Increasing tourism and attracting more visitors to Morgan Hill has been a renewed focus for the city with the passage of an increased transient occupancy tax in the November election and the formation of the Tourism Business District.
Both are an effort to support hotels in Morgan Hill by increasing advertising and beautification projects for the city. On Jan. 23, the city council voted unanimously to enact a zoning change that could again impact the city’s hotel industry.
The Planning Commission voted Dec. 11 on a zoning change for Madrone Village, located at Madrone Parkway and Cochrane Road, that would allow two four-story hotels to be erected on the property.
The request from Toeniskoetter Development was then moved to the City Council, setting off alarm bells for the community of hotel owners already established within the city. The council must still approve a second reading of the zoning change at a meeting in February before it becomes final.
With the impending rezoning of Madrone Village, some of Morgan Hill’s hotel owners worry they will be left with empty beds, waiting on a tourism industry that does not yet exist in order to fill the rooms.
In a letter to the Planning Commission, Andrew Firestone, owner of La Quinta Inn and Suites, wrote, “This project in particular would flood this sensitive market with over 200 new guest rooms in the same hotel category, in a single approval.”
The council voted to amend the use of the property to include taller buildings outside of the architectural style of the existing structures. The staff report states, “The Mission California theme requirement for the building exteriors is not conducive to multi-story buildings, and the current 40-foot height limitation will not accommodate four-story buildings.
“To accommodate the hotels’ architectural styles, consideration of architectural styles compatible with the Mission California theme will be needed for the Phase II area” of the planned development.
Brad Krouskup, president and CEO of Toeniskoetter Development, Inc. wrote a letter to the Planning Commission stating that adding hotels to Madrone Village would allow the developers to fill space in the development left vacant by failed commercial ventures.
The planned development was originally designated for commercial use, but Krouskup stated that getting tenants to stay in the buildings and adding large commercial draws would be nearly impossible.
“The proposed hotel use does not conflict with the existing neighborhood but instead provides a use that will serve and support the adjacent commercial and industrial areas, creates additional employment opportunities as well as additional service amenities for residents within the city,” he wrote.
Maps presented by the developer to city staff show that a Fairfield Inn & Suites and a Home 2 Suites hotel are planned for Madrone Village, on a parcel on the corner of Madrone Parkway and Woodview Avenue. Unspecified retail is also planned for the site.
Existing commercial uses in Madrone Village include offices, a bank, restaurants, a coffee shop and a fitness center.
Several hotel owners who spoke at the council meeting disputed Krouskup’s claims. They emphasized that the proposed hotels are not a different classification of lodging than many existing Morgan Hill hotels. While some council members urged the developer to make the design more unique and appealing, the council ultimately agreed the proposition would not have an adverse effect on business in the city.
Many council members echoed staff opinion that the new hotels would bring business to Morgan Hill commercial spaces. “One of the reasons I believe I’m sitting in this chair is because I said I wanted to grow our economic development,” Mayor Rich Constantine said when explaining his decision to vote in favor of the project.
Council member Larry Carr said that if the council did not approve the request, the city would be signaling to businesses that Morgan Hill was not a business-friendly environment.
A second reading of the item should be agendized for a February council meeting.