External view with privacy screen/ rendering by HRGA
by Carl Boyd, Alan Pryor, Lisa Sanders, Gregg Schwab, Levi Souza, and Carol & Tennis Tollefson (all Rosecreek neighborhood residents)
Introduction – We are a group of residents living in the Rosecreek neighborhood in South Davis. Our neighborhood is bounded by Cowell Blvd and the I-80 Freeway to the north, Drummond to the east, and Lillard to the south and southwest where it intersects with Cowell and Poleline Rd at the Oakshade Shopping Center (Safeway). Our neighborhood is almost all one-and two-story single-family homes with a few one-and two-story duplexes and apartments on the far south and east side of the neighborhood. There are also two 2-and 3-story low income housing developments on the far east side where Drummond intersects Cowell.
The Hyatt House project is proposed on the South side of Cowell Blvd and backups up directly to our neighborhood separated only by a narrow greenbelt pathway. It is proposed to be a 4-story, 120-room hotel on 2.031 acres. This was originally promoted as an entirely extended stay hotel, but the applicant has been changing the mix of extended stay suites vs. more short term stay standard rooms.
A coalition of dozens of residents of the Rosecreek neighborhood object to the proposed Hyatt House project based the following concerns:
Neighborhood Compatibility Issues and Lack of Flexibility and Accommodation by the Developer
The proposed Hyatt House project is incompatible with the Rosecreek neighborhood setting.
The Hyatt House proposal misrepresents the nature of their project as a purely “Extended Stay” hotel.
The Hyatt House proposal misrepresents the extent of the “Concessions” claimed to have been made to appease neighborhood complaints.
The proposed Hyatt House project and location scores very poorly when considering the Council’s site selection criteria for hotels
Zoning Considerations – The Proposed Hyatt House Project May be Violating Prohibitions Against “Spot Zoning”
Uncertainty of Market Demand and Financial Benefit to the City
There is uncertain evidence that demand for a 2nd extended stay hotel in Davis exists.
The financial benefits to the City are uncertain.
The Hyatt House may be predatory to downtown hoteliers and diminish downtown economic viability.
Traffic Issues and CEQA Compliance
The Hyatt House Traffic Study is flawed and underestimates traffic impacts.
The Hyatt House is attempting to use the existing Greenbelt as mitigation for noise & privacy neighborhood concerns.
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NEIGHBORHOOD COMPATIBILITY ISSUES AND LACK OF FLEXIBILITY AND ACCOMMODATION BY THE DEVELOPER
The Proposed Hyatt House Project is Incompatible with the Rosecreek Neighborhood Setting
Large hotel owners like their properties to be within very short (even walking) distances from amenities such as food and retail shopping, fast food and restaurants, and gas stations. They are also almost always located within a short distance of a freeway exit and potential work sites or entertainment venues which serve to draw out-of-town visitors. And they are always well away from single-family homes.
During the recent Planning Commission meeting in which the proposed Hyatt House project was rejected by a 4-3 vote, photographic evidence and site survey results were shown demonstrating that every single upscale motel/hotel on I-80 between West Fairfield and West Sacramento met these criteria. They were always located near a I-80 interchange with a variety of amenities within walking distance. There was not a single hotel that bordered a single-family home residential neighborhood. (See http://www.cityofdavis.org/city-hall/city-council/city-council-meetings/meeting-videos and scroll down to Planning Commission – September 14 to view the streaming video or download the mp4 file to view this Commission Meeting).
The presentation also included views of Days Inn as the only Davis hotel that bordered a residential neighborhood. However, the difference between Days Inn and the proposed Hyatt House is that Days Inn is only a single-story building with a one-story wall surrounding it and the adjacent neighbors are in a 2-story apartment building. Thus, no one from Days Inn can peer down onto single family homes/yards as would be the case with the proposed Hyatt House Hotel.
In further contrast to the proposed Hyatt House, the proposed Marriott on Fermi and 2nd St near Mace Blvd. would be separated from the nearest residential neighbor multi-family apartments by both 2nd St and a gas station and vacant lot and does not present any of the privacy concerns inherent in the Hyatt House proposal. There are also many more amenities within a short walking distance from the proposed Marriott compared to the proposed Hyatt House and it is much closer to the numerous industrial draws on 2nd St. including Mori Seiki and Schilling Robotics.
The Hyatt House has Falsely Misrepresented the Nature of their Project as a Purely “Extended Stay” Hotel to Minimize Neighbor Concerns
The 24-hour nature of hotels also creates noise factors even though developer claims extended stay hotels minimize daily in and out travel and associated noise. In fact, the Hyatt House development team has continually misrepresented the project to local residents, Staff, and Council. In all of the early discussions of the development team with local residents and the Planning Commission, the public was told that the project was an “extended stay” hotel and would thus attract a less transient client base and generate less traffic. Almost all of Staff’s references to the hotel in their various reports to it as an “extended stay”. The applicant has also repeatedly said that this hotel will not be predatory to existing hotels because it is a different market segment – i.e. extended stay and they and Staff continually refer to it as such.
