Palo Alto Weekly

News - October 10, 2007

Wave of hotels in city's future

Three hotels expected, more may come

by Sue Dremann

Three hotels — and possibly more — may bring at least $2 million a year in tax revenues to Palo Alto's coffers, city officials hope.

Plans for a luxury hotel at Stanford Shopping Center, an extended-stay hotel to replace the Palo Alto Bowl and Motel 6 on El Camino Real and a possible combination extended-stay hotel and restaurant on the current Ming's Restaurant property are being explored, according to city officials and developers.

The hotel-building wave is being aided by a spike in hotel occupancy in recent years. Revenues from the hotel transient-occupancy tax rose 6 percent last year, according to planning commissioner Pat Burt.

It couldn't come soon enough, say some city officials and residents, who are still bemoaning the loss of Rickey's Hyatt and its tax revenue. To recoup some of the funds, city officials are asking voters this November to approve an increase in the city's hotel tax from 10 to 12 percent.

The Stanford hotel would include 120 rooms with restaurant, bar, conference and meeting-room facilities. It is part of an overall proposed expansion of Stanford Shopping Center by the Simon Property Group, Inc., the mall's owners.

The hotel would cover 120,000 square feet and rise to 54 feet in height, according to the preliminary development plans. It would primarily serve Stanford University, Stanford Medical Center and the shopping center. Its location is proposed for either the corner of Quarry and Arboretum roads or the corner of Quarry Road and Pear Lane.

Preliminary estimates of annual revenue expected from the shopping center hotel alone are $800,000 to $960,000, according to Palo Alto's Assistant Planning Director Curtis Williams. And the less-pricey 125- to 200-room hotel considered for the Palo Alto Bowl/Motel 6 location is projected to bring in $1 million a year in taxes, according to Ryan Leong, development manager with SRM Development, which is partnering with Barry Swenson Builders on the project.

The Palo Alto Bowl/Motel 6-site project is still in the planning stages, but the developers are considering TMH Hotels, a Wichita, Kansas-based management company known for its Residence Inns and Hilton Garden Inns, among others, he said.

Leong said the developers are looking at a moderately priced, extended-stay hotel. Such hotels can be cash cows, since longer stays mean lower labor costs and such hotels offer fewer costly perks, according to industry reports.

The development would also include 50 town homes on the back portion of the approximately 3-acre property, he said.

The Ming's hotel is still being explored, according to owner Vicky Ching.

"It's far, far away," she said.

Ching estimated firm plans for a hotel/restaurant complex at the Ming's site on Embarcadero Road east of U.S. Highway 101 would not materialize for at least three years.

Ching is reticent to discuss the project, since a small mention in the news some months ago created some fear among a few clients who booked banquets that Ming's might close, she said. Ming's books many banquets at the restaurant and has no plans to change its services, she said.

"We're not in a hurry to have a hotel because the restaurant is still doing OK. If we have a hotel, we would have a smaller restaurant. At any rate, we would have an interim site if we build," she said.

Ching said that as China becomes increasingly prosperous and with the Asian tourist market growing, she expects an extended-stay hotel might be worth exploring. The combination of a family-style hotel with the restaurant could be a winning combination, she said.

"Every major chain is considering (an extended-stay hotel)," she said.

Planning commissioner Burt said hotels make sense as part of Palo Alto's overall goal to be a destination city. The hotel market is the strongest it has been since the dot-com bust, he said.

Two years ago, hotel occupancy rose 1 percent, compounded by a 1-percent increase in the average hotel room price, he said.

"The city got a 2.5 percent bump in revenue," he said, with the average room rate being $150 per night.

Hotels impact less on communities, too, according to Burt. Traffic generated is the lowest of any use and most of those trips are not at peak hours. The hotels offer the best opportunity in the long run for added revenue, he said.

Staff Writer Sue Dremann can be e-mailed at sdremann@paweekly.com.

Comments

Posted by Too much traffic, a resident of Downtown North
on Oct 10, 2007 at 9:25 am

I am not sure building more hotels in PA is a good idea. We should discourage new hotels and the hotels that are already in the city.
they create too much traffic.


Posted by Citizen, a resident of Midtown
on Oct 10, 2007 at 9:49 am

Too Much Traffic - Are you crazy? Hotels generate tons of taxes on out of towners and we don't have to increase expensive services, like schools. This town needs more car dealers and hotels and less new housing. Its the constant NIMBYism that kills projects like the new Hyatt and results in more tightly packed housing (like what actually happened to the Hyatt site). Exactly what are you going to do to "discourage the hotels already here" - they are already subject to a fat hotel tax that is gravy for the City.

