City Council - Special Meeting

Recording in progress.

All right, we're going to go ahead and get started. Thank you everyone for being here today for this special meeting of the Marina City Council on Tuesday, May 5th, 2026. If we could have a roll call, please, Anita.

Council Member McAdams here. Council Member McCarthy here. Council Member Biala here. Council Member Visser here. Mayor Delgado here.

Yeah, I said May 5th because I have the wrong Pack it here. I'm so sorry. I saw a special meeting and I thought that was the right. All right. So we're here for two items. The first we'll move to now for extending the Hitchcock Road Animal Services contract with County Monterey.

And of course, our police chief is our lead on this.

All right. Good evening, all. Mayor, Mayor Pro Tem, council members, city manager. So I'll be very quick. I know you have a lot to discuss this evening. So the item that I have is item 4A, and it's to renew the annual contract with Monterey County Municipal ANIMAL SHELTER. THERE IS BASICALLY NO ADDITIONAL FEES, NO INCREASE IN FEES, NO CHANGE IN SERVICES. THIS IS SIMPLY RENEWAL OF WHAT WAS ALREADY APPROVED LAST YEAR. SO I'M SIMPLY ASKING THAT IN FACT OF TODAY THAT YOU RENEW OUR CONTRACT SO THAT WE CAN GO AN ADDITIONAL YEAR. AND THAT'S PRETTY MUCH IT.

All right. Thank you very much, Chief. Let's go to the public here in person. Anyone wish to speak, please step forward. Not seeing anyone standing up. Let's go online.

Anybody online that's going to go to Daniel Orta?

Welcome, Daniel.

Thank you. Can you hear me? Yes. Great. First of all, thank you for having this meeting. Good evening, Mayor and Council. My name is Daniel Orton. I'm a Marina resident and a CSUMB senior. On item 4B, I'm just concerned that this might not be a good deal for everyday Marina residents. According to the packet. Excuse me, Daniel? Yes.

You're speaking to the next item. We are on a, and you're talking B. Oh, so you could just be patient. We're almost there, but we're still on the first item.

Okay. Thank you, chair.

Yeah.

We'll, we'll have you on first. Okay. Anyone online that wants to speak to the Hitchcock road animal services extension contract. AGREEMENT. ALL RIGHT. WE'LL COME BACK TO COUNCIL, POST PUBLIC COMMENT. COUNCIL, QUESTIONS? LET'S GO TO COUNCILMEMBER MCCARTHY.

THANK YOU, MR. MAYOR. AS SOME OF YOU KNOW, I GOT MY FAMILY MEMBER FROM HITCHCOCK ROAD. IT'S A GREAT SERVICE THAT THEY OFFER THE COMMUNITY, ALBEIT VERY IMPERFECT. IT'S NOT ALWAYS FUN WHEN THEY HAVE TO DO SOME OF THE THINGS THAT THEY DO. BUT I WANT TO COMMEND THEM AS A SERVICE PROVIDER IN THIS REGION. And then I'd be remiss not to just mention what I mentioned this time last year. And that is, I do think that we have some work to do on our animal control ordinances within the city. I'm horrified that I've sat through so many city council meetings with cats in heat directly underneath my feet. And I think that goes hand in hand with the services that this organization provides. And so yeah, I think that we should take advantage of not only renewing this agreement, but not letting this issue of feral and stray cats and dogs or whatever the case may be get more out of hand than it is today. Thank you.

All right. Thank you, Brian. Let's go to Council Member McAdams.

Thank you, Mayor. I'm just happy to move for approval. I'd like to second.

Any last comments before we go?

Let's go to all in favor, please say aye.

Aye. All opposed, please say no.

All right, thank you, everyone, and thank you, staff, for doing, you have done prepared for tonight. Sure, thank you. So that passes unanimously with the five of us present, and we'll move on to our next and final item. This is really why most folks are probably here regarding the proposed amended agreement for the Monterey Bay Hotel's limited partners organization. All right, so who, why don't we have our city manager introduce this item for us?

