The Crossing Hotel Site
With the decommissioning of the U.S. Navy Site and formation of the San Bruno Redevelopment Agency in the late 1990’s, the City envisioned the presence of a hotel on the property located at the southwest corner of Interstate 380 and the El Camino Real. The City Council’s 2002 approval and 2005 amendment of the U.S. Navy Site Specific Plan laid the foundation for a seven-story “flagship” hotel with up to 500 rooms plus restaurant and meeting space. Initial approval of this Specific Plan was supported by the 2001 Measure “E” citywide ballot initiative that increased the height limits for the area, garnering 72 percent of the popular vote.
In August 2007, and as part of the Martin Regis development of the Crossings Site, the City commissioned a market feasibility study to assess the viability of a full-service hotel at the Crossings. This study advised that a full service hotel would not be economically viable in the near or long-term. As a result, the City began to pursue development of a select-service hotel. By doing so, the City was still able to advance its broader objectives of a hotel with at least 120 hotel rooms and a 3,000 square foot meeting space able to accommodate at least 200 persons in banquet-style seating. In support of the City Council and community’s steadfast commitment to a hotel at the Crossings Site, and to complement the future select-service hotel, a new retail parcel was created leading to the development of the retail center and Jack’s Restaurant and Bar.
In it’s continued commitment to bring a select-service hotel to the Crossings, in July 2012, the City purchased the 1.5-acre hotel site from Martin Regis. The Crossings hotel site represents the last remaining vacant parcel within the 20-acre master planned Crossings development. Today, the Crossings includes 1,063 multifamily units in five buildings and a 15,000 square foot fully occupied commercial center, all built within the past ten years.
Last October, the City issued a Request for Qualifications/Proposals inviting written proposals from qualified developers to design, finance and build a high quality, select-service hotel at the Crossing. The City received five proposals. In summary, Marriott’s Springhill Suites and Hyatt Place were the preferred hotel brand, ranging in size between 77,000 to 84,500 square feet with 121 to 149 guest rooms. The hotel proposals ranged between five and six stories in height with an average daily room rate, at year three after its opening, ranging between $145 and $193 per evening. Each of the five proposals requested financial participation from the City.
The City performed an extensive review of the five proposals received by the City which included a review of the qualifications and experience, financial capacity, and the project concept. At its regular meeting on February 26, 2013, the City Council considered proposals submitted by OTO Development and R.D. Olson Development. Selection of a preferred development team was challenging.
Both teams demonstrated a clear and compelling ability to develop, deliver and operate the Crossing hotel. However, given OTO Development’s expansive hotel development and operations track records, as well as their significant financial capacity, the selection team unanimously decided to recommend to the City Council selection of OTO Development. OTO Development is a hospitality ownership, development and management company with a national hotel presence. Most of the leadership, development and operations teams have been working together for over 15 years and have developed 525 hotels in 42 states, including 73 in California. Headquartered in South Carolina, OTO Development has teams located in major markets across the United States, including Washington D.C., Los Angeles, San Diego and the San Francisco Bay Area. OTO Development has been honored by Hilton Worldwide, Marriott International and Global Hyatt with numerous awards and recognitions, classifying it as one of their elite franchise partners for both development and operations. They are currently under development in Manhattan/Madison Square Garden, Washington D.C., El Segundo, Palo Alto and Bellevue and in the entitlement process on additional developments in Washington D. C., Manhattan/Times Square, San Diego, Santa Monica, Napa and Miami Beach.
Since selection by the City Council of its preferred hotel developer, the City and OTO Development have been working together to further refine the scope of the hotel project as well as the nature of the City’s financial participation in the project. Ultimately, it is the City’s goal to minimize the level of public financial participation in the project and to attain the most distinctive, highest-quality hotel project possible. Based on the OTO Development proposal, the City’s participation in the project may include land, fee waivers, and/or assistance with other financing vehicles such as the rebate of transient occupancy tax.
Much work by the City and OTO Development is yet to be performed to bring the hotel to the community. Project design, review and approval will take many months and construction, once commenced, will take approximately 18-months. Each of these important milestones will require City Council review, consideration and approval and thereby afford the community an opportunity to receive updates on the hotel project’s status as well as an opportunity to provide input.