Sunday Commentary: What Should the Council Do about Additional Hotels?

Guneet Bajwa from Presidio Companies discusses Hyatt House at August Planning Commission Meeting
Guneet Bajwa from Presidio Companies discusses Hyatt House at August Planning Commission Meeting

In the past month, the Planning Commission voted down the Hyatt House and unanimously approved the Marriott Residence Inn near Second and Mace.  The council will now have to decide which of the proposals, if any, to approve.

A year ago in November, the city contracted with HVS Consulting & Valuation to prepare an analysis of the Davis hotel market to provide an analytical and objective context to assist the city with the review of the applications for the Hyatt House and Marriott Residence Inn, two of the proposals for new hotels.

The council also approved the Embassy Suites Hotel Conference Facility at the site of the existing University Park Inn & Suites and Caffé Italia restaurant. That site will include a six-story 132-room Embassy Suites Hotel and 13,772 square feet of conference space.

However, that project remains in litigation and therefore has not commenced.

The HVS report came out in March, and it 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.”

Not everyone agrees with this analysis.  Some argue for the PKF Consulting report, contracted by the Hyatt House developers, which saw the potential for four new hotels that would generate between $1.5 and $2 million in new revenue for the city.  At the same time, existing hoteliers told the Vanguard last January they would prefer to see how the market handles the Embassy Suites addition before approving new hotels.

However, the status of the Embassy Suites hotel is unclear at best.  Michael Harrington and company filed a CEQA lawsuit challenging the veracity of a MND (Mitigated Negative Declaration) designation and the quality of the accompanying traffic report for Richards Boulevard.  In July there was indication that the lawsuit was about to settle, but it has not yet – there are conflicting explanations for that.

In the meantime, there have been questions about whether the hotel’s financing is in doubt – the Vanguard has received mixed reports on that with no official clarification.

The bottom line is the hotel is not built.

Despite protests to the contrary by some, the council seems likely to act on the assumption that the city needs one and not two of the extended stay hotels.  Again, this is a bit tricky, given that part of the demand generator for a new hotel would be the hotel conference center.

If we operate under the assumption that the council will follow HVS recommendations, it seems obvious which route they are most likely to go.

The Davis Planning Commission voted 7-0 to approve the Marriott, in a meeting with almost no opposition to speak of.  On the other hand, the proposal for the Hyatt House, as regular readers of the Vanguard are well aware, has been met by strong neighborhood opposition.  In a contentious meeting earlier in September, the commissioners voted 4-3 to oppose the project.

There were a lot of concerns from the neighbors about privacy, and even though the developers proposed mitigation, there were concerns about the reliability of city trees and greenbelts to lessen the impact.  There were also concerns about distance from the freeway, lack of nearby restaurants, and overall viability of the site.

If the council indeed approves just one hotel, it seems obvious which one they would take – as a path of least resistance.

At this point, we at least have to ask the question of what happens if the Embassy Suites does get built and what happens if it doesn’t.

As noted, the new Embassy Suites hotel would have 132 rooms and a huge nearly 14,000 foot conference center.  Given that a large conference could generate the need for 300 to 500 rooms, it seems reasonable to see the need for at least one new hotel to accommodate the overflow.

As the PKF study notes, “A hotel with approximately 18,000 square feet of meeting space would typically feature between 350 and 400 guestrooms.” But the Embassy Suites will have just 132 rooms, which means that Davis will need other hotels to complement the Embassy Suites in order “to capture either overflow group demand that is booked at the Embassy Suites (but can’t be accommodated).”

PKF argues that at least three new sites can be “readily absorbed by the market,” and they find “occupancy is projected to increase to 67.0 percent in 2019 and further increase to approximately 70.0 percent in 2020 and 2021. It is at this level we project the Davis hotel market to stabilize. While this stabilized occupancy level is above the annual average occupancy level achieved by the Davis hotel market since 2007, it is in line with the year-to-date performance and is reflective of the growth occurring in Davis.”

Again, HVS sees a more modest need for hotels.  But what if the Embassy Suites doesn’t get built for another five years?  Can the current market  sustain even one new hotel, absent a conference center?

These are critical questions.  It is clear that the city needs at least one conference center.  There is simply a lack of space in the city to accommodate large conferences.  The Vanguard knows this as well as anyone.