Thank you, Mayor. It's a slideshow, if you can put it up, please. And while we're here, I wanted to mention that we have Karen Tiedemann, our special counsel with this project in the audience for help and references we get later on here. And in the audience, we do have Harvey Dadball, Lindy, and I believe that's Rob O'Keefe with Sea Monterey back there. Okay, next slide. So, the purpose of this meeting really is is 2 fold is to receive a presentation. From the Monterey Bay hotels group, it's a different name for the Harvey dead walls hotel group earlier on that he had. And the city has an agreement with them for Harvey's Hotel Group to build a Marriott AC and a Marriott Element for 200 rooms and then later on Hyatt House or something similar for 100 rooms. And we have an existing development agreement and we've been working through that for several years. And they have a new proposal that they want to make tonight on a different luxury hotel. And so tonight's purpose is to receive a presentation from them and then provide direction on moving forward with an amendment to the development agreement potentially. And also we have Kaiser Marston that is working on financial analysis with this and also to get further direction for Kaiser Marston. Next slide. Just for a brief history, in May 2005, the city entered into a development agreement with university villages at the time that changed ownership and Marina Community Partners now owns that. But in 2005, they adopted a specific plan for the project. It had various mixed commercial type of uses on there. It had destination retail components. It had light industrial office uses. An important part of it was up to 500 uh hotel rooms was anticipated in it and uh the development agreement required at least 300 hotel rooms and public facilities had full ranges of parks and recreational facilities that required 1 237 housing units and the necessary infrastructure to support the project next slide The area that we're talking about, if you look on the slide here, is parcel A and parcel B is what Harvey Dadwald acquired as an option that we extended to him. They acquired that option for the dunes, which was 9.5 acres roughly, and that was to build the hotels. subsequently he's been working with the dunes on that tarp parcel where you see that 2.73 acres in red and he's been working with dunes for well over a year to acquire that property because as he's worked out different site plans it worked much better if they could swing the hotel up to the site they get much better views and it doesn't pack um everything down on the parking and stuff down to engine road and so it worked out better for the hotel hotel development and they worked over a year but they finally have a that property and escrow agreement with the dunes and they're ready to move forward um if we're able to move forward with some amendments to the development agreement that they're proposing Next slide. This just gives you an overview of the dunes concept plan that the very top is the property that we're talking about. And in the specific plan, it'll call that as a visitors serving hotel convention center property. You can see why it was put there. It's close to the highway, easy access. And so that was always envisioned for that property. Next slide. So, What they are proposing for this new, or actually let me go back even a little bit, history of how we got this. Marina Community Partners Uh, they were obligated to build 300 hotels or 300 rooms for hotels, and they could not find any hotel years to do that. And they worked and and I sat down for many years with them. Talk with various people, and they could not get anyone to do that. And so at that point. They told us that they couldn't find anyone and they agreed to do an option agreement with the city of Marina to where they would notify us that they were not able to find anyone to do a hotel agreement. And within a year period of time, we had the ability to exercise that option and assign that to another hotelier. Next slide. So we received the notification from the Dunes, and then right away the City Council issued an RFP for different hoteliers. They received four RFPs, and the City Council held public meetings and received presentations from the different hoteliers, and they selected the Dadwell Management Group. At that point, when they selected it, the city gave notice to Marina Community Partners that we were going to exercise an option agreement, and we assigned that option agreement to the Dadwell Management Group. At that point, they purchased the hotel site from the Dunes for $3.6 million. And that price was under the market price for the land, but it was agreed on. That was what it covered for the infrastructure and the land cost at that point in time. Now, when they agreed to this land option, they entered into a hotel development agreement with the city, and they split it into two phases. In phase one, they agreed to build a 90-room Marriott AC and 100-room Marriott Element Hotel. Phase two would be a 100-room Hyatt house or something similar to that. Next slide. And they've been working with that. I think these slides might be a little bit out of order here, so I apologize there. But as they're working, they had a lot of problems with PG&E infrastructure. And we've had that with all of our developments across the city. And so that delayed things quite a bit. And then the Dunes is obligated to put in infrastructure and roads and utility infrastructure, and they were not able to do that. And that got delayed quite a bit. And part of it was delayed as they're trying to figure out the last phases, how to develop it. And so where we had a development agreement with the Dadwell management group that required them to be moving forward on the development, they were delayed because of these other options that they were