Hotels vs. Housing

Seems from the San Mateo Times article that "Burlingame has the same problem":

Developers to favor housing over hotels
Revenue loss a worry for city finance officials

SAN MATEO Many argue that the city needs more housing, not hotels. Finance officials, however, say it's not that black-and-white.
In San Mateo Times today, could this too be a sign of the times for Burlingame? Property owners of three hotels, plus the owner of one site originally meant for a hotel, are pushing for housing on their parcels instead, partly because the hospitality market remains in the dumps after 9/11. A continued loss of hotels worries some in the city's Finance Department. Fewer hotels means fewer hotel tax dollars, a key source of income that boosts the General Fund and helps pay for public safety projects, said Finance Director Hossein Golestan.

The Planning Commission last week approved the conversion of 280-plus rooms at the Radisson Villa Hotel into 135 senior apartments. In May, the commission approved Park Bayshore Townhomes, which proposes to turn the former San Mateo Motel at 801 S. Bayshore Blvd. into 21 townhomes. The owner ran the site as a motel for years, said city planner Lisa Ring, but always intended to turn it into housing.

Bay Meadows Land Company, which currently has its hands full with an upcoming vote on Bay Meadows Phase II, proposes condominiums, not a hotel, on its property at Saratoga Drive and Franklin Parkway. Originally meant for a Hotel W, the building permits expired after the downturn in the hotel market. Owners are now pushing for Bay Meadows Gateway Residential, a 200-plus complex that came before the planning commission late last year.

And AF Evans, owners of downtown's Ben Franklin Hotel, see no other practical alternative for the building otherthan housing. The Oakland-based company submitted an application in June to remodel nearly 100 rooms into 40 one- and two-bedroom condos with a refurbished lobby. The Residences at Ben Franklin is different from the other projects because it didn't contribute to the city's hotel tax. It hasn't housed tourists in a long while, instead playing host to crews from United Airlines until the airline went bankrupt over two years ago. David Bower, AF Evans vice president of development and acquisitions, said the company talked to a number of hotel management companies asking if they were interested in running the hotel, but none was. "It's too bad," Bower said. "It's a wonderful old historic building in a great location, and it's still not worth the investment.

Seventeen hotels and motels in the city contribute to the hotel tax, also known as the transient-occupancy tax (TOT), Golestan said. The hotels charge a 10 percent tax, 8 percent of which goes into the General Fund.
That amounts to $3.1 million in the 2004-05 fiscal year, up from $2.8 percent in 2003-04. After Measure C was approved in 1998, the remaining 2 percent goes toward public safety projects like fire station upgrades and the new police station. Golestan noted that the dip in hotel taxes forced the city to find alternative funding for the new cop shop, slated to open late 2007.

More condos and apartments do mean more property taxes. But it's hard to say whether that additional revenue would completely make up for lost hotel taxes, Golestan said. "We would be concerned if the city continues to lose hotels," said Golestan, acknowledging that Burlingame has the same problem. But Golestan said it's a good sign that hotel revenue continues to increase yearly the department predicts it to jump another 8% in 2005-06.

- Written by Fiona

Comments

[fred]

Well Fiona, it looks like the hotel business is one your group doesn't need to kick around. It seems to be having a hard enough time on it's own.

You can stick to attacking grocers, auto row and art galleries. That is a pretty full plate as it is.

I guess I'd want to look at the draw. I wonder how to get people to visit outside San Francisco. I don't think they'll come to visit auto row, but they may come to visit charming downtowns of various sizes and shapes with good eats to boot.

I wonder if the Chamber has thought of designing a questionaire, and encouraging guests of hotels to fill out the forms in exchange for a free drink, or whatever. I'd like to know the main reasons people stay on the Peninula, and not in the city. Is it cost, is it closer proximity to the airport, tourism (doubtful).

If we look at a destination, like Palo Alto, that has a world class university to visit, a charming downtown, restaurants, museums, parks and trails galore, I can see why people would want to stay and visit a day or two.

