Riechel Informs: OTO Hotel Project Moving To Groundbreaking

San Bruno CA: Tuesday March 29th 2016 saw an important set of actions taken by the San Bruno City Council that moved San Bruno closer to realizing their select service hotel.

The Council was being asked to:

Adopt Resolutions Authorizing:

1) the City Manager to Execute a Purchase and Sale Agreement for Sale of The Crossing Hotel Property, and Authorizing the City Manager and City Attorney to Execute all Documents Necessary to Close Escrow, and

2) Authorizing the City Manager to Execute an Easement Agreement and Certificate of Acceptance with ASN Tanforan Crossing II for an Adjacent Landscape Easement.

With approximately 75 residents in attendance, City Manager Connie Jackson started the presentations with how the City got to where it is now and what the next steps needed to be.

It has been over a 7 year journey and if the resolutions are passed tonight we should be able to see groundbreaking within 90 days of the close of escrow for the 150 room hotel with 3,000 square feet of meeting space. The hotel will sit at the intersection of highway 380 and El Camino Real.

City attorney Mark Zafferano spoke to some of the legal questions that came up and could come up in the future.

The floor was then given over to OTO Development CEO Mr. Corry W. Oakes, III who presented a short Power Point presentation that included a brief history of OTO, accomplishments and awards won by OTO for its hotel properties, and more importantly stated that their thorough explanation of compensation structure stated that hotel workers would be paid wages and benefits competitive with other such entities, along with a comprehensive analysis of existing workers satisfaction with their compensation.

The majority of the evening was then used in 2 minute intervals for speakers to address the Council. Approximately 25 – 30 speakers spoke and most spoke about the request to OTO to hire union workers and pay union wages with benefits. The speakers asked the City to insure that OTO did this.

There were a few who spoke in favor of the project.

San Bruno Mayor Jim Ruane advised the audience that in this agreement:

1. NO City substitutes were being paid to OTO.

2. OTO would pay all applicable City fees

3. The City would receive $3.97 Million dollars from OTO for the property (which the City purchased for $1.4 Million)

4. Estimated Transit Occupancy Tax should bring the City $1 Million dollars a year starting the year when the hotel opens. These dollars would go into the City’s General Fund.

5. Since the City is not participating even with $1.00 in ownership or concessions to OTO, the City cannot demand that OTO use union labor.

One speaker again questioned the way the land was appraised and the land parcels included in the analysis. The speaker felt the land should have been appraised much higher.

The agreement included clauses that if OTO “Flips” the property prior to completion of construction – the City would benefit financially.

Escrow should close within 12 months

Construction MUST start within 90 days of escrow closing.

Construction MUST be complete within 30 months from the close of escrow.

The hotel MUST open within 32 months from the close of escrow.

There were a few questions from the Council, specifically from Vice Mayor Marty Medina, regarding desiring to delay the vote to allow for an updated and new appraisal as OTO had purchased 2 properties on the peninsula recently as hotel sites that were not used in our appraisal. Vice Mayor Marty Medina inferred that if this new appraisal increased the value of our land, he would look to OTO to increase the amount they would pay for our land.

Eventually the following two resolutions were introduced (one at a time)

Adopt Resolutions Authorizing:

1) the City Manager to Execute a Purchase and Sale Agreement for Sale of The Crossing Hotel Property, and Authorizing the City Manager and City Attorney to Execute all Documents Necessary to Close Escrow, and

2) Authorizing the City Manager to Execute an Easement Agreement and Certificate of Acceptance with ASN Tanforan Crossing II for an Adjacent Landscape Easement.

The vote on BOTH was:

Mayor Ruane – yes & yes

Vice Mayor Marty Medina – no & no

Councilman Rico E. Medina – yes & yes

Councilman Ken Ibarra – yes & yes

Councilwoman Irene O’Connell – yes & yes

BOTH resolutions passed.

ABOVE: Handshake between L: OTO’s Corry W. Oakes III and R: Mayor Jim Ruane

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Robert Riechel

E=Mail: SanBrunoPatch.Robert@Yahoo.com

WEB: http://SanBrunoPatch.com

My Posts: http://patch.com/users/robert-riechel

Photo Credit: San Bruno CA Patch Archives

Source Credit: OTO Development & City of San Bruno CA

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Kerry Burns - kburns@sanbruno.ca.gov - (650) 616-7181