Historically, hotel breakeven cost is about 60%. And, realistically annual County hotel occupancy may be closer to 68-73%.*
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| Nice OTO Development hotel in San Marcos, CA but... |
" SAN BRUNO -- Officials here plan to begin negotiations this summer with a South Carolina-based hotel developer, which wants millions in city subsidies to build an upscale hotel on a city-owned piece of land.
OTO Development has preliminarily asked for city "participation" in the estimated $30.1 million project across from Tanforan shopping mall to the tune of up to $3.9 million, including free land, waived permit fees and getting a 50 percent cut of hotel tax for five years.
But that possibility has some local hotel owners crying foul. They want to know why San Bruno should give subsidies to a developer while they built their own hotels without any city assistance. They also point out the market is so hot that San Mateo County hotels reported an 89.8 percent occupancy rate in November." Read article.
Reference - OTO Development, "OTO Development develops upscale select-service hotels in premier markets where the completed hotels will be valued at a significant premium over our total development cost." Related - PR Newswire, Pricewaterhouse Coopers LLP, old information but website is copyright 2013. Hotel Managers Group Blog, "Sunny outlook on San Francisco and Silicon Valley hotel occupancy for 2013." Daily Journal (San Mateo), 3/8/03, "County hotels still suffering." San Francisco Examiner, 1/8/11, "Rise in hotel bookings boon for conty coffers." * The comment above is based upon my recall, not hard current data; but the information seems generally supported in the related articles.
Posted by Kathy Meeh
11 comments:
This is not as generous as what the Four Seasons got out of City of East Palo Alto, though I think they got a 10 or 15 year cut of TOT. The San Bruno hotel market cannot support a select service product, such as Marriott Residence Inn because "the airport environs" is a hotel market is too crowded with select service and limited service properties. Its risky for OTO. This is a relevant article for fix pacifica, because The boutique hotel pad at Beach Boulevard may require a heavy subsidy and free land to build as well, that is, if it is ever built.
Boutique hotel pad, TOT, OTO, LMAO.
Ha, see... it doesn't matter who or where from, these developers you Fixerz so cherish are incapable of doing anything without an enormous helping hand. Hell, with a deal like this, free land, no fees, getting 50% of the TOT on top of everything else I could do this hotel.
Isn't some kind of free land deal part of council's grandiose plan for the site? Gotta be. Nobody's bought it in 12 years. Dear Developer, Free beach front property if you'll commit part of it for a library. Pathetica can't even sell CA beach front property. We shouldn't look down our nose at EPA ever again. Motel 6 for us, Four Seasons for them.
Or you could call your good buddy down in San Jose. You know Barry Swenson.
Maybe we can get the Skyfield USA boys back together again. They were all local guys. Maybe even get Jimmy V back on council.
They had no money, no technology, no skills, no development experience, BTW did I say no money?
San Bruno took control of that parcel right by Jack's Restaurant in order to control what gets built there.
The city of Pacifica thinks they are going to float another 30 million dollar bond to built a library on the beach blvd. site. That is why the hippies are not screaming traffic.
Or they hope some developer will build them a 30 million dollar library with a coucil chamber on top.
Righttttt.
Ocean front property used for a public library and city hall nonsense. So far, hundreds of thousands of dollars spent by this and previous council on two sets of elaborate plans. Producing no income and realistically none should be expected. How many more decades of that? What arrogance and appalling waste of public money by our city officials. Is there some reason other than official stupidity that the property can't be sold to the highest bidder? Worried about our reputation for being anti-development? You should be since you've done nothing to change it. Do your job!
"Is there some reason other than official stupidity that the property can't be sold to the highest bidder?"
Lack of demand.
Demand is returning. Why not put it out there without the constraints of the city's plan and see what happens? Oh wait, we're already out about $700,000 between the previous dreamscape and the current one. Kinda hard for council to stop now. Which pocket did that money come from? There's really only one pocket..ours.
Lack of demand? Things are booming
in the Bay Area but once again nothing for Pacifica. How much of that is self-created by our anti-development reputation and insistence on telling developers what to build at the OWWTP? How can a builder squeeze enough profit out of that site if space-hogs like a library and council chambers are part of it? It will take more than free land to make that turkey fly. Do we really think making public buildings part of the plan will help with the Coastal Commission? And if nothing is built there, then the transformation of Palmetto and the surrounding blight is never going to be more than a few street lamps and planters.
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