not able to control. And during this period of time, I told you, they were working with students to acquire that 2.7 acre parcel that I showed earlier there. During this period of time, though, they were not meeting their requirements of the development agreement they had with the city. They have performance standards and benchmarks, and that is in a pack in the hotel that reflects that. And so on August 21st, 2025, the city issued a notice of default to the deadwall management group. And the dead one management group, since I issued that notice of default, I've been working with them. They proposed some times they didn't quite work. We've been working out, trying to figure out some new times, development times that would work with them, that would work with the city. And during this period of time, the hotels in Sand City had been had been built or were moving forward to be built and opened up and and they would certainly impact the hotels that were proposed to being to being built here and this and various other reasons led the deadwall management group really to start exploring a different type of hotel product which is a upper upscale luxury hotel next slide As they went through this, and I'm just going to highlight some things of the CBR report. Those are confidential reports that I can't release, that they can't release. But I can tell you, these are some things that the report said. It said that a competitive market for mid-scale, upper mid-scale hotels has changed since the opening of the Courtyard Marriott and Residence Inn in Sand City, and also the conversion of the Monterey Tides Hotel to a Marriott Tribute-level hotel, which is now the Monterey Beach Hotel. And a report, the study said, given the current market trends, an upper, upper-scale luxury resort is the superior strategy for the Monterey area. Next slide. The report, some other highlights were that the strongest revenue per available room, you hear the room rev par, in the Monterey County is driven by a higher average daily rate, and that's driven by leisure travelers who are less price sensitive. Our area is also attracting higher value travelers who prefer more luxurious and unique accommodations, and Rob O'Keefe can provide you more information or answers to questions about that. says this is there's a high demand for resorts offering unique immersive experiences rather than just coming down here for accommodations next slide um so with that uh that report um uh we started working with kaiser merson to look at the luxury hotel that the Dadwell Management Group was proposing. And they've been working on looking at the pro forma that includes looking at development costs, indirect development costs, operating costs, what it takes to for the profit margin look at your debt uh your equity requirements and and they're still working on it they're they're several weeks away from uh from completing that uh but what they did share with me that from the information they have at this point that it looked like for that hotel to be successful uh that would uh definitely require uh partnership or some type of revenue sharing agreement with the city at that point they said it's probably in the 20 to 25 million range but again that is just preliminary on the current information that they're developing next slide sell some options outside of moving forward that with the amending the development agreement for the luxury hotel the council you can look at saying you don't want to do luxury hotel and want to Go back to amending the agreement with new timelines for the current proposed of the Marriott AC, Marriott Element. If the, if the DADWO group is interested in that, they may not be interested in that. If we don't want to go down those options, then we could exercise our option to acquire the property. and um it gets a little complicated there and the surplus landing that comes in here because if we acquire the property um then we have to go through a different process to uh to get rid of the property called the surplus land act under the development agreement we have the ability um If we go in default, if we can reassign it, I think our window period, and Karen or Renee can know that, I think a window period is like 30 or 60 days to find another hotelier, which is impossible. You couldn't do that at that point. and so that's kind of limited but if the city did want to acquire the property for long term you can look at other uses as parks and facilities and try to get other types of commercial or other retail businesses up there there's a car station that is currently a car or gas station car wash and a and a little convenience store is being built up there we could look at other options we've done all these studies uh for long-term revenue potential for the city um hotels are some of the um largest revenue uh producing properties that's why it was an important part of the uh of the specific plans with the dunes development that you have to have those hotels for the city to be able to have the revenue to sustain not only from the growth from the hotels but the cities that's why that was an important part of that agreement and so taking that out we would definitely would have to find some other revenue sources to generate long-term revenue for the city and that concludes my uh presentation um if you don't have any immediate questions we'll turn it over to uh mr dadball and or indy and they can introduce their team um they have um their architects and various members of their team online i think initially they um they'll have probably need about 30 40 minute minutes between their architect and their cbr study people and their various people to explain their proposal just one moment indy now normally our practice is to give 10 minutes now we're asking 30 minutes and so i just want to make sure that council has no objection

