Robb Davis noted, with the various reports, “It’s hard to read those four documents together and say we’re talking about the same town in the relative same time period.”
He noted that some reports argue that we need additional space to capture market share that is going outside of town. He said, “We wanted to understand what leakage was. I don’t know if we captured it (in the HVS report) and that’s part of what I’m struggling with.”
He said it is hard to dive into a technical report where he is not an expert and question it, but in this case he is: “I’m seeing things written in other reports that seem to contradict it. Largely it’s about market segmentation around what an Extended Stay would provide.”
Robb Davis argued, “Our responsibility is to consider how we would maximize the opportunity for visitors to get to Davis so that they lodge here, don’t lodge in Sacramento, don’t lodge in Woodland, don’t lodge in Winters, sorry if those cities are watching here tonight, but this is the way it is.”
He concluded, “I’m not going to stand in the way of this.” He said, “What I’m not on board with is the idea that… there is a choice made for one or the other. I want to state strongly that I’m not in favor of going in that direction at this point.”
Lucas Frerichs said his first priority is the success of the Embassy Suites. He noted it has been approved but has some legal issues, “That is paramount and it is one of our top goals as council.” He said, “I think we need to cautiously proceed.”
Dan Wolk agreed that the Embassy Suites should be the top priority right now. He added, “I agree that there is a need for an extended stay hotel in Davis.”
Robb Davis believes that the report underestimates the number of people who are coming to Davis for conferences, but staying in Sacramento or other areas because of the lack of hotel rooms. “I think this report really underestimates it,” he said.
Council then passed the staff report, to return in April “with recommended criteria for evaluation of hotel proposals to determine which application(s) should be processed through Planning Commission and City Council hearing.”
—David M. Greenwald reporting