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 officialsSAN 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
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