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Downtown SLO hotel deal approved 

A complicated agreement involving a downtown public parking lot and a potential five-story 70-room hotel—negotiated behind closed doors—has been approved by the SLO City Council, after former mayor Peg Pinard blasted the process as “an abuse of public power.�
Council members voted 3-1 in a public meeting Tuesday to approve a complex memorandum of understanding with WestPac Investments, saying the project would revitalize the west end of downtown.
Known as the Garden Street Terraces, the hotel/condo/retail project would cover much of the block bounded by Broad, Marsh, and Garden streets. It will now face the city’s development review process, with the new agreement as a “roadmap,� according to a staff report.
The city’s economic advisor, Allan Kotin, one of the chief negotiators, referred to the $55 million project as a “slim� economic development. Discussing the mathematical complexities of the non-binding agreement, Kotin explained what he called “one of the odder features�: To “manage its cashflow,� WestPac will be given $2.4 million by the city, to be repaid over 30 years, minus the initial net increase in property tax from the site.
The value of the city’s parking lot under the agreement also came up for discussion, as Kotin explained that even though the property has been appraised at $5 million, the “burden� of requirements for providing parking means the site is only worth $1.5 million.
City officials were satisfied that some public parking will be retained on the site, with 40 enclosed ground-level metered spaces to replace the 62 spaces in the current parking lot. Under the agreement, WestPac will contribute $30,000 for each of the 22 lost spaces toward building a new parking structure elsewhere downtown.
“There are a lot of intangible benefits down the track,� said project developer Hamish Marshall, who noted that the effort would include increased vitality downtown. “The project can anchor the center of town, like Copeland’s in north downtown.�
City staff emphasized that approving the agreement didn’t involve approval of the hotel project or raising the height limit downtown at this stage.
During public testimony at the meeting, some local residents called for open bids on the public parking lot, as well as community input on its future.
Pinard said public consultation should have been the first step in the process: “This is their land, not the staff’s, not the council’s. There’s no excuse [for the exclusive negotiations]. This is an abuse of public power. The process needs to be open. That didn’t happen. That’s wrong. Go to the people, do what you’re supposed to do, represent them, not the developer.�
Councilmember Christine Mulholland, the lone dissenting vote, said the deal “smacks of subsidy to a lot of people who’ve been calling.
“If it’s such a ‘slim’ project, I don’t see why the residents of the city want to jump into bed with that kind of prospect,� she added.
Kotin told the council that the hotel project would eventually bring into city coffers around $300,000 a year in Transit Occupancy Tax funds, money that he said one study showed wouldn’t simply be diverted from other city hotels.
“We need a hotel downtown. It will make a wonderful asset,� said Mayor Dave Romero, who spoke in favor of the agreement and the development. “This is the opportunity to meet many city goals, and a chance to bring in newer, nicer stores to increase sales tax.�

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