Believe it or not, tonight may mark the first real test of the Davis City Council. Unless you want to count the 3-2 vote on August 31 – two months ago, on Gandhi – this is the first hot, local issue of great significance that the council will have to grapple with. For Will Arnold, this is his official christening of his tenure on the city council.
For the last several months, as issues of development and land use have percolated in the community, the council has been in the back seat. Really, their last major decision on this front was the decision to put Nishi on the ballot – that was February.
Since then, the community decided narrowly to vote down Nishi, the community has debated the LRDP, the community has discussed issues like Trackside and Sterling Apartments, and the planning commission has weighed in on the two hotels.
Until a council has to make a decision in the hot box – as we called it, community chambers jammed full of angry people on both sides of an issue – and make a tough call, it is hard to predict. In recent years, we have seen the council make tough calls on divided votes on Mission Residence and Cannery. We have also seen the council make tough calls on unanimous votes on issues that were controversial like the Hotel Conference Center and Nishi.
The council will have an interesting array of decisions to make – perhaps as soon as tonight, though they may push the decision off for a few weeks. The decision was made to put both hotel proposals on for the same night – perhaps a good decision that forces the council to decide the projects in comparison.
One decision will be easy. The second decision of course. The Marriott Residence Inn is largely a no-brainer. No one is really opposed to it. The site looks like a good site for a hotel. It has access to space and the freeway. It is not in close proximity to existing residences.
You would think that council would consider the no-brainer first. That would then make the decision on the Hyatt House simple – does the city need two hotels to be added, and do they need the second hotel to be in the current location?
While the Residence Inn will draw little opposition – perhaps prodding on the issue of LEED Certification – we would expect, based on attendance at the planning commission, that dozens of neighbors will come up to speak against the other project, while a dozen downtown and other business owners will come forward to speak in its favor.
The HVS study commissioned by the city concluded the following. First, “there is some degree of new hotel development opportunity in Davis. Occupancy levels are exceeding historical highs, and average rates have continued to increase year-over-year.”
They point out, “The success of the Hyatt Place hotel further exemplifies this market’s need for quality branded hotels that can complement the needs of the University and its patrons, including visitors, students, employees, and others.”
As a driver, they see, “The growth of the UC Davis has been steady, and future plans call for increased student enrollment and facility development, all factors that bode well for hotel performance.”
The key question they have is “what new demand sources are coming to Davis?”
In the environment of December 2015, they found that “the near-term development of a conference hotel facility with the addition of an extended stay hotel to be developed shortly thereafter poses the option that would be most beneficial to visitors, the City of Davis, other hotels in the market, and the overall community. The viability of a second extended-stay facility within the same development timeframe would potentially compress RevPAR levels enough to question the likeliness of total revenue growth.”
They write, “Our opinion concludes 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.”
Opponents of the Hyatt House understandably have hung their hat on that finding. However, the world has changed. First of all, the development of the hotel conference center on Richards Boulevard is not a certainty. But, more importantly, first Sierra Energy and now Fulcrum’s expansion into the Cowell-Richards Corridor completely changes the nature of new demand growth.
That was the focal point of Monday’s column. Skeptics argue that we have made too much of this land purchase. They argue it is premature to make bold predictions.
In a way, that is not our call. After all, if investors want to risk their money building a new hotel, let them. That said, between Sierra Energy and Fulcrum, we are looking at $100 million in new investment into that area for starters, and a hotel that can anchor some of that business development seems more needed now than it was even a month ago.
The neighbors, of course, see it otherwise. In a lengthy 7000 word piece they made four central arguments against the hotel in that location.
First they argue that the proposed Hyatt House project “is incompatible with the Rosecreek Neighborhood setting.” As one of the commenters put it, the reality is that you are putting a hotel on a frontage road that backs up to a neighborhood separated by a greenbelt.
The incompatibility seems like a lot closer call in reality than it does on paper. You’re talking about a building that is basically the same height as that allotted by the zoning. The usage is probably less invasive than other potential usages.
The density is greater than that allowed under existing zoning, but even that is not as black and white as it seems. The developers and architects have gone a lot way to protect privacy.
“The Hyatt House has falsely misrepresented the nature of their project as a purely ‘extended stay’ hotel to minimize neighbor concerns,” the neighbors claim.
They write, “The 24-hour nature of hotels also creates noise factors even though developer claims extended stay hotels minimize daily in and out travel and associated noise.”
But for all the concerns that this is a 24/7 operation, remember, it’s a 24/7 operation that people have to sleep in. In other words, when I stay in a hotel, if I find it noisy and difficult to sleep in, I’m going somewhere else next time.
The article also argues that they have “misrepresented the extent of the ‘concessions.’”
Here, I think, there is room for further compromise. If the council believes this hotel is needed, they will likely focus their efforts on minimizing impacts to the neighbors. My general sense is that the hotel developers have gone a lot further in their desire to compromise than the neighbors have. The neighbors have generally taken the view of opposition to any hotel.
Much has been made of the 4-3 vote by the planning commission. But, drilling down, there is considerable nuance to that vote. For instance, George Hague said that, while he did not think this was the best location for a hotel, at the same time he did not see the problems with the current site as insurmountable.
Rob Hofmann expressed concern about the poor location, but said that he did not see those concerns as insurmountable. He noted it was commendable that the developers have gone as far as they have to address privacy concerns.
For him, a big sticking point was the resolution passed by the city council regarding establishing criteria for evaluation of hotel proposals. Without this direction, Mr. Hofmann indicated he would probably have gone ahead and supported the project.
The neighbors’ article does suggest a potential compromise: “Many of the Rosecreek neighbors have also stated they would either support (or at least not oppose) a reduced size Hyatt House project if the building were reduced from a 4 story to a 3 story building with the same footprint as allowed under current code (thus reducing the room count to 90 or less) and moving the parking underground.”
There was some debate in the comments as to whether that represents something workable – after all, underground parking adds millions to the cost and reduction in stories takes potentially millions in revenue off the table.
The council will have to weigh all of these considerations. The first question ought to be whether there is a need for the hotel – and again, the hundreds of millions going into this part of town represent, for many, a game changer.
The second question is whether there is a way to get the hotel, make it viable, and mitigate at least some of the neighbors’ concerns. We have seen at times the council ignore the concerns of neighbors, while at other times bowing to them. Each council has been different but, given the revenue possibilities here, this is no small decision.
—David M. Greenwald reporting