With Renewed Interest, Council Looks to Move Forward With New Hotel

For more than a decade, the city has promised that an upscale hotel would accompany the development that replaced the former Navy site near El Camino Real.

After some delays to get the project off the ground, the city is now looking to move forward with a hotel project after a Riverside-based developer has expressed interest in building and financing a hotel on the vacant space of land at The Crossing near El Camino Real and Interstate Highway 380.

In a positive twist to this latest news, the city also learned Tuesday that the owner of the land, the Martin Regis Group, has entered into an agreement on its own with a different developer—wanting to get rid of the property it has tried to sell for so long before the end of the year.

The two potential deals could put the city in a dilemma, but city officials agreed Wednesday night at a special City Council meeting that the dilemma is a good problem to have now that San Bruno has a promise that a new hotel will finally be built.

“A hotel as part of The Crossing project in San Bruno has been a high priority for the city over the past decade,” City Manager Connie Jackson told the council. “And it will not just be a hotel, but a nice place that could host meetings, private parties and weddings. It’s an opportunity this community hasn’t always had.”

The council initially met Wednesday to discuss signing a letter of intent to form an exclusive negotiating agreement with Destination Properties LLC, a hotel developer that has built such high-profile projects as the Disneyland Hotel and the Claremont Resort in Oakland. Destination Properties said it was interested in developing, financing and operating a 150-room hotel—such as a Hyatt Place, Spring Hill Suites or Cambria Suites—on the 1.5 acre vacant site at The Crossing that would include about 4,000 square-feet of meeting space.

But the news about the Martin Regis Group’s deal complicates matters somewhat, Jackson said, because the city now has to decide what is the best option for ensuring that San Bruno’s interests get satisfied.

To give the city some leverage, the council voted to direct staff to look into what options the city might have with purchasing the property where the hotel would be built. With the city’s Redevelopment Agency compromised as a result of Gov. Jerry Brown’s move this year to eliminate all redevelopment agencies in an effort to shore up the state budget, it is not clear how the city would be able to purchase the land for hotel development. The in August, but the city will now have to make a large payment to the state annually to keep the agency in operation.

But Jackson said she was confident the city would be able to purchase the land—at least in some part—or enter into a partnership with a developer to purchase and develop the land.

“We have to pursue the potential of owning the property so we have another finger of control,” Mayor Jim Ruane said before the council took a vote on the matter.

Going forward, the city will be looking into negotiating with the owner of the land, the Martin Regis Group, and Destination Properties to come up with the best deal.

Jackson said the city would be looking to make a decision within the next few months.