[fred]

Jenn you are missing the point. Burlingame isn't having hotel occupancy problems because of the draw. It is the effect of terrorists and the rising fuel costs. Inflation is coming on strong and it isn't going to get any better.

The hotel problem has nothing to do with the city's appearance. Jenn, you cannot turn Burlingame into Carmel-by-the-airport. You have to deal the real economic devices that keep this city a step ahead of it's neighbors.

I know you guys want a pretty city with lots of fun things for families to do and plenty of places to eat and hang out. These are good things to strive for. But you need to have some business to help support the pretty parts of town.

Compare Monterey to Santa Cruz - what is the big difference? Both quaint seaside towns why is one well kept and prosperous and the other one is worn down? One has always welcomed business and the other never had any major industries. That is a clear example of what long term forward thinking leadership does.

Help me with this one, Fred. I'm not sure which you are praising, Monterey, or Santa Cruz? Assuming it is Santa Cruz (?)., don't dump on Monterey so fast. Monterey based most of its economy on the military, (recently departed, I believe.) It does appear dumpy now, because a big hunk of their infrastructure disappeared. It doesn't mean it will be dumpy forever, they'll need to focus more on tourism:in their case, the aquarium, hotels, food, bicycling, kayaking, etc. I'm sorry I am not that familiar with Santa Cruz, but the draw there is the beach, right? Is that the "dumpy one"? I'm not sure I agree about the hotel vacancy problem, though. Americans forget really fast, (too fast). I think terrorism was last year's problem. True, fewer are traveling, but I think that has more to do with fuel, perhaps. There was an interesting article I've just read about how in debt americans are, mortgages and credit cards galore. It explain more the root of our problems. I hope the link works.

[fred]

No, Jenn Santa Cruz is the city in need of some economic improvements. The streets in many areas including the boardwalk are run down and the houses are near tenement status. Monterey has had many various industries. Santa Cruz has relied too heavily on tourism.

The hotel industry is having a nation-wide problem it is not a localized shortage therefore not a draw problem.

Debt levels, interest-only loans and the current zero percent personal savings rates bode poorly for the future of the housing market. But increases in populations expected in California will probably keep prices high.

And it may be true that the auto row doesn't bring tourists into Burlingame but over 80% to 90% of their car sales are made to people who live outside the city of Burligame. So they are bringing many people into the city. Just look at the size of the auto ads in the Sunday Chronicle.

Good that we cleared that up! I know about the car sales here, and that's great if people come in and make a day of it. Look at cars, go eat. Great. I still don't think they will stay in hotels while doing that. Do we have too many hotels, maybe? You can't keep building them if nobody comes.

By the way, speaking of businesses, I thought we'd lost Guittard, but I still smell chocolate, so maybe not. I still don't know how the Virgin Airlines story came out, but I think we lost out on that one, and Gymboree left. What is this city doing to attract these types of businesses? Did anyone ever go after them to find out why they left? If housing is so high here, it makes it hard to sell to outsiders wanting to make roots here. Not everyone has 1.5 million to plunk down for a house.

[james]

The Santa Cruz vs Monterey situation is totally unrelated to anything you are talking about. Santa Cruz is just South Berkeley with a council and city staff composed of burned out leftists. They're not relying too much on tourism, they not even thinking about it if they are thinking at all. And neither one has anything to do with Burlingame.

Your figures about Burlingame tourism are out of date as well. Tourism is pretty much back to pre-9/11 levels and the effect of oil prices has not yet been felt here. It will, but not yet. The real question is what is SFO going to do about attracting an airline that isn't in Chapter 11, like Southwest, Jet Blue or more of Independence's business. Virgin would be a nice bonus, but it isn't doing enough volume to move the meter. Stick to car stuff that you appear to know something about.

[mere-ember]

Anyone who has traveled for business knows that most companies are not sending their staff on those expensive junkets of days gone by. In the past, a business person travelled half way around the world for a two day conference staying in hotels, etc. Companies are much more concerned about keeping those costs down.