That is somewhat misleading because the developer has since stated they expect to substantial numbers of overnight traveler visits. Indeed, the owner of the the proposed project’s next door neighbors, the Davis Diamonds, stated that would like to hold tournaments with a hotel right next door. The developer is putting in a substantial number of studios without kitchens. Full suites with complete kitchens is what is characterized as an “extended stay hotel”. Promoting the Hyatt House project as a full “extended stay” hotel, when most of the rooms are actually designed for short term occupancy, is a “bait and switch”. This is in stark contrast to the proposed Marriott Residence Inn in which, they claim, all units are full suites truly set up for extended stay with kitchenettes.
It is also important to note that just because the Hyatt House development team is proposing a Hyatt Hotel now, once the project is rezoned and approved for hotel use, there is nothing now to prevent the development team from flipping the newly entitled property to a new developer who could then come in and instead propose a Super 8 motel or a similarly low end hotel.
Thus far, no evidence has been submitted indicating that the development team has executed a standard Franchise Disclosure Document with Hyatt Corporation committing them to the project. In contrast, the Marriott Development team has indicated that it has signed such an agreement with the Marriott parent corporation so it is a much higher likelihood that the City of Davis will actually get what it is expecting with the Marriott proposal.
The Hyatt House has Misrepresented the Extent of the “Concessions” They Claimed to Have Made to Appease the Neighborhood Complaints
The proposed Hyatt House developers have made great claims about their outreach to the local neighbors in the Rosecreek neighborhood stating they have even gone to great lengths to redesign the project to overcome the objections of the neighbors. This is not true.
What residents of the neighborhood have consistently said is the proposed Hyatt House is way too large and too high for the limited lot size and proximity to single family homes. We claim that this massive structure invades the privacy of the neighbors immediately to the south of the site and is inconsistent with the character of the other buildings in the neighborhood. Indeed, almost every single square foot of the two-acre site is filled with the building footprint and parking, to the extent that the Hyatt House team is requesting a special variance to allow it to put in much less landscaping on the premises than would otherwise be required by code. If ever approved, there will not be any full green buffer on any sides of the project.
The proposed Hyatt House is functionally the same size with almost the same number of parking spots as the proposed Marriott, but the Marriott is being proposed for a 3-acre site whereas the Hyatt House is being shoe-horned into a 2-acre site.
As an aside, the promoters of the Marriott site have publicly stated that they previously looked at the Hyatt House site and rejected it prior to the purchase by the current owners because they deemed the site to be simply too small for the scope of the project. Many of the Rosecreek neighbors have also stated they would either support (or at least not oppose) a reduced size Hyatt House project if the building were reduced from a 4 story to a 3 story building with the same footprint as allowed under current code (thus reducing to room count to 90 or less) and moving the parking underground.
In response to neighbors concerns about the impact of the large structure on the adjacent neighborhood, though, the Hyatt House proponents proposed to keep the building height and footprint almost exactly the same but simply moved the building a few feet further towards Cowell, while moving almost all of the parking and the pool to the back of the building and even closer to the adjoining neighbors. Given the associated noise with cars at night and very early morning and sometimes raucous pool behavior, this only increased the concerns of the neighborhood.
Further, because of the complete lack of any additional space on the site to offer any buffer between the proposed hotel and adjacent neighbors, the Hyatt House proponents are actually proposing to use the narrow greenbelt itself as their mitigation for aesthetic, noise, and privacy impacts on adjacent neighbors. This is completely inconsistent with the intentions of CEQA and opens the proposal to potential CEQA challenges along with other aspects of the proposed project as further noted below.
Many of the adjacent neighbors have noted that some of the large mature trees on which the Hyatt House project is relying for mitigation are actually in quite poor health due to over-crowding of trees along the greenbelt (confirmed by the City arborist, Rob Cain). There is real concern among the neighbors that the failing health of these trees and/or construction trauma will force their removal in the future thus exposing these neighbors to even more line-of-sight concerns than now exist. The Hyatt House project applicant has not agreed to any commitments to replace these trees should they be subject to an untimely demise or otherwise agree to some binding mitigation measures. Even if they did agree to some bonding mechanism to assume this cost responsibility, it would still be decades before the trees grew large enough to offer any substantial line-of-sight protection for these immediate neighbors should these trees die in the future and thus require replanting.
The Proposed Hyatt House Project and Location Scores very Poorly Against Council’s Site Selection Criteria for Hotels
On April 19, 2016, Council approved a specific set of criteria to be used by the Planning Commission and Council to evaluate the two pending hotel proposals from the Marriott and Hyatt House development teams.
