March 06—Developer David Bohannon announced Thursday that he has found a company to build an 11-story luxury hotel complex for his long-awaited Menlo Gateway project, which is expected to revitalize Menlo Park’s industrial district in the Belle Haven neighborhood.
Bohannon told The Daily News that construction is expected to begin early next year and the hotel could open by 2018. The project is estimated to cost $100 million and rooms could go for about $400 a night.
The Bohannon Development Co. is partnering with Long Beach-based Ensemble Hotel Partners, a subsidiary of Ensemble Investments, on the project.
“[Ensemble] seemed to demonstrate an understanding of the needs of this emerging and changing district better than the other folks we were interviewing,” Bohannon said. “They just won the competition.”
The Menlo Gateway project that entails 16 acres along Independence and Constitution drives also will feature three office buildings totalling 694,000 square feet, to be designed by Heller Manus Architects of San Francisco. Their construction hinges on a hotel going up first.
When complete, the project will provide 2,689 parking spaces including parking garages, along with pedestrian walkways and bike paths.
The 193,000-square-foot hotel will feature a restaurant, poolside lounge, 40,000-square-foot fitness center, meeting space and outdoor event center, among other amenities. It’ll be part of Marriott’s Autograph Collection—a brand comparable to the JW Marriott or Courtyard by Marriott—and will be designed by Cunningham Group Architecture.
“In most cases, Marriott brands are already sort of fixed in terms of what the hotel will become,” Bohannon said. “But in the case of Autograph Collection, each hotel is ... independent and one-of-a-kind in its design ... Marriott and Ensemble will hire a branding company that will engage in a process that will involve creating a hotel that uniquely fits the Menlo Park location [and community] that it will be in.”
The two developers intend to hire “a third-party manager, which is fairly typical in the industry, to operate the hotel under their direction,” Bohannon noted. He said a “branding exercise” will come up with an exclusive name for the hotel.
The hotel that goes before the Menlo Park City Council for discussion Tuesday has 250 rooms, or 20 more than the one approved along with the rest of the project in 2010.
Bohannon said Ensemble envisions a “destination” hotel, which is “larger” and “quite a bit more upscale” than the previously proposed one, befitting the “gateway of Silicon Valley.”
“They felt that 250 rooms was simply a better number for what they had in mind, and that the market will easily—and strongly—support a few additional rooms,” he said.
The hotel is expected to annually generate about $1.2 million in room taxes, giving the city a total of about $3.1 million a year from that revenue source alone.
Councilman Ray Mueller said Menlo Gateway could serve “as a cornerstone of the powerful innovation ecosystem blossoming in Menlo Park’s revitalized M-2 district.
“It’s been represented to [the City Council] that the current project proposal provides more transit occupancy tax and results in less traffic impacts than the original design,” he added. “It’s hard to find fault with a slight redesign trying to minimize impacts on residents and increase city revenue.”
Menlo Park Mayor Catherine Carlton agreed, further noting that the city’s schools can benefit greatly by the additional tax.
“It’s always fabulous to support our schools,” she said. “I’m delighted that the project is finally going to get built and [David] seems to be doing so in a way that is sensitive to the community’s needs.”
Vice Mayor Rich Cline said he was “pleased” to see a development that has “come in consistent with our agreement voted by our residents.
“I think the project will serve a much needed hotel alternative on the east side of town,” he added. “Let’s hope to see more community services in the future so that Belle Haven residents can have the same amenities within walking distance that so many folks have in our central and west neighborhoods.”
The establishment was previously projected to be a hotel and health club complex akin to the Marriott Renaissance ClubSport in Walnut Creek. But the concept “struggled” and the Marriott “became disillusioned” and “dropped it,” Bohannon said.
Then, in 2009, “the hotel industry fell off a cliff and no hotels were being developed anywhere for a while,” he noted. In the years that followed, the two- and three-star hotels—those that don’t offer bars, restaurants or meeting rooms—were among the first to recover.
But Menlo Park officials and residents had been promised “a very fine, luxury offering,” Bohannon said. So he remained “patient” and waited for “the economy, the hotel industry, the lending community and all the parts and pieces that go into making such a hotel possible” to rebound so he “could bring forth the best product.”
Menlo Gateway was also augmented by a new neighbor down the road—Facebook.
“Without a doubt, Facebook is a very positive development—they represent an enormous demand and will provide a lot of business to the hotel,” Bohannon said. “I know we had a lot of interest from Ensemble and other full-service hotel developers before Facebook ever showed up but ... I’m also aware that once they did show up, it made it that much more attractive.”
Bohannon indicated that residential development on Haven Avenue and elsewhere has further transformed Belle Haven from what it was in 2010 when Menlo Gateway was born.
“The world has changed in this part of Menlo Park,” he said. It is “a hub of innovation, venture capital and information technology converging ... in what will be a new urban village consisting of new housing, new hotels and new office buildings. And the hotel and its feeling and design will focus on reflecting or aligning with those concepts and notions.”
Email Rhea Mahbubani at rmahbubani@dailynewsgroup.com or follow her at twitter.com/RMahbubani.