Or if you do have an exemption, let's let's talk about that. Yeah, I would recommend that we consider giving maybe 15 minutes and then come back at the end after some council deliberations.

If if we get there and have clarifying

Okay. Thank you, Brian. Council Member McAdams, do you have input?

Yeah, I agree to that. That's sort of why I turned my light on. I just, we need to be fair and consistent. And so, yeah, I would appreciate that.

Okay. Council Member Biala and Mayor Pro Tem.

I agree. Yeah, that's fine. So I think you said 20 minutes and then come back if there's other things that need to be brought up. Is that what the council member? I said 15, but maybe 15.

Okay.

So let's start with 20 minutes and then we'll have some comment. And if we want to hear more, we'll ask you to finish. Okay. Because normally we give 10 minutes, but we're not in a hurry tonight. It's our only item left on the agenda. And this is a major project. So let's take it away, Indy. Thank you for being here.

Good evening. Thank you, Mayor Delgado, council members, city staff, and members of the public. Thank you for giving us the opportunity to present our revised vision for the site at the Dunes on Imgen and 2nd. As many of you know, this property was previously approved for a different hotel concept. We had an approved project they could have moved forward with, but instead, we took a step back and asked ourselves a simple question. Could this site become something even more meaningful for the city of Marina? We believed it was worth exploring before simply building what had already been approved. To help answer that question, we assembled a team of nationally recognized professionals with expertise in hospitality, design, branding, hotel market analysis, tourism, and development. Our goal wasn't to justify a different project. It was to determine whether the site had the potential to create a greater long-term value for Marina. Tonight, you'll hear from each member of our team as they share their professional perspective and explain why we believe this revised vision deserves your consideration. Before we begin, I'd like to clarify one important point. We are not asking the Council to approve a final financial participation agreement or make a final decision on this project. Our request tonight is simply to allow this revised concept to continue through the next phase of evaluation so staff can complete its analysis, refine the proposal, and return with a fully developed recommendation for your consideration. We appreciate your time this evening and look forward to sharing our vision with you. With that, it's my pleasure to introduce our architect, Mark Tiedemann. Mark has spent decades designing hotels and resorts throughout the country, and this evening he'll present the vision and design for our proposed resort.

Thank you, Indy. Welcome, Mark. Mark, you've been made a panelist. So you're ready to go. Oh, maybe you haven't been. Let's make you a panelist. Okay, Mark, you're ready to go as a panelist.

Thank you for making me a panelist. I appreciate that. And I'm going to go and share my screen here. Let me see if I get my screen set up here. I guess this might be the one here, right? Which is my layout share. OK, let's just go there. OK, so let me move that down there. And let me jump right in here. Sorry, a little bit of setup here.

That's OK. It's great.