Following are the site-specific criteria followed by our analysis of the deficiencies of this Hyatt House project in meeting these criteria
A Proximity to Demand Generators, including International Businesses, Sports Facilities, and
UC Davis.
B Pedestrian and Bicycle Access and Accommodations, including Loaner Bicycles.
C Visibility and Accessibility from Interstate 80.
Site Location, Product Characteristics and Amenities and Desirability for Extended Stay Travelers (Restaurants, Groceries, Neighborhood Services, etc.)
E Proximity or Access to Public Transit.
Proximity to Residences and Neighborhood Compatibility
G Existing Zoning.
In its Staff Report to Council on the project, Staff analyzed all of these criteria with non-surprising positive reviews. However, much information was intentionally not disclosed in this Staff Report as further discussed below.
A. Proximity to demand generators, including international businesses, sports facilities, and
UC Davis. – Most of the major, high employment international businesses in town that would receive business visitors are actually north of I-80 like Mori Seiki and Schilling Robotics. These companies would be better served by the proposed Marriott Hotel at Fermi and 2nd St. Although the proposed Hyatt House would be closer to downtown Davis and UCD as the crow flies, access to either requires travel through the already extremely congested Richards Blvd. corridor and/or the downtown tunnel. In contrast, travel to downtown from the Marriott can be down either 2nd St. or 5th St and access to UCD can be via I-80 and utilizing the Old Davis Rd exit. Both downtown and UCD access from the Marriott can thus be achieved by avoiding the Richards Blvd Corridor.
B Pedestrian and bicycle access and accommodations, including loaner bicycles. It is unlikely any business traveler staying at the proposed hotel will use walking as a primary mode of transportation to either the Oakshade or Nugget Markets Centers because they are a 15 minute or greater walk. Pedestrian access to Target and related stores would be less than a 5 minute walk for patrons at the proposed Marriott. Both proposed hotels will have loaner bicycles for local use.
C Visibility and accessibility from Interstate 80 – Although visibility from I-80 would be excellent, accessibility from I-80 is very problematic for the Hyatt House compared to the Marriott. There is not another major hotel off I-80 from Fairfield to UCD that would be as far removed from freeway access as would be the proposed Hyatt House freeway access via either from Mace or Richards Blvd. While Staff speculates that extended stay hotels would likely gain less benefit from freeway accessibility because guests are anticipated to have limited freeway trips once they arrive at the hotel, the proposed Hyatt House is not exclusively an extended stay hotel and they will be actively courting overnight guests to their rooms that are anticipating using for nightly guests.
D. Site Location, Product Characteristics and Amenities and Desirability for Extended Stay Travelers (Restaurants, Groceries, Neighborhood Services, etc.) – There are no amenities in immediate walking distance available to future patrons of the proposed Hyatt House while guests at the proposed Marriott are provided with a wealth of shopping and food and purchase alternatives at the Target Center on 2nd St. or on Mace Blvd.
E Proximity or access to public transit – Only the Unitrans W line provides local bus service on Cowell Boulevard near the proposed Hyatt House. The existing bus stops are about several hundred yards away from the proposed hotel site and the bus only travels in one direction. In contrast, 4 Unitrans routes and YoloBus pass by the proposed Marriott site and/or stop within a short block of the proposed site.
F. Proximity to Residences and Neighborhood Compatibility – The greatest objections neighbors have to the proposed Hyatt House is its proximity to single family homes and the attendant lack of privacy as a result of the massive height and length of the building. Additional neighborhood issues are the parking lots for the hotel which, for hotel aesthetic purposes, are pushed all the way to the back of the building causing additional noise concerns to the neighbors – particularly late at night. Also, the swimming pool at the proposed Hyatt House has been moved to the back of the building which will also cause noise pollution particularly since a bar is planned for the site. The Hyatt House project applicants have also informed the neighborhood residents that this bar will also be open to non-hotel guests. It is believed there is not another location in Davis where alcoholic beverages will be served to the general public in such close proximity to single family homes with children, a greenbelt, and a children athletic facility.
G Existing zoning – The proposed Hyatt House is currently not allowed under the existing Business Park zoning Use for the lot in the General Plan Land Use Map nor is it consistent with the South Davis Specific Plan. Zoning changes are required to both to entitle the project. Staff acknowledges the following specific zoning use changes will be required to entitle the proposed project.
Addition of a hotel as a conditionally permitted use
Increase in number of allowable stories from three to four and the building height from 50 ft to 55 ft.
Increase in signage area exceeding light industrial standards
Recreational facilities permitted outside an enclosed building.
Doubling in the FAR Size Ratio
Drastically decreased landscaping ratio requirements
The breadth and scope of the zoning changes required to entitle this project have severe and irreversible impacts on the primarily single-family home Rosecreek neighborhood. Much of the problem is due to the fact that the site is attempting to cram the maximum size of development onto an undersized lot (2 acres) directly adjacent to a residential neighborhood. By contrast, the Marriott is the exact same number of rooms (120) but it is being placed on a much larger 3 acre lot.
