Monday Morning Thoughts: URP Game Changer on the Hotel Issue Too?

URP-Site-Plan

A week ago if you have asked me about the hotel issue, the calculation was simple.  The Marriott Residence Inn had a huge amount of advantages, including the fact that it was not a controversial location, while the Hyatt House is probably going to draw 100 neighbors complaining about its location and the impact on their homes and neighborhood.

If the council was only going to pick one – and the staff was recommending both – it would have been an easy choice.  You can argue that’s bad planning, but sometimes, perhaps often, the path of least resistance is the easiest way forward.

For the Hyatt House then, the announcement late last week couldn’t have been better timing.  When Mark Friedman and Fulcrum Property announced they were buying Interland, changing it to University Research Park (URP) and looking to the underutilized asset as an opportunity, it was undoubtedly a game changer for the Hyatt House and the city council.

Indeed, a lot has changed in just a month, in the time between when the planning commission voted 4-3 to oppose the Hyatt House, the time after the planning commission voted 7-0 to approve the Residence Inn and last Friday when the University Research Park became a true reality.  Not to mention the announcement earlier in October about Sierra Energy and their expansion of Area 52.

To understand how much the game has changed, recognize that when the folks representing the Residence Inn met with the Vanguard last week, they noted that there was already a market for their extended stay product in the Mace Ranch area.  They cited big companies like Mori Seiki, HM Clause, Schilling Robotics and others that are already on Second Street and in need of space for their business needs.

In the staff report, planning staff note that the Residence Inn “is proximate to businesses such as DMG Mori Seiki, Schilling Robotics, the City’s growing seed business cluster on Cousteau Place, and other companies with country-wide or international connections. The hotel rooms can provide space for visiting researchers and company officials from outside Davis, while the meeting room could support the needs of local businesses.”

The planning commission noted the “proximity to demand generators, including international businesses, sports facilities, and UC Davis.”

All of a sudden, the Hyatt House, just a half mile down the road from the University Research Park, has added demand generators between that and the expanded Area 52 that may call for the same sort of hotel set up where researchers and visiting companies with international connections may need hotel space for extended periods of time to do their work.

On their map, the University Research Park lists two small hotels in close proximity, Holiday Inn and La Quinta Inn – combined, they have 120 rooms.  The Hyatt House would provide expanded hotel inventory, including rooms for those needing to stay for an extended period of time.

In their staff report, the city staff, even before this announcement, noted that the project “is proximate to the Interland office/tech center.”  The hotel rooms, they write, “can provide space for visiting researchers and company officials from outside Davis, while the meeting rooms can support the needs of local businesses.”

This announcement just exemplifies the need.  While some have suggested that the URP could house their own hotel, their spokespeople have told the Vanguard that is not in the plans and, if you look at the site map itself, that would not seem to be a use conducive for the site which already houses the rather large Kaiser-Davis Medical Offices.

But of course the projected increase in demand is not likely to quell the neighborhood’s objections to the Hyatt site.  During the planning commission meeting, several of the commissioners worried about the viability of that site – but the biggest concerns had to do with privacy and neighborhood impacts.

There are concerns about safety and the use of alcohol, but staff noted that “the Police Department does not see a safety issue or impacts to the community from a hotel in this location.”  Nor have they “expressed any concern with the bar operation.”

Privacy impacts to the nearby residents certainly play into the neighborhood objections, as does the utilization of the greenbelt trees as a privacy screen.  The applicants have gone out of their way to address those concerns, introducing a privacy screen as a way to reduce impacts.  They have also added additional buffering, with vegetation on the backside of the lot.

Staff concludes that “the project is not likely to become a nuisance to the neighborhood.”  No doubt the neighborhood will disagree with this assessment.

In the end, the council is going to have to weigh the overall assets to the city against the concerns of the neighbors.  A week ago this would have probably been an easy calculation – the council could add the hotel at the Residence Inn with virtually no opposition and wait for another time to assess the Hyatt House and whether the city needed two new hotels.

Now, with the injection of economic development on both sides of Cowell Blvd., the council will see a much stronger need to add two hotels rather than just one to the community.  Will that be enough to get three yes votes?  Stay tuned.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

Related posts

33 Comments

  1. Grok

    This article reads far to much into this land purchase. It is to early to make the bold predictions that this sale will create the need for another Hotel anytime in the near future. And even if this overblown prediction where true it would not make it more OK to do what is described in today’s article about the Cowell hotel proposal.  http://www.davisvanguard.org/2016/10/guest-commentary-hyatt-house-proposal-rejected-davis-city-council/

    1. David Greenwald

      I conclude this column with this: “In the end, the council is going to have to weigh the overall assets to the city against the concerns of the neighbors.  A week ago this would have probably been an easy calculation – the council could add the hotel at the Residence Inn with virtually no opposition and wait for another time to assess the Hyatt House and whether the city needed two new hotels.