... luckily there is teleconferencing!

[fred]

Well, James I agree with you, Burlingame is nothing like Santa Cruz. Burlingame has run similar to Monterey. It has many aspects to it like Monterey and is not just a quaint little leftist run town like Santa Cruz. A leftist CBB run Burlingame is what I fear.

Palo Alto is often used to compare to Burlingame. But, Palo Alto is much larger, has Stanford University and also East Palo Alto (the former murder capital of the world).

So, no city is quite like ours and no comparison will be exactly accurate. But you can find highlights in others situations.

James in regards to my comments about trouble in the hotel business I was basing it on the article at the top of the post. The conversion problem and the TOT problem mentioned. Which are real issues. If you think there are many industries in is as good of shape as pre 9/11, I disagree, I think there are only a few.

James, you know where you can stick it?

Please, Fred, James and Al, Let's keep this discussion high class, not gutter. Calling people or groups leftists or facists or whatever is also false and not getting us anywhere. The threads last week were much more productive.

[Wingnut]

Jen, you asked what the city is doing to get businesses to locate in Burlingame. I think perhaps the city needs to hire a director of new business development since Georgette of the Burlingame Chamber of Commerce is doing nothing. I hear first hand from many small business owners in Burlingame that they are not members of the chamber or have dropped their membership because it is a complete waste of their money. Will someone out there be kind enough to let me know what businesses Georgette has woooooooed here? I think the Chamber needs a new dynamic ( friendly) leader. Georgette has not produced anything except that monthly newsletter which her assistant probably does anyway.

[Bruce]

Are you ready for "BurlinCRUZ"?? Not me!

[Terry Nagel]

Here's an idea I proposed last year but got zero support for from the other members of the council: How about starting a Burlingame Economic Development Commission?

We could enlist citizens with marketing expertise to help put together well-crafted packets of materials designed to attract businesses to set up shop in Burlingame. We could assign council members and members of the commission to visit current business owners to ask, "What could Burlingame do to help your business be more successful?" We could feature local businesses and attractions on the city's Web site, make it possible to shop online for houses and commercial spaces in Burlingame, try to entice movie companies to film in our city (thereby guaranteeing lots of dollars flowing into local hotels and restaurants), run promotions such as "Buy a car in Burlingame and have lunch on us," provide stats on school test scores and other selling points to would-be homebuyers, etc., etc.

Burlingame is a great place to live and work! We would have more tax dollars flowing in if we got noisy about it.

[Resident]

Indeed! Terry - my expectation is that an appropriately-visionary Council will do exactly that once elected in November...

With all due respect, Terry, the answer is not to form a committee/commission. Burlingame is a great location and, unfortunately, it pretty much ends there. Go through the motions of opening a small business downtown. It shouldn't take you too long to find the many obstacles in Carmel-by-the-airport? (very funny, fred). The most glaring is rent. Do you have any ideas on that one?

As for "Buy a car in Burlingame and have lunch on us," why? Who is the us? that's going to pay for this free lunch? In all my years of selling cars in this town, less than 10% of my sales were to people living in Burlingame. Just before driving off in their new car, the vast majority would say something like, Hey, do you know of a good restaurant nearby?? Gimmicks don't work and in this case why give somebody something for free when they are perfectly willing to pay for it?

[James]

Ummm. Don't we have a Chamber of Commerce? Doesn't the city already pay some sum to the CoC for this type of promotion? I'm in favor of auditing those expenditures for effectiveness first. There's been some critique of the CoC on this site, perhaps there should be more.

We have almost nothing in common with Carmel, (but we can learn from them.) For one, we don't respect our trees or our waterways and have very poor access to the Bay. On the positive side, we actually have a sizable population under 65, but that's another topic.