At the Planning Commission meeting at which these criteria were discussed for the proposed Hyatt House Facility, Commissioner Marilee Hanson presented a slide showing the number of red flags that that the proposed Hyatt House project raises with respect to these criteria.
We additionally believe that the relative paucity of access to public transportation (one single bus line going in one direction only with existing bus stops far removed compared to the abundance of bus options available to future patrons at the proposed Marriott) also raises a Red Flag for the Hyatt House in Criteria E but was not noted in Commissioner Hansen’s presentation to the Planning Commission.
Clearly, the large number of red flags raised as a result of this project represents a massive departure from approved uses of the site otherwise anticipated under current zoning. This is completely inappropriate given the quiet nature of this single-family home neighborhood. Because the Marriott is not adjacent to any residential uses, none of the privacy and noise issues are of any concern and there have been no public protests against the entitlement of that hotel whatsoever. If the City Council truly uses these criteria to select appropriate locations for hotels in Davis, this proposed Hyatt House should have been dead on arrival.
But it is not as if there were not other available parcels in town available for the Hyatt House development team to purchase. Indeed right now there is a 3-acre parcel directly adjacent to the Marriott site which is for sale at a cost of about $20/sq. ft. The Hyatt House development team has otherwise seemingly to have chosen their particular parcel on Cowell, however, because it is smaller and only costs $10 per sq. foot as compared to the higher price for the obviously more suitable and larger site on Fermi adjacent to the proposed Marriott. If the City allows the Hyatt House project to go forward and cram the proposed hotel into the much smaller parcel on Cowell, the City is essentially granting a variance worth at least $2,000,000 in reduced land pricing to the developers but in doing so sacrifices the best interests of the Rosecreek neighborhood.
Indeed, the Hyatt development team appears to have speculatively purchased the Cowell Ave site at a very low price anticipating that the city would change the zoning for their project and thus almost immediately double the value of their land purchase alone. So even if the project is never built and the land is just flipped to a new developer at the increased valuation of $20/sq. ft. because of the increased density allowed and the new hotel entitlement, the developers would stand to reap almost $1,500,000 on a $500,000 investment.
Of further concern is that the City is attempting to similarly change the zoning on the adjacent lot and the additional lot across street without any real community engagement as would be the case in a General Plan or District Specific Plan update. It is believed that this proposed rezoning is also not being done in conformity with legally required public notices to all affected property owners and there has been almost no public discussion about these zoning changes.
ZONING CONSIDERATIONS – THE PROPOSED HYATT PROJECT MAY BE VIOLATING PROHIBITIONS AGAINST “SPOT ZONING”
For almost every major development proposed in the City in the past few years, the City has been changing zoning at will and discarding General and Specific Plan designations that had been carefully crafted by years of negotiations between residential and business stakeholders. The Embassy Suites and Nishi projects are only the largest and most recent of such arbitrary zoning changes allowed by Council. The purpose of zoning laws is to establish clear expectations for allowed uses of real property, certainty of investment, and to minimize conflicts among neighboring properties. Unfortunately, wholesale abandonment of these zoning ordinances through exception zoning combined with extrajudicial changes in zoning in immediately adjacent parcels now seems to routinely occur which is simply a direct violation of the public trust.
When the City of Davis continues entitle land and projects through “zoning by exception. (sometimes also known as “spot zoning”), this practice defeats the purpose of legally mandated general plans and neighborhood or district-specific plans.
Indeed, at the Planning Commission meeting on September 14, Commissioner Herman Boschken stated that he felt the unusually large number of significant changes in current zoning for the proposed Hyatt House site that are required to entitle the project came perilously close to spot zoning.
We refer readers to the excerpt from Wikipedia on spot zoning attached as Appendix A. This treatise seems to be a very comprehensive summary overview but it is obviously a generic discussion and there are many aspects of spot zoning specific to California law which are not discussed here. One Councilmember has privately stated that the issue of spot zoning has been thoroughly vetted by Staff and the City Attorney and is not applicable to entitling the Hyatt House project.
Suffice it to say that Staff and City Council have always taken the most liberal interpretation of zoning and development related laws to support large development projects in Davis in the past including Council-approved projects at Embassy Suites and Nishi. Others have vehemently disagreed with these interpretations and these disagreements have resulted in protracted and currently unresolved litigation surrounding those projects. Thus, it would not be surprising to learn that many of the residents of Rosecreek may not have a high regard for the certainty and interpretation of Staff’s and Counsel’s legal opinion in these matters.
