Granada hotel groundbreaking set for April

Two years after project approval, construction is months away

Questions about the Granada Hotel project on Monterey Road have been bubbling up in Morgan Hill, with residents asking each other, city officials and project developers when the project will finally begin.

After years of talk, the hotel is set to break ground sometime in April, barring any weather delays, according to Assistant City Manager Leslie Little. In an email obtained by the Morgan Hill Times, COO of Leal Vineyards, Tiffany Morales, told Morgan Hill resident Steve Chappell that the project would take about two years to complete.

Morales did not respond to the Times’ request for comment about project details.

The project was approved in 2015, after developer Frank Leal purchased the property, which is the former site of the Downtown Mall. The Granada hotel project is a neighbor to the Granada Theater renovation—also owned and developed by Leal—and will be located on 17490 Monterey St.

Once Leal’s hotel project is complete, city staff have previously said they anticipate general fund revenues of about $294,000 annually, in the form of sales, property and hotel taxes.

These revenue estimates come before the increased transient occupancy tax and the formation of the tourism business district in Morgan Hill, both of which have been approved since the Nov. 6 election.

Leal’s project at the Downtown Mall site was originally estimated to cost the developer about $13 million. Working with Weston Miles Architects, Leal demolished the Downtown Mall building in late 2016. The hotel project is proposed as a three-story complex that houses a restaurant and market hall along with a flower shop on the ground floor. The second floor will host a day spa and conference space. There will be 30 hotel guest rooms on each of the second and third floors.

Leal told the Times in October 2017 that he was hoping to have the Granada Hotel project complete by the fall of 2019. No reason has been publicly stated for the delay.

Leal purchased the Downtown Mall property from the City of Morgan Hill for about $1.1 million in October 2015. He purchased the Granada Theater from the city just a month prior to that for about $294,000, and the city offered him $700,000 in developer assistance for the theater renovation.

The city acquired these properties from its former Redevelopment Agency, which was closed by the state in 2012. Collectively, the Morgan Hill RDA paid about $10.3 million for the Downtown Mall and theater properties in 2008.

The project was described by city staff in 2015 as the “centerpiece in downtown Morgan Hill.”

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