So I'm Mark Tiedemann, architect. I've been doing this for 30 years and my specialization is strictly in hotels and resorts. My previous 10 years before becoming an architect, I actually specialized in single family houses. So lots of clients during that time period. And I moved, obviously transitioned very well into the hotels and resorts because hospitality is where it's at, right? So Harvey's team brought me on here to design a number of projects. I've been working with Harvey for a long time and he spent a lot of money on fees already since probably 2022, as I recall, 23 maybe. And every time there's a vision and there's a transition in the marketplace, so things change. And that's just the nature of the beast that we're in right now. And you can see with the economy, there's more demand now for upper scale hotels than there are for limited services. and i've been to marina california been to the site before a very interesting parcel so the idea when i met with harvey just about a year ago now with this new vision here is to create this eco-friendly resort that flows and embraces the land uh with a natural feel and a color palette that grew right out right out of the dunes basically the color of the sand from wet sand to dry sand colors, natural stone, warm wood, and glass. So this is what you're looking at as far as a frontal view of the proposed project. To the right of the project here, you will see this is the event center, which is about 5,500 square feet and house basically events up to 300 people in there. This is the front portico area with the main entrance, and this frame here is the frame of entrance or arrival that basically goes through the whole building to the outside so that you have a great view when you enter into the lobby that you've arrived because you have a big picture frame right on the backside of this that basically frames a picture of the dunes. This arrival point here, too, I'm going to say that is about 20 feet above Injun, if I'm saying that correctly, or down by Target there. So this arrival point is at a high point on the dunes. And that's basically what I think the event center people and consultants uh needed a view corridor for the banquet area the restaurant and then of course the venue at the top here which is a specialty space for small weddings yoga in the morning different personalized spaces for cocktail parties that type of thing so and the tower here is directed to the left that has 125 keys in it um and that's basically this front view here i'm going to go jump now to The next view here. So this is a little bit closer down to Imgen Parkway. This is the view of the back of the building, but you can now see the natural colors of the stone, the natural colors of the wood that incorporates this. So it's not a Hampton Inn or some boxed building. It's just all gray or anything like that or depressing. It really incorporates the Monterey cypress, magnolia trees. into the landscaping and even on the balconies we have planters with a cordillon basically on all of the balcony areas and you can see we want to actually have the guest experience to be extremely high here so these guests that are paying this money to be here can really experience the dunes up close and with views of Monterey and views of Santa Cruz. let me move on to the next slide here this is sort of looking directly at the back this was more in alignment with highway one and what we envisioned here was a greenhouse area that's going to act as a dining small dining area flex space indoor entertainment in the sense of like maybe a small pickleball court and then the rest of the greenhouse is going to be dedicated to plants for know basically garden area so that with what we call that uh farm to table for the restaurant space so it might be smaller greens and things like that but they will be growing in the greenhouse here too then we have the outdoor pavilion area back over here we have the outdoor wedding venue space a great view for the banquet area here's the back picture frame view that goes across the trees looking back out at the dunes and the pool is tucked back in over here you can't see it here but there's a pool down in there and then if you look here here's kind of like the yoga area on mornings or probably afternoons at the host along with again wedding venue possible space there restaurant here and then this lower level is the dining space and this is that area where the pool is a little closer look with the glass We're trying to keep a lot of glass here so that there's a great visual to see through the glass to be able to look at the dunes and not have anything blocking basically the great views that we have out there. Lastly, I'm jumping over here to the other side of the hill. This is the villas. let me get rid of that the villas basically are 30 villas and seven of them are two stories which then will entertain uh two bedroom villas versus single bedrooms so uh they all have fireplaces they have uh fire pits they have jacuzzis they have outdoor furniture they have uh plunge pools uh very high amenity with kitchenettes and basically almost full kitchens in these units So that when families come here, obviously with kids and things like that, there's the pull-out beds. There's lots of space here to entertain families. And that was the purpose of the villas. And you can kind of see a 3D rendering here looking at the stepping of that. So now I'm going to jump over here to the site plan. And as you've already had stated, we are framed by Highway 1 back over here, Imjin Parkway over here, and Second Avenue back here. This frames the property, and this is the property that basically Harvey has been working on diligently, and I know his family very well, just a lot of time and effort into this with a lot of people, but this was the master plan that came out of that. And you can see this line coming through here. This is the 300 foot easement off of Highway 1. That restricts the development height to be under 90 feet. That's the development height allowed. The top portion, because this kind of goes up the hill, the top portion back over here, this is maybe equal to a six-story building, even though we're seven stories back over here, because there's a 20-foot grade drop from the top of the dune to down over here. These blue panels over here, these are all solar panels, basically in the parking, parkour areas to plug in your Tesla, that type of thing, electric cars, and also for storage, battery storage for LED lighting and things like that that are in the hotel. uh let me go to the first thing here uh everybody knows this property this is a gas station that basically uh harry's been working on diligently over two three years now and it's almost open right now so this is a component that's actually very favorable for the hotels and for the people coming here because obviously it's an access point uh to the convenience store for for drinks water food that type of thing and the gas of your car come and go car wash that type of thing uh so that is coming in the entrance here And then we go over to here. This is the 100 room boutique hotel that was previously going to be the Hyatt property. OK, so this is still planned as a hotel boutique hotel. So it's a holding place right now. The next property here is this property. So this property is the Luminar Resort and Spa. As you can see, I delineate that here in the red. This has the greenhouse out the back here. Again, that's a buffer. It's a sound buffer. It's a screening from Highway 1, but also that will be lit up at nighttime, so they'll have some great visuals of the hotel. And then from here to about the event center here, there's almost a 20-foot grade difference. So this is really sitting at the pinnacle point, the top of the hotel where the Port Couture has come up here. uh great great parcel land at the pool out the back restaurant that type of thing well this is more like a cafe outdoor cafe thing and then uh jumping ahead because i know i'm letting my time here this is the 30 villa footprints and uh there's i believe seven of them that are two stories in height uh and all the data and information is on the drawings here too which i believe you might or might not have but now we can get you that and then i'm going to go through the floor plans as quickly as possible here because i know we're on time limits here too Um, okay. So, uh, what are we looking at? So the first one is basically the lower level. So this is a lower level lobby. This is down in the ground. So it's not a big visual, but it's in alignment with the pool that's outdoor. And then we have, Oh, here's the spa. Okay.

