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8F Consent 2006 1120
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8F Consent 2006 1120
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Last modified
5/10/2007 11:36:22 AM
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11/17/2006 3:07:33 PM
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CM City Clerk-City Council
CM City Clerk-City Council - Document Type
Staff Report
Document Date (6)
11/20/2006
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PERM
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_CC Agenda 2006 1120
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Path:
\City Clerk\City Council\Agenda Packets\2006\Packet 2006 1120
RDA Reso 2006-010
(Reference)
Path:
\City Clerk\City Council\Resolutions\2006
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<br />524-526 Lewelling OP A Amendment <br /> <br />-Page 2 of3- <br /> <br />November 20, 2006 <br /> <br />These requirements were in response to the situation at The Islander Motel where a portion of the <br />motel converted into what was essentially an apartment building. At the time of the OPA, it was <br />not known that the hotel would operate under the Hilton Garden Inn flag. The flag effectively <br />ensures operation of a quality hotel. The hotel is now operated as a three diamond, full-service <br />Hilton Garden Inn. <br /> <br />The Hilton Garden Inn initially experienced low occupancy rates. The hotel operator approached <br />staff for relief from the prohibition on the TOT exemption in order for them to secure long-term <br />corporate contracts with airlines operating at the Oakland International Airport for out-of-town <br />airline flight crew layovers and airline employee training purposes. <br /> <br />Following a temporary, one-year pilot program to determine if relief from the TOT exemption <br />would generate additional business, the hotel reports strong occupancy levels and generates <br />$250,000 in TOT annually. The airline contracts have had the added benefit of reinforcing the <br />Agency's three diamond rating and requiring limited 24-hour room service and three hot meals <br />per day. Hotel industry experts agree that airline contracts are positive overall for maintaining <br />hotel quality and providing built-in incentives to maintain standards. <br /> <br />Based on the results of the pilot program, staff recommends an amendment to the OP A to <br />eliminate the requirement that all occupants are considered transient and include a provision that <br />the developer agrees to forego future development incentives (which were scheduled to be paid <br />at a rate of $14,000 annually through 2018) in lieu of the foregone TOT revenue owed to the <br />City. <br /> <br />The opportunity for exemptions for long-term transient contracts allows the hotel to compete on <br />a regional basis for airline contracts. If the Hilton Garden Inn were not allowed this exemption, <br />business would go to another hotel; thus, this change will not result in a revenue loss to the City <br />as all other hotels in the area and in the City of San Leandro allow for TOT exemptions. <br /> <br />Staff recommends Agency approval of the Resolution to Approve Amendment No. 1 to <br />Redevelopment Agency of the City of San Leandro Owner Participation Agreement for 524-526 <br />Lewelling Boulevard. <br /> <br />Current Redevelopment Aeencv Policy - Not Applicable <br /> <br />Previous Redevelopment Aeencv Actions - Adoption of Resolution No. 2000-27 of the <br />Redevelopment Agency of the City of San Leandro Approving the Owner Participation <br />Agreement Between the San Leandro Redevelopment Agency, Stanley Boersma, and Amin- <br />Concord, LLC, for Construction of a Hotel and Self-Storage Facility Located at 524-526 <br />Lewelling Boulevard on July 17, 2000. <br /> <br />City Council Committee Review and Action ~ The City Council Business Development <br />Committee discussed the proposed changes to the OP A for 524-526 Lewelling Boulevard at the <br />October 12,2006 meeting and recommended Agency approval of Amendment No.1 to the OPA. <br /> <br />G:\DEPTlAssistant TO CM\Cynthia CMO\HiltonGardenlnn\AmendmentCouncilMemoll-20-06 FINAL.doc <br />
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