Sean seems to know about selling cars, but he didn't mention what kind of commission a saleman typically gets. I don't have any idea what that is, maybe he can enlighten us. Isn't it such that the commission is split, in one way or the other, with the owner? I'm sure there must be $50 there somewhere to treat the guest, who may or may not be local, to a little treat in town? While they're at it, they might want to stroll around a bit. Guess what, they may tell a neighbor how nice such and such a dealer was. I still remember the incredible gift basket we got at Volvo years and years ago. But this doesn't have to be limited to car sales. Maybe people applying for planning permits for houses or commercial projects could get some freebees that our city purchases at a special discount, just for this purpose. The realtors may have something nice from their commissions to offer. What goes around comes around.

Sean, I think that even when people are willing and able to fork out money for this and that, they do indeed appreciate the occasional gestures, and will remember them. It may sound hokey, but it's a friendly gesture. You want to make our city more approachable than another, right? You used to hear about Hillsborough residents being full of themselves, but now I hear that much more about us!

The rents are horrendous, but there doesn't seem to be much to do about it except wait it out. I think the overlarge spaces are a definite problem and that is one the city can deal with, by limiting size of stores, not types. Pottery barn (if I remember correctly) is 15,000K. It stands where two, perhaps three previous businesses stood. We are losing too many of our small spaces on Burlingame Avenue. Again, another thread.

Jen, if you really are concerned about Burlingame's commerce (and I am not doubting that you are), then take my Terry challenge. Go through the motions of opening a small biz downtown. Don't pretend you're Mr. Macy with millions to play with, just be yourself and have a plan. Make some calls. You can even cheat and go straight to existing small biz owners. Granted, some will exaggerate both the good and the bad, but listen and try and remain objective. I know you're going to be surprised at some of the things you learn if you keep digging.

As far as the car biz, start a thread and I'll be happy to share my experience. I will say that (Kent) Putnum's job is to bring in customers (like you), sell them his product (like your Volvo), and wow them so you tell all your friends to go buy his products. That's just sales. I handed out many a gift basket when I worked at Putnam Volvo. It doesn't even make sense to bring dining into the experience. If you finished your meal at your favorite Burlingame restaurant, how would you respond if they said, Thank you for dinning here and you should go buy a car from insert-name-here?? Or you went to Safeway and they said, Enjoy your purchases and you should buy a house from our favorite realtor, insert-name-here?? Heck, when you bought your house, did your realtor buy you a major appliance of your choice with his multi-thousand-dollar commission?

[fred]

From the Daily Journal Letters to the Editor today:

I was disappointed to see the Daily Journal print a front page scandal sheet? story appropriately headlined Election mud flies in Burlingame? in the Sept. 27 edition. The story about a candidate for Burlingame City Council was based upon decade old court records and a police report sent to the Daily Journal by an anonymous source.

Does an alleged drunken brawl? at a Sharks game and separate $500 infraction? for disturbing the peace over a business dispute, both of which occurred over 10 years ago, really constitute news? worthy of the Daily Journal's front page?

The real story is who used their privileged position within law enforcement to illegally disseminate the candidate's arrest records. In California, arrest records are protected by the right to privacy set forth in Article 1, section one of the California Constitution. (See Central Valley Chapter 7th Step Foundation v. Younger (1989) 214 Cal.App.3d 145 and Penal Code section 11105 and Labor Code section 432.7.)

Moreover, police reports are what lawyers call double-hearsay? nothing more than a police officer's out-of-court recitation of who said what after the fact. Exaggeration and over-statement are common when witnesses give statements in the heat of the moment. That is one reason why the American justice system employs solemn court proceedings and unbiased juries to assess the real truth from witnesses testifying in person and subject to cross-examination.

Mud is all over the place, it only flies? when someone picks it up and slings it. I am disappointed that the Daily Journal exercised such poor editorial judgment in this case and hope they cooperate in an investigation to determine who broke the law and disseminated confidential government arrest records which are supposed to be maintained for investigative purposes not for the purpose of public humiliation.

Dennis Zell