While UC Davis has a conference center, and the Vanguard utilized it once, even with the facility itself donated for use by the university, the rules and regulations made the event more costly than off campus.  In the city, unless you want to rent the Veterans Memorial or Senior Center Multipurpose Room, finding space for large gatherings is difficult and those sites are both limited.

As a consumer, I would argue that not only does the city desperately need one hotel conference center – two would probably be well-utilized and become demand generators for more hotel usage.

In the staff report for the Marriott it notes, “This area includes one other vacant parcel that could potentially accommodate hotel or conference center use, subject to property owner interest and City approval of any Conditional Use Permit application. However, no interest has been expressed for hotel development by other property owners in the designated area.”

Getting someone to finance another hotel conference center would be a tricky proposition, but it might be needed, particularly if Embassy Suites has difficulty bringing theirs to completion.

The key considerations at this point are: where does the Embassy Suites project stand?  Do we need zero, one or two additional hotels?  Is an additional hotel viable without a conference center?

—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.

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  1. Davis Progressive

    seems like a no-brained at this point.  go with the path of least resistance.  of course if we don’t get the revenue, everyone will eventually pay for it.

  2. Frankly

    My company has outgrown our conference room.  I had a company meeting last week and the only meeting space I could find available was a room in the Hallmark.  It wasn’t a nice room. No windows.  Basically it was a box.  It worked for the meeting, but it was not ideal.

    Also, my out of town staff and partner were scattered to different hotels in town because no single hotel was big enough and had enough rooms available to accommodate us.

    And then I had to make dinner reservations for a party of 15-20 people.  Good luck with that.  We ended up at Ket Mo Ree and a few of my Davis employees dropped off because they don’t like Thai food… or were sort of sick of going to that place again.

    Davis needs more hotel and meeting space.  It also needs more sit down service restaurants with space for larger groups.  Lastly, it needs more business in town to leverage these things and support them.

    We need all of that so just start somewhere.

        1. Chamber Fan

          Agree with Frankly – start anywhere.  Move the ball forward.  Stop deliberating.  The neighbors did real damage to this community with their opposition to the hotel at Hyatt House.

          Doby: Not sure what you mean by clear summar of the long version?

        2. DTDavisite

          I think building more hotels in Davis would be a good thing. Its really more a question of where they should go. What bugs me though is statements like this

          The neighbors did real damage to this community with their opposition to the hotel at Hyatt House.

          Based on what I hear happened at the planning commission it sounds like the neighbors had a point, and yet they get trashed here by an anonymous poster. I wouldn’t go so far as to say the developers “did real damage to this community” because that is way over the top language, but I would say the whole thing could have been avoided if the developers had gotten options on a property that was more appropriate for the project they wanted to build instead of buying a property that had very real shortcomings.

          It was a big risk the developers took when they sunk their money and credit into such a risky property, but they are professionals and they must have known they were taking the risk. I hope they can recoup and bring a similar proposal in a better location.

    1. Matt Williams

      Frankly, I don’t disagree with your basic point that Davis needs more hotel and meeting space.

      However, with respect to your restaurant comment, the patio at Mustard Seed could have accommodated 15-20 easily.  Thai Recipes could have as well.  Seasons has a back room that fits 15-20 I believe.  My new Go-To restaurant Yakitori Yuchuan could easily have accommodated 15-20 and you would have gotten superb food and drink.  Huku at El Macero Shopping Center would have been another great choice.  Jack’s Urban Eats at the Marketplace probably could have worked with you as well.



      1. Chamber Fan

        Speaking of which – I don’t understand why the staff report says the Marriott is near restaurants, I think there is only one restaurant there and it’s crappy.  You’d have to walk over the Mace overpass to get to Taco Bell or MacDonalds.

        1. Pam Nieberg

          To add to Matt’s list, we have had parties of as many as 25-30 people at Symposium in the back room.  Just have to let them know in advance and they will set the room up for you.  Sometimes we had the whole room to ourselves.  And they have great Greek food, pizzas and salads.

    2. Tia Will

      Davis needs more hotel and meeting space.  It also needs more sit down service restaurants with space for larger groups.  Lastly, it needs more business in town to leverage these things and support them.”

