Downtown

Hotel in Downtown Approved Despite Public Objections

Background: 
Council approved 4-1 (Silva voted ‘no’) to continue the item to December 20 for the sale of property located at 212 East Santa Fe Ave to Westpark Investments, LLC and TA partners. The plan is intended to accommodate a portion of the City’s housing obligation relating to the Regional Housing Needs Assessment. This property will be used for a 124-room hotel, and 140 residential units. The plan intends to build replacement parking for public use, a new inviting entrance to the Train Museum, and 3,570 SF for retail/restaurant uses. The developer estimates 230 or more jobs will be added and that the hotel will bring in $800K- $1 million in annual revenue for the city. The City-owned 1.66 acres of the public land purchase price is $1,400,000. The price is low due to expected soil contamination, but there is also a potential $500,000 escrow “hold-back” if soil contamination needs to be addressed, which would bring the price to $900,000 for almost 2 acres.

What Happened: 

The development was met with a protest from UNITE HERE Local 11 Union—which represents over 32,000 workers employed in hotels, restaurants, airports, sports arenas, and convention centers throughout Southern California and Arizona— brought upon a legal protest against this project. The Council heard appeals and took the letters sent in support and opposition into consideration. The Council voted to overturn the protest 4-1 (Jung voted ‘no’). Not sustaining the protest allowed the Council to move forward with deliberations on the sale.

The Debate: 

The UNITE HERE Local 11 Union argued for the public land to be used for affordable housing instead of a commercial hotel.
Other commenters opposed the development of this land citing the lack of necessary parking spaces for surrounding businesses’ patrons, disturbance and damage from construction, environmental damage from increased commuting, and the loss of public land to commercial use rather than affordable housing.
Some members of the public expressed discontent with TA Partners, calling their work an ‘architectural abomination.’ Commenters also expressed concern about local leaseholder and landowner Bushala Brothers, Inc.’s history of purchasing land in Fullerton and involvement in PACs.
The proponents of the development project were hopeful for increased jobs from the construction and the businesses for the Fullerton community and increased revenue for the City to tap into. Suggestions were made to prioritize hiring local carpenters and other workers in training.

Council’s Justification: 

Councilmembers Charles and Zahra both spoke at length about the difficulty of the decision and balancing everyone’s interests. Charles emphasized that while affordable housing is certainly a priority for her, the lack of hotels in or near the Downtown area undermines the City from hosting any major events. Parking structures already exist in the Downtown area and other opportunities for voting on affordable housing will come along. Thus, she favored overturning the protest and moving forward with deliberations on this sale and development project.
As for Councilmember Zahra, he explained that it is challenging to fulfill every interest, but there can be something for everyone in this deal. For example, not only can a hotel bring about more outside revenue to support city employees and their families, but also our roads and other services. And the hotel can make Fullerton a daytime destination as well, making the city dynamic instead of just relying on bars. He assured concerned residents that the developers have already agreed to at least 12% affordable housing on the property and hiring local and labor union forces are also in the talks.
The 12% of affordable housing was based on 60 dwelling units per acre, but as the project is currently proposed to be 70 dwelling units per acre, there was confusion as to whether 12% is the correct number.
And with those comments, the Council passed the resolution to approve the development agreement and the Mitigated Negative Declaration environmental analysis 3-2, with Dunlap and Jung voting ‘no.’ The sale has an unusually short escrow of only 10 days instead of the usual 30, in order to complete the sale before the Surplus Land Act would come into effect, which saves publicly owned land for either open space or affordable housing. The environmental documents were approved for the hotel project as well as an additional project at the nearby public parking structure.
The developers have 3 months to present a plan that fulfills all the City’s requirements, thus allowing the City control over what gets built and how. The debate is far from over and the upcoming meetings will be instrumental in determining the future of 212 E Santa Fe Avenue.
Notably, the developer had an exclusive negotiating agreement on this project, rather than the standard practice of opening it up to the public for other contractors to bid.

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