UNCERTAINTY OF MARKET DEMAND AND FINANCIAL BENEFITS TO THE CITY
There is Uncertain Evidence that Demand for a 2nd Extended Stay Hotel in Davis Exists
Following are excerpts (in italics) from the Staff Report submitted to Council (05 Hotel Background Information) for the Nov. 1, 2016 Council meeting:
“To provide an analysis of the potential new supply of hotels rooms, a report New Hotel Impact & Analysis prepared under City contract by HVS, was presented to the City Council on March 15, 2016 (HVS Report). The key findings of the report suggest that the addition of a hotel conference center and one extended-stay hotel in the near-term would be beneficial to the City, other hotels, and the overall market and that the addition of a second extend-stay hotel would not benefit the market for four to five years after the initial extend-stay hotel opened.” (Underline Emphasis Added)
The residents of Rosecreek believe this is a definitive conclusion based on all available information. If such conclusions are accepted by Council given the fact that the Embassy Suites Hotel and Conference Center is currently tied up in litigation and may not be built for some time, the clear and obvious choice before them on November 1 is to choose between the two competing projects (the Marriott vs. the Hyatt). We believe the Marriott Hotel is clearly the more favorable site because of the far better location near I-80 and Mace Blvd and the lack of adverse neighborhood impacts as is otherwise discussed elsewhere in this article.
In the same Staff Report, more detailed discussions about the potential market for hotels in Davis are provided but in a clearly subjective and/or biased manner; as follows:
Demand Generators – unmet need for supply exists and will increase over time
There are people attending UC Davis events but not staying in Davis hotels.
An informal poll of event planners at UC Davis on hotel needs was recently conducted by campus. We received the following information.
Hotel Loyalty Programs – guests want to use loyalty programs and are not provided with all the choices in Davis. There are presently no Hyatt or Hilton hotels in the City of Davis, for example. Both brands have strong customer loyalty and associated programs.
Amenities and services – guests want better appointed facilities (no details provided).
Depending on the time of year, supply cannot accommodate all guests.
50% of event planners that responded (unknown number of respondents), replied that more hotel rooms are needed.
50% of respondents think there is enough demand for two new hotels (this is not
explained any further).
Firstly, stating there is no Hyatt in Davis now and that the poor Hyatt Hotel users who come to town can’t use their loyalty points and will thus have to go elsewhere is disingenuous and borders on outright deception. This is because Staff explicitly fail to note that Hyatt users can currently stay at the 127-room Hyatt Place Hotel right on campus which is just a few miles away from the newly proposed Hyatt House on Cowell. While the City of Davis fails to collect Transit Occupancy Tax from guests at this establishment on UCD because it is technically in the County and not the City of Davis, it’s presence does clearly eviscerate the arguments of Staff that a Hyatt option is not locally available to visitors to the Davis area and that Council should thus approve another Hyatt facility in Davis proper.
The Staff report also states that the survey reported “guests want better appointed facilities”. But better than what?…the existing Hyatt Place on campus? It is telling that there were “no details were provided” by the informal survey respondents to substantiate this claim or that these details were not provided by Staff in their report. Certainly the proposed new Hyatt House will not have any “better appointed facilities” than the nearly new Hyatt Place on campus which renders this claim very suspect.
The survey respondents supposedly also claimed that “Depending on the time of year, supply cannot accommodate all guests”. OK, but for exactly how many days of the 365 days in the most recent year was the Hyatt Place and other Davis hotels/motels at full 100% capacity and thus turning away guests? Is it one days or 100 days? Making such a blanket statement without providing quantitative data to substantiate it questions the objectivity of the Staff Report.
There are also other broad unsubstantiated statements in the “informal survey” with “unknown number of respondents” that Staff performed as follows:
“unmet need for supply exists and will increase over time.” They note that “there are people attending UC Davis events but not staying in Davis hotels.”
50% of event planners that responded (unknown number of respondents), replied that more hotel rooms are needed.
50% of respondents think there is enough demand for two new hotels (this is not explained any further).”
But if only 50% of UCD event planners surveyed believe that such a need for more local hotel rooms exist, that means that 50% of the event planners surveyed DO NOT believe there is a need for more local hotel rooms! It certainly takes the shine off that survey when you report it that way. But the reality is that nobody knows what the actual day-to-day demand is because, amazing as it seems, there has not been any formal study of how much hotel guest leakage to other cities is occurring.
It is almost incomprehensible that these proposed major development decisions are being promoted by Staff and seriously considered by Council without obtaining this most straight-forward market information. Without this basic information, Staff comments about market demand are pure speculation and are seemingly conjured up to support their recommendation to build any hotel that is proposed in Davis. Unfortunately, enough scrutiny has not been given to Staff’s underlying assumptions and the incongruity of these assumptions discredit their somewhat simplistic approach at quantifying drivers of market development to justify support for unneeded projects. It is really hard for many of us in the community to get behind the recommendations of Staff for more development when they make rosy forecasts of demand without any underlying objective quantitative evidence to support their claims.