      Now with the injection of economic development on both sides of Cowell Blvd, the council will see a much stronger need to add two hotels rather than just one to the community. ”

      My assessment is that the purchase changes the calculations as the council assesses the two projects, no where did I say this would be determinate.  But to ignore the impact of this purchase is problematic at best.  Things changed on Friday, how much?  We’ll find out tomorrow.

      1. hpierce

        To say the City “has” assets, that are comprised of privately held property, that by implication, are the City’s to control and profit from, is deeply disturbing… and arguably, unconstitutional.

        1. Frankly

          Me neither.  I think you are stretching this “constitutionality” bit.  Let me introduce you to many, many, many communities up and down this great state that own land that is then developed for community benefit, or is sold to a developer to develop for community benefit.

          Care to explain why this is any different?

        2. South of Davis

          hpierce wrote:

          > To say the City “has” assets, that are comprised

          > of privately held property, that by implication,

          > are the City’s to control and profit from, is deeply

          > disturbing… and arguably, unconstitutional.

          The government (local, state and federal) has learned that “taking” out constitutional rights and “selling” them back to us has become “very” profitable so each year they take more and more and get more and more fees and bribes (also called perfectly legal campaign contributions)…

    1. Grok

      I am being realistic. This is what was said in the enterprise, “For the next few months, Fulcrum Property will maintain the status quo as its team goes to the drawing board to re-envision the site.” It will be a little while before we really know what their vision is, and even longer before we know what new tenants are interested.

      I just don’t see this as a reason to rush to approve a hotel project in a questionable location when analysis suggest one new hotel is all the market will support anytime soon, and there is a better hotel project available.

      1. hpierce

        I just don’t see this as a reason to rush to approve a hotel project in a questionable location when analysis suggest one new hotel is all the market will support anytime soon, and there is a better hotel project available.

        There is a concept (actually a State law) referred to as the ‘Permit Streamlining Act’.  It requires an agency to say yes or no to a proposal for land use, in a stipulated amount of time.  To say we’ll consider the proposal you have spent many months or years to prepare, present and defend, then say, we’ll get back to you on that, we just want to see if something else ‘develops’ (pun intended) is BS.  And unfair, and arguably illegal.

        If the answer is no, say so. if the answer is yes, or a yes that has conditions that the developer can choose to accept or walk away from the proposal, say so.

        1. Grok

          For starters the council has 2 meetings scheduled on the hotels. There is no need to rush to approve the Cowell project tomorrow night. In the longer term it is appropriate for the council to vote no on the Cowell project in its current form and location.

          I for one would welcome the project in a better location, or a more appropriate form in the current location. It would also be more desirable to stagger the opening of the new hotels to better allow for absorption without harming the downtown hotels.

          Looking at the article the neighbors published today shows how it could work at the current location if it where fewer stories had the parking underneath.

        2. Chamber Fan

          Here we again – the favoriate word by those who want to “stop” projects is “rush” – the council probably isn’t going to approve the projects tomorrow but if they did, it would hardly be a rush

          “Looking at the article the neighbors published today shows how it could work at the current location if it where fewer stories had the parking underneath.”

          So in other words it would work if the applicants reduced their possibility of profit (by reducing the stories) and increased their costs greatly (by putting underground parking in).  Wow.

        3. Grok

          The developer took a big risk buying cheap land that was not appropriately zoned for the project they wanted to build. The neighbors are offering a workable compromise. If the developers don’t think they will make enough money with a reasonable project on the current location, then they should consider acquiring rights to a more appropriate property for their project.

        4. Chamber Fan

          Hang on a second – if the financials don’t pencil out, by definition, it’s not a workable compromise.  What evidence do you have to support your position it’s workable?

        5. Grok

          The neighbors are not responsible for assuring that a hotel developer makes money, that is the developers responsibility. The developer took a big risk buying a parcel that was not zoned for their intended use. The neighbors are offering workable options, it is up to the developer to decide if they can make  money on the project, but ultimately the developer has to live with the large risk they took by buying the property on the speculation that they could get the zoning changed. If an acceptable alternative  doesn’t “pencil out” that’s on the developer not the neighborhood or the City. The developer took the risk. If it doesn’t pencil out on this site, hopefully the developer can find a better site.

          Who sold the developers this land anyway? What was that sales pitch like? Were promises made regarding the ease of a zoning change?

           

        6. Chamber Fan

          But Grok, you said, “workable compromise.”  When I pointed out what a workable compromise would look like, you moved the goalposts by stating “The neighbors are not responsible for assuring that a hotel developer makes money, that is the developers responsibility.”  That’s fine, but a workable compromise means just that – one that is workable and if the developer doesn’t make a profit, by definition that is not one.

        7. Grok

          ChamberFan, why do you insist that it is the neighbors obligation to find a way for the developer to make money? That is solely up to the developer. The neighbors have offered a workable compromise and the developers have not even responded to them. The developers took on considerable risk when they speculatively bought land not zoned for their intended use. It is unfortunate if what can work in that location won’t be lucrative enough for them, but that is the chance they took. I hope they can find a way to either make it work, or find a different location that is appropriate.

          how do you know what pencils out for the developers? are you on the development team?

