This time you cannot blame the forces of “slow growth” or the neighbors. In fact, at their January meeting, the neighbors made their peace with the proposed hotel – gaining a key concession in the rear height and a neighborhood improvement fund.
Instead, the extended stay Hyatt House hotel, with its 118 rooms, which the council unanimously approved, is put on hold due to a competitor.
The “group” filing the suit is “Davis Smart Growth Alliance,” but it is pretty clear, once again the name is an “astroturf” organization. The only named entity is Roshan Patel, owner of the Holiday Inn Express and Suites – a nearby competitor to the approved hotel. Mr. Patel had sent a letter in January threatening legal actions.
He wrote at the time, “The City is adding an unsustainable amount of hotel rooms in inappropriate locations without any new demand generators. This will ultimately lead to devastating effects to existing hotels including but not limited to closures, abandoned buildings, homeless encampments, deferred maintenance, blight, and other environmental issues.
“I’d like to remind the Council that adding hotels without any new demand generators is not going to solve any of the [City’s] financial problems and it is not a community benefit for anyone. Please oppose the Hyatt House Hotel based on Davis’s smart growth policies,” he wrote.
Mr. Patel warned, “If the City continues to ignore my concerns, I suggest the City prepares to govern itself accordingly in the Court of law based on an invalid environmental impact report and breaking zoning and land use laws.”
He argued, “The EIR inadequately addresses potential impacts of urban decay of existing hotels in the community. Additionally, based on section 65860 of the California Planning, Zoning, and Development Laws – I have reason to believe the project is in violation of planning and zoning law as the Hyatt House Davis project is not consistent with the city’s General Plan Land Use policies and the South Davis Specific Plan policies.”
Mr. Patel is represented by Patrick Soluri, from the Sacramento-based Soluri Meserve law corporation. Mr. Soluri believes that the council has basically abandoned sound land-use policies in order to chase revenue.
Here we go again. The Embassy Suites hotel was delayed by a lawsuit that led to a reduction in the size of the hotel and the virtual abandonment of the all-important conference center. The 120-room Marriott Residence Inn at 4647 Fermi Place is also caught in a lawsuit, this one regarding the habitat of burrowing owls.
But this current one seems less about land use or the environment and more about competition.
Last year, the city contracted contracted with HVS Consulting & Valuation in order to get an independent assessment of the hotel market demand. HVS 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 more optimistic study was the PKF Consulting study, which projected that four new hotels could ultimately generate between $1.5 and $2 million in new revenue for the city just by themselves.
They found that 18,000 square feet of meeting space could include between 500 and 1000 attendees, depending on the type of function. “A hotel with approximately 18,000 square feet of meeting space would typically feature between 350 and 400 guestrooms,” they note. 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 argued that at least three new sites can be “readily absorbed by the market,” and they found “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.”
But the conference center is no longer planned at this time to accommodate 18,000 square feet of meeting space, and, in January 2016, when the Vanguard met with existing hotel owners, their analysis painted skepticism about the claims of the PKF study.
While the city is looking to new revenue sources to close huge holes in its budget, existing hotel owners are concerned that new facilities will lead to existing hotels closing and the deterioration of certain areas of Davis.
That fear seems to be at least somewhat realistic, but it remains to be seen whether it is a legally actionable one. Moreover, the council had all of this information at their disposal when they approved the project six weeks ago.
For their part, the city doesn’t believe that the lawsuit has merit. But what it does is, once again, delay timelines for construction and opening the new hotel, delay the receipt of tax revenue for the city, and once again increase the cost of business.
It’s one thing if this is done on behalf of the citizens of Davis. But, in this case, the neighbors have no involvement, they made their agreement with the developers and have made their peace.
Planning by litigation is becoming a fact of life in Davis – and not a good one. The people of Davis elect the city council to represent the interests of the community. We have a long process filled with opportunities for citizen engagement.
It is unfortunate that a monied interest can come in at the 13th hour and derail the process in such a self-serving way.
—David M. Greenwald reporting