However, we will acknowledge that there has been substantial occupancy growth in Davis hotels and motels as the country came out of the depths of the great recession. Many will recall how brutal that recession was on downtown hoteliers and businesses in 2008 – 2011. But that is the nature of economic cycles. The mistake some in Davis are now making is to continue to think this type of hotel occupancy growth coming out of the great recession will continue indefinitely into the future – especially if we are looking down the barrel of another recession.
We believe that calls for adding hundreds and hundreds of new hotel rooms expecting this type of occupancy growth to continue unabated into the future is what some would call “irrational exuberance” – thinking if we just build the hotel rooms, guests will come. We subjectively believe, however, that the market can probably handle a 120 room extended stay niche-market hotel with current market conditions. But adding even more rooms than that in this highly inflated market would be foolhardy in the absence of a major new market driver (e.g. the build-out of the Embassy Suites Conference Center) or a definitive and quantitative market study showing we are leaking an average of at least 75 rooms a day to surrounding communities. As stated above, no such quantitative study has been performed and approval of both projects in this absence would thus be irresponsible.
The Financial Benefits to the City are Uncertain
Also reported in the Staff Report to Council was the Finance and Budget Commission’s report to the City that estimated that financial benefits will accrue to the City in range of the hundreds of thousands of dollars annually. This is in stark contrast to the rosy forecasts submitted by Finance and Budget Commission member Dan Carson whose reports were considered by the Finance and Budget Commission before they made their own final determination and recommendation. The Commission noted that the accuracy of the estimates of financial benefits to the City are predicted mostly on the level of long term occupancy rates achieved by the hotels because the TOT revenues to the City will far outweigh the value of property taxes and or other fees.
There are potentially many inaccuracies in both in the HVS and the Dan Carson reports which limit their usefulness as a near or long term term financial planning tool for the City due to the uncertainty of future occupancy rates.
The most glaring potential error appears to be that not all hotels/motels in town were even counted when determining occupancy rates for the City over the past 6 years. For instance, on page 47 of the HVS reports in which the occupancy rates for 506 Davis hotel rooms are reported (and including the University Hyatt Place), the authors acknowledge that they did not include occupancy rates for 221 other motel rooms when determining overall City hotel occupancy rates. The uncounted hotel rooms included the 106 room Motel 6, the 78 room Day’s Inn, and the 45 room University Inn. Omitting more than 30% of the motel room sample size in a survey of this type obviously calls into question the accuracy of many of its conclusions and certainly detracts from the usefulness of this study.
Another problem in the Carson financial analysis is that he makes the unrealistic assumption that if we just build both hotels, they will magically fill up to 73% occupancy over time without providing any historical context or quantitative analysis to justify or support this assumption. It seems Mr. Carson just picks the very best point in time in which the highest occupancy rates have ever been achieved in Davis and then projects them out into the future as if they will certainly eventually occur. There is absolutely no “worst case” or even a serious “lesser case” analysis to project revenues if Mr. Carson is just flat out wrong about future occupancy rates. A “Build It and They Will Come” mindset in projecting future occupancy rates in newly constructed hotels is a very dangerous way to project future revenues to the City as it will very likely overestimate future income.
In addition, the analysis did not include the possible negative impacts if the proposed convention center is never built or, if built, that it can draw enough large groups on a steady enough basis to actually require big room blocks at a new Embassy suites AND two other large hotels in town. WHEN (not if) the economy does enter another recession and travel and entertainment budgets are slashed to the bone as we saw in the last two recessions in this century alone, large conference attendance plummets and blocking rooms of 25+ at a time by companies becomes a fading memory for a number of years.
The Hyatt House may be Predatory to Downtown Hoteliers and Diminish Downtown Economic Viability
While much has been made about the robust growth in the occupancy rates in Davis over the past several years and proponents of the proposed Hyatt House claim that this robust growth will continue indefinitely in the future, I note that we heard the same chatter in the height of the real estate boom before the bust in 2007-2008. Some even acknowledge this recent rapid growth has tapered off in the past year for reasons not yet understood. Perhaps it is simply the end of a normal growth cycle.
One other possible reason is the very large growth in new AirBnB listings in Davis over the past 2 years. As of yesterday, there were 232 listings for AirBnB locations in Davis including single bedrooms, suites, and entire homes. Even if all of the listings were only for single bedrooms, this would still almost equal the total number of bedrooms offered by BOTH the proposed Hyatt (120 bedrooms) and the proposed Marriott (120 bedrooms). If such growth in local AirBnB listings continue to grow at such a rapid rate in the future, this would have significant impact on local hotel/motel demand and speaks against approval of at least one of the 2 proposed new hotels. Perhaps the City of Davis should investigate imposing a TOT on AirBnB rentals if revenue is such a crucial consideration weighing on the Council. Doing so might completely replace the revenue otherwise projected to be received by the proposed Hyatt facility
Further, it is well known that the promoters of the Embassy Suites and other local downtown hoteliers have spoken with Council members and requested that new hotel entitlements be delayed for a year or two until after the Embassy Suites/Conference Center has been built out to allow for conference and hotel bookings to create a sufficient demand that is not predatory to both the Embassy Suites and the downtown hotels. If, in fact, bookings in downtown hotels decreases as a result of oversaturation of the Davis hotel market due to build-out of the proposed Hyatt House, this will have negative consequences for both downtown restaurants and retail businesses serving these downtown hotel guest clients.