      This sounds like a build it and we hope they will come argument. I do not dispute that you feel that your business does not have ideal meeting space, but if you truly believe that more businesses in town would be needed to support the increased meeting and hotel space, it starts to look more to me like because you want something, you have defined it as a need.

  3. Eileen Samitz

    It looks very clear to me that the hotel situation is not hard to decide. The Mariott’s is a clear “Yes” because it is in a great location just of the I-80 ramp, close to shopping center and easy access and egress. It also passed all of the City Council criteria for evaluating hotels from their resolution. The Planning Commission voted for it unanimously to move forward as a result.

    The Hyatt on Chiles is a clear “No” since it is a terrible location, failed many of the City Council’s hotel criteria, and brings too many impacts to a neighborhood. The land use designation should remain business park because that can work there and folks bought their homes their accepting and expecting that. As a result, the Planning Commission voted it down and that was clearly the right decision.

    All of this was explained at both Planning Commission meetings and this information was fledged out thanks to Commissioner Marilee Hanson, who did and enormous amount of research on both of these hotel proposals and gave compelling presentation’s including a very informational power-point.

    Finally, since the studies evaluating the feasibility of how many hotels can co-exist now clarified that we can add one more now but not another one for at least 5 years. So Marriot’s should move forward and the Hyatt should not.

    1. Mark West

      “Marilee Hanson, who did and enormous amount of research on both of these hotel proposals and gave compelling presentation’s including a very informational power-point.”

      I thought Commissioner Hanson’s presentation, while perhaps well meaning, was superficial, uninformed and unprofessional.  There is a reason the City pays qualified consultants to supply professional and informed analysis when there are important questions to consider. In my opinion, any Commissioner who made their decision based on Commissioner Hanson’s analysis is not qualified to be on the Commission.

      1. commonsence

        The commissioners made their decision based on the criteria for evaluating hotles approved by the city council this year.  Marilee used that list to organize her research.

        The same criteria was used by the planning Comission to approve the Marriott.

      2. Eileen Samitz

        Mark West,

        Sorry that you did not agree with the Planning Commission’s decision that the Hyatt proposal should be denied for many reasons. The Hyatt did not pass the the majority of the City Council’s criteria for evaluation of hotel’s in their resolution was a major part of that decision.

        Commissioner Hanson was not only professional, but fully understood the project and was thanked by the other commissioners for sharing the information she brought so that they fully understood the project. For instance, the Planning Commission Chair was shocked that City Staff member Katherine Hess (who was primarily responsible for the report) had not even mentioned the City Council’s recent resolution to evaluate hotels in the staff report, and it was literally the last two pages of the very thick staff report. Now wouldn’t one think that that would be the first thing to discuss rather than burying it at the every end of the packet?

        And so when the Commission went through the criteria and it was pretty clear that the Hyatt failed the specific criteria put forward by the City Council. This need for this criteria was reiterated in the next Planning Commission meeting by the Chair. And when they went though the criteria, the Marriot’s proposal passed with flying colors and the Commission voted unanimously.

        So Mark, please stop with the personal attacks on Commissioner Hanson. You may not agree with the decision of the Planning Commission, but stop attacking the one commissioner whose time and effort to understand the facts was appreciated by the entire commission and the public.

  4. Edison

    Aside from the excellent points made by the Vanguard and others, there are other reasons to support the Marriott proposal. It is in a commercial area, and has nearby services that someone staying at a long-term residence facility might need: 2 banks with ATMs, a Target across the street that offers food and sundries, etc. (Plus, a Starbucks inside Target.) Admittedly, only one restaurant nearby (Beach Hut Deli), but excellent freeway access and Sac Int’l Airport is easily accessible by driving north on Pole Line Road to I-5.  I’ve stayed in Marriott properties coast-to-coast throughout the U.S. and Canada, and have uniformly found them well managed and maintained.  The Hyatt developers evidently look at the Council’s criteria for evaluating hotels but decided to go forward anyway at their own peril. The Marriott developers obviously looked a the criteria and made a better investment decision.   I drive past the Marriott site at least 3 times a week on my way to Get Fit Davis, and I find it hard to conceive how the Marriott would negatively impact traffic to any appreciable degree.  I hope this proposed project will quickly come to fruition.

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