City blocks conversion of Hotel President, tenants catch a break

The Hotel President at 488 University Ave. in Palo Alto. Post photo.
The Hotel President at 488 University Ave. in Palo Alto. Post photo.

BY ALLISON LEVITSKY
Daily Post Staff Writer

The city of Palo Alto has told the new owners of the Hotel President that they won’t be allowed to turn the historic building back into a hotel, possibly saving the homes of the residents of the building’s 75 studio apartments.

Assistant Planning Director Jonathan Lait sent a letter Tuesday to Adventurous Journeys Capital Partners President Timothy Franzen, the buyer of the building, reversing the city’s originally accommodating position on the sale and conversion of the building.

Before the sale closed, Lait met with Franzen on June 7, when Franzen introduced himself and shared plans to buy the historic building and convert it back into a hotel.

“I asked at the meeting if your team had reviewed the city’s municipal code for compliance with applicable provisions and your representative, Richard Hackman, at the time indicated only a need to address parking and obtain design review approval,” Lait wrote.

After other private meetings with City Council members and City Manager Jim Keene, the sale went through.
That’s when Jeff Levinsky, of the Palo Alto Neighborhoods organization, stepped in.

“I was stunned that the city had said it was OK, that no one had brought up the notion because these grandfathering laws are designed to prevent this sort of thing,” Levinsky told the Post. “And I was surprised that anyone would buy the building and try to convert it.”

Levinsky contacted the city about the grandfathering laws that prevent oversized buildings from being converted to a use that doesn’t conform to current zoning. Within a few days, Keene changed his tune on the sale, telling council that the city would need to review whether the conversion was legal.

“The city and developers have gotten to be rather contemptuous of the law. They just ignore it,” Levinsky said. “Until people point out, ‘No, no, no, the law has protections in it.’”

Palo Alto Municipal Code Section 18.18.120(b) prevents developers from remodeling, improving or replacing overly large, old buildings in the city’s Downtown Commercial district to a different use, according to Lait.

The Hotel President at 488 University Ave. has retail on the street level and apartments on the upper six stories. It is too tall and too dense to be converted under the circumstances.

The grandfathering laws allow older buildings that are too tall or dense to comply with the current zoning code to remain in use, but prevents them from changing use unless the new use complies with the zoning code.
“And that is impossible for this building to become a hotel because it changes use,” Levinsky said.

The Birge Clark-designed building began its life in 1929 as a hotel. The name originally was President Hotel. But as the downtown lost shoppers in the 1960s, and the demand for hotel rooms declined, the owners converted it into apartments in 1969 and changed the name to Hotel President.

Simone Boswell, a tenant at the Hotel President, said last night that she had heard “something was coming down,” but that residents didn’t “officially know anything.”

“We are encouraged by this news and grateful to the city of Palo Alto for listening to our request to carefully consider the new owners’ intended use for the President apartment building, our home,” Boswell said in an email. “We have been encouraged and buoyed by the support of the larger community so far to our vision of what Palo Alto is at its best.”

16 Comments

  1. I’m glad the City is stopping this, but it’s hard to understand why the Garden Court Hotel next door is allowed to remain a hotel. Seems like “spot zoning” to me.

  2. So what’s next for the tenants? the buyer can’t open his hotel, but he needs to get a return on his investment . i can imagine he’ll be jacking up the rents sky high ttthere’s no rent control ordinance to stop him. THE TENANTS WILL BE OUT ON THE STREET IN A COUPLE OF MONTHS!!!

  3. I imagine the buyers will be suing the city. They bought the place at an inflated price based on the assumption they would get a certain amount of cash flow from it being a hotel. Now that it’s not going to be a hotel, and the cash flow will be substantially reduced, the buyer is going to feel some real pressure from his or her lenders. Hence, the city will get sued. It will be an epic legal battle, like the ones over Edgewood and Buena Vista.

  4. Good job by Jeff Levinsky. Jeff ought to be running for City Council. The council members didn’t do anything to stop this mass eviction.

  5. the council let the sale happen without saying a word—had a private meeting with the buyer before escrow closed. they definitely showed which side they were on—not with the residents. i’m not voting for any incumbent this year!!!

  6. Salute to Jeff for bringing this out. I want to know why our well-paid city staff didn’t catch this? A citizen watchdog who is paid nothing has to point out the law that prohibits this conversion to the staff? Why are we paying these people at city hall if they don’t even know the laws they’re supposed to be enforcing.

  7. Let the market determine the best use of this property. At one time it made sense for it to be a hotel. Then the owners decided the property would be the most profitable if it were an apartment house. Now they believe it will succeed again as a hotel. They want the highest return on the property, which is their right. The city is imposing redistribution economics here, a fancy way of saying socialism. The city should stay out of private business transactions!

  8. Yea, Socialism! The purpose of the city government is to intervene in situations like this and protect the people. If you want to define what the city is doing here as Socialism, so be it!

  9. let’s tear down the president and start over … file an application with the city to build a seven-story affordable housing development … it would be DENIED.

    our City leaders say they want more housing, but their actions are louder than thier words

  10. The comments by Levinsky: “The city and developers have gotten to be rather contemptuous of the law. They just ignore it…Until people point out, ‘No, no, no, the law has protections in it.’” are on the mark. Palo Alto AND adjacent cities–notably Los Altos–are facing the same issues.

    Kudos indeed to the reporter/PA Daily Post for covering this important issue.

  11. I can’t imagine that anyone would ever again consider building or improving rental housing in Palo Alto. This may in fact be the real agenda of some of the people involved, but it is a cynical assault on renters who sign up for this agenda.

  12. Kudos to Jeff Levinsky ! Can we find out which council members were secretly meeting with these developers even though the project was illegal ? Didn’t Keene know what the law was or did he choose to ignore the law ?

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