We are sympathetic to these claims. It is really hard to imagine that Staff is proposing to add 240 new hotel rooms to an existing base of 726 hotels rooms in Davis and UCD (an increase of about 33%!!) without any new occupancy drivers and not expect serious decreases in occupancy rates across all other hotels in town.
The current justification for entitling a this large new number of new rooms at this time is that the recent growth in occupancy coming out of the great recession will continue unfettered into the future. This is a naive view of a market often taken by people unfamiliar with or who refuse to accept the reality of normal economic cycles.
Classic economic theory says that building new hotel room capacity to accommodate currently non-existent guests could lead to an over-saturated market, decreased occupancy rates, and falling room prices if the expected future hotel guests do not materialize for whatever reason (e.g. economic downturn, failure of other demand generators to materialize such as the proposed Conference Center currently tied up in litigation).
This would negatively affect any new hotels constructed as well as existing downtown hoteliers and downtown businesses dependent on those downtown guests (remember the downtown Davis economy in 2008-2011? – it was brutal). Eventually it could lead to bankruptcies to weed out the financially weaker players and fire-sale asset prices.
We believe stable, measured growth is much preferable to booms and busts. Assuming that is true, the rational choice would thus be be to entitle the Marriott now because it is the clear superior alternative of the two choices and then see if either the Embassy Suites gets built or there is a definitive study showing large leakage of hotel guests to other to other cities before entitling another large hotel such as the Hyatt.
Another danger of over-entitlement by approving both the Marriott and the Hyatt is that a more conservative assessment of risk by bank financiers could endanger bank financing of either the Marriott or the Hyatt because of perceived insufficient market demand for both hotels. Financing difficulties have already been postulated as one reason for delays in build-out of the Embassy Suites which has a much stronger financial profile than a hotel only because of the conference center draw. Dan Carson suggested in his analysis that both the Marriott and the Hyatt should be be entitled and just let the free-market determine which or both are build. This demonstrates a decidedly unrealistic approach to market development and could cause neither hotel to be built.
TRAFFIC ISSUES AND CEQA COMPLIANCE
The Hyatt House Traffic Study is Flawed and Underestimates Traffic Impacts
The Hyatt House Traffic Study is flawed because it relies, in part, on old baseline data from the Embassy Suites Traffic Study for baseline conditions. As stated in the Traffic Study for the proposed Hyatt House project, “Cumulative traffic volumes and lane configurations presented herein are based on information derived from the work performed for the Mace Ranch Innovation Center Draft EIR (MRIC DEIR) and the Davis Hotel Convention Center (DHCC) traffic impact study.”
Unfortunately, there are uncertainties as to the accuracy of that baseline data and is a partial basis for the currently pending litigation against the City and the Conference Center. Reliance on this data to justify the traffic study conclusions for the proposed Hyatt House obviously calls these conclusions into question and should not be used as a basis for the City certifying the project’s Mitigated Negative Declaration.
The Traffic Study also does not account for the inadequate parking and associated problems that currently exists at Davis Diamonds (next to the proposed Hyatt House) which has been adequately documented to Council members via numerous photographs. Further, the Traffic Study assumes most traffic to the Richards Blvd. Corridor will travel along Cowell but, in fact, much of it travels along Research Park Dr along Playfields which, due the large number of guests entering and leaving the parking lot at the Playfields, presents additional problems not addressed in the Traffic Study.
Finally, there is inadequate parking at the proposed Hyatt House to accommodate all guests and employees when at capacity. It is likely that such employees will simply park their cars in the residential areas along Albany and use the short footpath over to Cowell to get to work. This presents further undesirable impacts on the Rosecreek residents.
The Hyatt House is Attempting to Use the Existing Greenbelt as Mitigation for Noise & Privacy
Proponents of the Hyatt House claim that adjacent residents on Albany Ave will have adequate line-of-sight privacy and minimal noise impacts as a result of the existing greenbelt and mature trees separating the hotel and residents. However, the existing greenbelt cannot be properly used as mitigation for the project to resolve aesthetic, noise, and privacy issues due to the uncertain lifetime and transient nature. Indeed, the City arborist has stated that many of the trees are in poor health due to overcrowding and may be further harmed by construction related soil compaction or physical damage. Further, the proximity of the Hyatt House landscaping and paving and the new storm drain work required by the project will also very likely damage these already stressed trees hastening their eventual demise and removal. This will cause even further degradation of the trees along the greenbelt and there is no mechanism for the project or City to offset or mitigate this loss of privacy and noise to the affected single-family homeowners.
