Publication Date: Friday, October 01, 2004
Craig Hotel deal falls apart
Craig Hotel deal falls apart
(October 01, 2004) Run-down housing for low-income workers could be rebuilt as an office building
by Bill D'Agostino
The deal to save downtown Palo Alto's Craig Hotel as low-income housing has fallen apart, and the clock is ticking away for another last-minute rescue.
The fate of the 63-room hotel has been up in the air since it closed in June. In August, Barry Swenson Builders and the Emergency Housing Consortium joined forces, prompted by city officials, to make a bid to buy the property. But the cost of renovating the run-down hotel was too high for the developers, and the offer was pulled in early September.
"They couldn't make it pencil," Palo Alto Planning Director Steve Emslie reported.
The price of the original offer has not been disclosed. The property's new owner, Eric Willis, gave the team 30 days -- until the first week in October -- to make a new offer.
"I think it's doubtful at this point," Emslie said. "They're running out of time."
Willis, who purchased the building in May for $2.5 million, is interested in tearing down most of the hotel and constructing a three-story office building. No application has yet been filed with the city. Willis said the building would shrink in size, from 13,000 square feet to 10,000 square feet.
The white, 40-year-old hotel is located at 164 Hamilton Ave., one block from City Hall. Before it closed, it was renting units for $190 a week, but the housing consortium had hoped to reopen it for rents of $500 a month in early 2005.
Representatives from Barry Swenson Builder and the consortium did not return calls for comment.
For those with zero or low incomes, the Craig Hotel was particularly attractive as emergency housing to stave off homelessness, especially since it required no upfront deposit. It was one of the last so-called "skid-row" hotels in Palo Alto, a city where the average monthly rent for a one-bedroom apartment is approximately $1,600.
The building is not in good shape, though. The rooms are tiny and dark; the building has no elevators or sprinklers; it's not seismically safe; the corridors are narrow; most rooms have no bathrooms; and there is only one small, community bathroom on each floor.
"It's not a very safe place for humans to be," Willis said.
Numerous other housing groups had examined the structure, but couldn't find a way to keep it residential because of the high cost of bringing it up to code, Willis added.
"I don't see how anybody can do housing."
Staff Writer Bill D'Agostino can be e-mailed at bdagostino@paweekly.com
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