To the PA City officals - please don't screw this up or kill it in the "Palo Alto process", just try for once to act like rational government officials. Just think "what would Mountain View do" not "what would Bezerkley do"


Posted by Too much traffic, a resident of Downtown North
on Oct 10, 2007 at 9:57 am

Citizen--unfortunately when you write online it is hard to convey sarcasm--I was being sarcastic. Though i am sure you will hear that complaint from many people, including one notable member of the city council--who's entire career in city politics has been one long whine about "too much traffic".
But rest assured you will hear about the PA Bowl remodel from the neighbor in that area and you will certainly here from people about any remodel of Ming's (in fact i think a few years back something was proposed for that area and the city council did not like it's appearance).
All of these projects, will unfortunately, be caught up in the PA Process unless their is a serious change in the mindset of the council.


Posted by Citizen, a resident of Midtown
on Oct 10, 2007 at 10:58 am

Who cares what happens to the Mings site? Do garbage, golf balls and airplanes have the right to vote? There are no houses near Mings - so start the construction now.

Given the typical views on this board, its was hard to realize that you were sarcastic, since you sounded like a typical PA resident.


Posted by Too much traffic, a resident of Downtown North
on Oct 10, 2007 at 11:03 am

My point exactly, Citizen, my sarcastic response was exactly like the serious response you get from PA citizens and which the city coucil appears to listen to.
Regarding the Ming's site, if I remember correctly the council was unhappy with the appearance by the exit from 101!!! After all they would not want PA to look like any other city--we are special.


Posted by Read carefully, a resident of Leland Manor/Garland Drive
on Oct 10, 2007 at 9:58 pm

There are 50 housing units (hidden) in the middle of the story.
So it's a major housing development too, not just a hotel.


Posted by Always traffic, a resident of Midtown
on Oct 11, 2007 at 7:01 am

50 housing units on the Mings site, I wonder if they're BMR units? Perhaps that's a good place to put the 3,500 BMR units ABAG wants us to build.


Posted by Danny, a resident of Palo Verde
on Oct 11, 2007 at 8:46 am

Looks good to me - buuild 'em - hotel, BMR's, and all.


Posted by Read carefully, a resident of Leland Manor/Garland Drive
on Oct 11, 2007 at 9:06 am

Who said anything about BMRs? You made that up.


Posted by Lower Impact, a resident of Community Center
on Oct 11, 2007 at 10:51 am

I guess I would be OK with adding all this new hotel business if the city could require the hotels to comply with some standards for green business and green building.

That could in fact be a real opportunity for the hotels to showcase new standards and differentiate*. After all, Palo Alto, Stanford, and Silicon Valley are known as centers of innovation. Let's walk the walk, and help newcomers to fall in stride with our pace.

(*In the hospitality business, brand differentiation and customer experience are key business drivers.)


Posted by Worried Ming's fan, a resident of Another Palo Alto neighborhood
on Oct 11, 2007 at 4:52 pm

Can someone please fill me in on the Ming's remodel? Is it going to close?


Posted by k, a resident of Duveneck/St. Francis
on Oct 12, 2007 at 5:45 am

We already have way too much traffic at the intersection/on ramps of Embarcadero and 101 for a long term stay hotel or God forbid a huge condo complex to be placed at Ming's.

Some of us PA citizens live right on the other side of the freeway, incidentally, in the Duveneck St Francis neighborhoods and we are already heavily impacted with city traffic.


Posted by Vivian, a resident of Midtown
on Oct 12, 2007 at 7:05 am

It would probably be a better idea if we closed down Mings and the two auto dealerships at Embarcadero and 101, that way there will be less traffic to disturb the residents of Duveneck/St. Francis neighborhood.

If you do not want to be impacted by city traffic, then move to a rural area. Or lobby the city council to ensure that traffic can flow smoothly on main arteries, instead of trying to turn every main street in this city (Charleston, Embarcadero, Middlefield) into 1 lane streets.
The traffic will not go away--it will just move to side streets.


Posted by Precision Cabinets, a resident of another community
on Nov 14, 2007 at 3:28 pm

I think it's a great idea, maybe we can supply the cabinetry.


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