Hyatt Rickey's poised for sale, Elks next Hyatt Rickey's poised for sale, Elks next (December 08, 2004)

Rickeys to be developed by Texas home-builder with presence in Bay Area

by Jocelyn Dong

One down, one to go.

Last week, Hyatt Rickey's announced it had signed a contract with Texas home-building giant D.R. Horton to co-develop the 16-acre hotel site on El Camino Real into 185 homes. After certain conditions have been met, Horton is expected to buy the property for an undisclosed sum, according to Mark Solit, who has represented Hyatt Rickey's for years.

Now, eyes are turning to the 8-acre property next door to the Hyatt, which is owned by the Palo Alto Elks and half of which is also up for sale. Like the Hyatt property, it is zoned for housing.

Rumors have been circulating that D.R. Horton could also buy the Elks property, especially after the city sent a letter to the Elks last month recommending it move the lodge to the front of the property rather than keep it in the rear.

If Horton struck a deal with the Elks, it would have 20 acres of land to develop.

City Planning Director Steve Emslie, however, denied his department is maneuvering the Elks to create a combined parcel for Horton.

"They're independent," he said this week of the two projects. The reason for asking the Elks to move forward was to keep commercial enterprises -- which the Elks Lodge is -- located along El Camino, Emslie said.

Likewise, Elks Exalted Ruler Ed Mendell denied that the 81-year-old service organization has been talking with Horton.

"They're not on our short list," Mendell said.

Over the summer, the Elks solicited bids for its land and distilled the offers down to a few, according to Mendell. "They're good offers and serious people and well-known developers," he said.

However, those bids were based on the Elks' plan to sell the front half of the property, which is zoned for 30 homes per acre. The back half, zoned for 15 homes per acre with a strip of one-house-an acre zoning, is considered less valuable.

With a different configuration, Mendell said, "it's like the (city) pulled out the rug from under us. It's like we're starting over again.

The Elks recently hired Nova Partners of Palo Alto, a real-estate development firm, to help them with the sale.

Hyatt's Solit said that dozens of residential developers had been interviewed before Horton, which had been "aggressive" in its presentation, was selected.

Horton built more homes in the country than any other company in 2003 and earned more than $626 million in net income that year, according to the firm's Web site. Locally, Horton has built developments in South San Francisco, Milpitas and Brentwood, among other cities. The company's Milpitas project consists of two- to three-bedroom condominiums and townhomes that Horton is targeting to first-time homebuyers.

Hyatt's concept for its property has included townhomes and single-family residences. In June, Hyatt pushed for the city's approval of an environmental report, which cleared the way for putting the property on the market in August.

Solit said that finding a development partner was necessary because Hyatt specializes in hotels, not housing.

Over the years, Hyatt has had a contentious relationship with the city and members of the adjacent neighborhood, who opposed the housing plan but not a rebuilt hotel. Hyatt later scaled back the number of housing units to the neighbors' satisfaction.

Solit said he looked forward to getting the development process with the city "revved up" again in the new year. a

Senior Staff Writer Jocelyn Dong can be reached at jdong@paweekly.com.

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