          And really, who sold the developers this land anyway? What was that sales pitch like? Were promises made regarding the ease of a zoning change?

        8. Chamber Fan

          Why do you keep shifting the argument?  If something is a “workable compromise” it has be workable for both sides. I don’t know what pencils out for the developer and neither do you, but you keep insisting that something is a workable compromise without knowing.

        9. Grok

          You make the false assumption that the developer making money is some how the neighbors or the Cities responsibility. There is no obligation on the part of the neighborhood for the developer to make money, that is the developers responsibility. The developer assumed that risk that zoning might not be changed to allow for their project when they bought the property. A discussion between the neighbors and the developers should be about how it is appropriate for the land to be used, not whether the developer can make money on what is a workable compromise on land use.

          Seriously. who sold the developers this land? What was that sales pitch? Were the developers told it would be no big deal to get the zoning change? I mean were the developers mislead?

           

        1. Grok

          I agree the underlying assumptions are changing, but we don’t know what the new assumptions will be yet. When we do, more analysis can be done. In the meantime there is no need to approve the project tomorrow night.

        2. Chamber Fan

          I do see a need to approve the hotel tomorrow night.  We need the revenue, the viability of Embassy is uncertain, and we have massive new investment in the area – minimum of $100 million and probably more.

          The only reason not to approve it is concerns about the compatibility with the neighborhood.  That’s a constant not a variable.

        3. Grok

          Chamber Fan, you are of course welcome to your opinion. If “the only reason not to approve it is concerns about the compatibility with the neighborhood.  That’s a constant not a variable.” considering the concerns raised by the neighbors in their well written article that was published today, that is certainly enough to vote against the Cowell project, and your right, by that standard the sale of nearby land is not a factor that would change that.

        4. Chamber Fan

          The neighbors are entitled to their opinion, but most of their inconveniences would occur under the current zoning.  The community benefits more from a hotel than from currently permitted uses.  Bottom line, this is a huge win for the community.

        5. Chamber Fan

          This section was always planned as commercial.  The only change is the type of commercial that will be there.  That’s hardly a mistreatment of a neighborhood.

        6. Grok

          The only change is the type of commercial that will be there. 

          (except that the zoning will have to be changed to allow for double the density from .5 FAR to 1 FAR, and it will have to increase the allowable numbers of floors in the building and the building will have to be given a variance because it is going to be taller than the zoning allows and the South Davis Area Specific Plan has to be changed to get rid of landscape requirements so the hotel can be built with an extreme minimum of landscape and these zoning and plan changes will also effect other empty lots in the neighborhood potentially multiply the newly introduced problems several fold)

      2. Shanetucker

        There are two reports that address, among other things, the feasibility of new hotel rooms.  One concluded that two additional hotels could be supported, the other said there needed to be a period of time between the opening of the hotels.  Many things have changed since those reports were concluded, including the fact that the Embassy Suites hotel (assumed to be open Jan 1, 2017 in the reports) is not going to be opening for years (at best) and now the URP transaction and subsequent development.      Also, as I wrote a couple of weeks ago, HVS and PKF are adept at providing historical and current operating data about hotel markets.  They are generally conservative with their forecast.

        Additionally,  the site for the Hyatt, while opposed by the Rose Creek neighborhood,  is actually the better site, according to the criteria laid out by the city council.        You need to look no further than this statement from city staff regarding obtaining LEED certification to gather how remote the RI site actually is:  “outside of being near transit, the project scores relatively low on site location points given the suburban location. The applicant has voiced concerns that in order to make up the points lost on site location in other categories, the additional costs would result in a project that is no longer economically viable”.

         

        1. Grok

          is actually the better site, according to the criteria laid out by the city council.  

          That’s truly wishful thinking. The planning commission did an excellent job of applying the council criteria and voted against the Cowell project.

        2. Grok

          Your claim that the Planning commission was confused is pretty outrageous. If anything the staff was confused, and the planning commission overcame the problem. The staff actually gave the planning commission different instructions in the Cowell Hotel hearing and the Marriott hearing.

          In the Cowell hearing some of the staff advised the council to use the criteria, while other members of staff advised they did not need to use the criteria. In the end the Planning commission used the criteria as was the appropriate thing to do.

          During the Marriott hearing, the staff advised the Planning commission to use the criteria. There was a very notable speech from the dais by the chair of the commission calling out the staff for their inconsistent and bad advice. He noted that he personally went to the tapes of the City Council meeting where the resolution was passed and that it confirmed that the Planning Commission had acted appropriately on the Cowell Hotel project.

          To characterize this as folding like a cheap house of cards is extremely insulting to the planning commission. In the Face of conflicting advice from the staff, the planning commission did the right thing.

  2. Alan Miller

    The government (local, state and federal) has learned that “taking” out constitutional rights and “selling” them back to us has become “very” profitable so each year they take more and more and get more and more fees and bribes (also called perfectly legal campaign contributions)…

    Casinos in Casablanca ???!!!!?!!!

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
$ USD
Sign up for