In the latest sign of Palo Alto's surging hotel boom, Marriott has proposed to build two five-story hotels on San Antonio Road that between them would include 301 rooms.
The proposal, which the Architectural Review Board will consider for the first time on June 4, calls for the merging of two commercial sites at 744 and 748 San Antonio Road and constructing two separate Marriott hotels. One would be a Courtyard by Marriott while the other would be AC by Marriott, a brand that is firmly established in Europe and geared toward a more hip, urban and cosmopolitan feel. The two new buildings would be separated by an interior courtyard featuring a swimming pool and a spa, according to the conceptual landscape plan.
Marriott's new hotel complex would replace two small commercial buildings east of Middlefield Road, including the building currently housing the automobile-service shop, Street FX Customs, in a largely commercial area near the city's border with Mountain View.
According to the proposed site plan, each building would be five stories in height. Courtyard by Marriott would have 148 rooms, while AC by Marriott would have 153. The complex would include 235 parking spaces, 186 of which would be in an underground garage while the rest would be in a surface lot.
Marriott's ambitious proposal comes during a booming period for Palo Alto's hotel industry. With the local economy thriving, hotel vacancy rates at historic lows and hotel-tax revenues on the rise, the city has seen a number of hotels recently open its doors. These include the Epiphany Hotel at 180 Hamilton Ave., which replaced Casa Olga last year, and Homewood Suites by Hilton, which has taken over property once occupied by Palo Alto Bowl on the southern end of El Camino Real. On the northern end of El Camino, Westin is in the process of building an annex, a project that is expected to be completed next year.
Another hotel was recently planned for Embarcadero Road, at the former site of Ming's Chinese Cuisine and Bar. That proposal has not advanced, however, and Mercedes-Benz is now pursuing a plan to set up a dealership at the Ming's site. Despite the setback, the city's proposed budget for fiscal year 2016 notes that the city's hotel revenues continue to perform "exceptionally well" and that daily room rates and occupancy levels "continue to demonstrate considerable strength."
Palo Alto officials expect to get about $18.8 million from hotel taxes in the coming fiscal year (which begins on July 1), an increase of 32.4 percent from the current year. The decision by Palo Alto voters last November to approve an increase in the city's hotel-tax rate from 12 percent to 14 percent is expected to add to the revenue windfall. The new rate went into effect on Jan. 1 and is expected to generate $2.9 million in the current fiscal year.
The Architectural Review Board will consider the proposed hotels on June 4 in a preliminary hearings, which means there will be no vote on the application.