SUMMARY AND CONCLUSIONS
For all of the above reasons, the Hyatt House proposal should be rejected by Council and NOT reconsidered until either the Conference Center is built or there is definitive and quantitative evidence that substantial hotel guest leakage to other cities is proven in a professional market survey.
Even if it is reconsidered at a later date, this hotel proposal should be significantly downsized and substantially redesigned to reduce unacceptable neighborhood impacts. All current maximum floor and height standards and density zoning requirements should be met as well as landscape requirements.
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Appendix A – Spot Zoning
From https://en.wikipedia.org/wiki/Spot_zoning
Spot zoning is the application of zoning to a specific parcel or parcels of land within a larger zoned area when the rezoning is usually at odds with a city’s master plan and current zoning restrictions. Spot zoning may be ruled invalid as an “arbitrary, capricious and unreasonable treatment” of a limited parcel of land by a local zoning ordinance.[1] While zoning regulates the land use in whole districts, spot zoning makes unjustified exceptions for a parcel or parcels within a district.[2]
The small size of the parcel is not the sole defining characteristic of a spot zone. Rather, the defining characteristic is the narrowness and unjustified nature of the benefit to the particular property owner, to the detriment of a general land use plan or public goals. The rezoning may provide unjustified special treatment that benefits a particular owner, while undermining the pre-existing rights and uses of adjacent property owners. This would be called an instance of spot zoning. On the other hand, a change in zoning for a small land area may not be a spot zone, if it is consistent with, and furthers the purposes of the general area plan.
For example, a small zone allowing limited commercial uses such as a corner store within a residential area may not be a spot zone, but a carve-out for an industrial use or a night club might be considered a case of spot zoning. In the first case, the differing land uses are mutually compatible and supportive. In the latter case, the residential nature of the area would be harmed by a conflicting land use.
When the change in zoning does not advance a general public purpose in land use, courts may rule certain instances of spot zoning as illegal. The Standard State Zoning Enabling Act states “all such regulations shall be uniform for each class or kind of building throughout each district.”[3] It may also be an invalid exercise of authority, if spot zoning is not a right conferred upon the body by the state’s zoning enabling statute, because it deviates from the plan set out by the enabling statute.[1]
Contents
Authority
Situations where spot zoning may arise
Variance
Special-use permit
Amendment to ordinance
Contract zoning
References
External links
Authority
Main article: Zoning in the United States § Constitutional challenges
Generally, zoning is a constitutional exercise of a state’s police power[4] to protect public health, safety, and welfare. Therefore, spot zoning (or any zoning enactment) would be unconstitutional to the extent that it contradicts or fails to advance a legitimate public purpose, such as promotion of community welfare or protection of other properties.
Spot zoning would be a constitutional exercise of zoning power by a local zoning authority if the state zoning enabling law allows spot zoning. Conversely, spot zoning may be an invalid exercise of a local authority’s zoning power if the state zoning enabling law prohibits spot zoning.
Situations where spot zoning may arise
Variance
A variance is the license to deviate from the land-use restrictions imposed by the zoning ordinance. A variance usually requires the landowner suffer a substantial hardship which only the granting of a variance may remedy. If a local zoning authority decides to grant a variance to a landowner who lacks substantial hardship, then its legality (regarding equal protection) may be called into question.
Special-use permit
A special-use permit occurs when a zoning regulations allows some specific exception to its regulations provided that a landowner receive a special-use permit from the local zoning authority. An example of a specific exception includes a church in a residential neighborhood. If the special-use permit deviates from zoning ordinance or the enabling statute, then an instance of spot zoning arises.
Amendment to ordinance
A local zoning authority like a city may seek to amend its zoning ordinance. If it amends it zoning ordinance but only for a parcel within a district and the parcel has a different land use characterization than the surrounding district, then an instance of spot zoning arises.
Contract zoning
Contract zoning occurs when a local zoning authority accommodates a private interest by rezoning a district or a parcel of land within that district. Then the private interest may then be allowed to develop the land where before the zoning regulations prohibited such a land use. Contract zoning is usually illegal, in contrast with permissible conditional use (also known as special use) zoning.
References
Eves v. Zoning Board
Eves
http://www.tnlanduse.com/SSZEA.htm
Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926)
We acknowledge that there are many different ways that “spot zoning” might be interpreted with respect to the proposed Hyatt House project and rezoning. In our lay opinion, however, the proposed Hyatt will clearly be yet another example of zoning by exception where the City of Davis attempts to amends its General Plan and/or District Plans in a major way for a specific parcel yielding entitlements to a select landowner. Unfortunately, these entitlements can fundamentally change the nature of the property use making it inconsistent with its commercial or residential neighbors. It appears such is the case with the Hyatt House proposal.
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