So there's a spa and there's, excuse me, Mark, let me interrupt just to check in on time. You're at the 10 minute mark. You got five more minutes for the team before we take a break.

OK, sounds good. Please proceed. Thank you. Thank you. Yeah. So we have the spa pool here. Again, these are amenities that you would see in a five star gym. This is not a twelve hundred square foot gym. This is a very big gym, very big spa area. Spas have red light therapy, all these wellness. But this is basically a complete wellness floor down at the lower level. Now, this is jumping up to the first floor level. Sorry about that. Jumping around here. Let me go back to this one. This is the entry point, and you can see the visual here going out to the bacterias that will shotgun the view as you come into the hotel from check-in front desk. We have valet parking, fireplace in the middle. The whole idea of being eco-friendly is to make it look eco-friendly and feel eco-friendly, but also to use the materials, which are going to be low VOC, reclaimed wood, bamboo. natural friendly interiors and that's the goal. Over here to the right, we have the grand ballroom that's on the same floor level as the front desk. I'm going to jump here. We've got the sundry shop. This is for things that say Marina California, come visit, welcome, that type of thing. cafe this is for 70 seats indoor and outdoor seating that's to have snacks lunches micro dinners I would call them you know people sometimes don't go out to a full dinner anymore right and obviously bagel breakfast type of area so that is the first floor there and then we're gonna jump over here to the left and this is guest rooms of course off the first floor the orange color here that's signifying just vertical transportation those are stairwells and elevators uh and the next area here is just the terraces so the terraces step down they continue to go down basically uh all the way down to grade i'm going to jump a little faster here there's the next floor up there's a restaurant level back over here that seats 200 people The next level up full guest rooms here. Next level up more guest rooms, more guest rooms. And of course is the top floor, two bedroom suite. We have large guest rooms. The amenities are for fireplaces to, you know, spa showers and every single one. Luxury pull out soft sofa seating along with high end linens. And again, bamboo natural materials throughout and at larger area for glass and glazing on the outside that lead out to the terrace is the outside and Very high ceilings, up to 10 foot high ceilings in each of the guest rooms, which is very, very rare, if not unusual, but creates a great ambience. The eco roof, this is on top of the roof with skylights. Green roof we had incorporated here. And let me see if I have time to go through the exterior elevations. I'll try to go through as fast as I can here. Here is the front elevation, but now you're seeing it very square, two dimensional. You can kind of get an idea, okay, here's the lobby level, but the lobby level is stepped up from the lower lobby level. Okay. And then here's the restaurant, the banquet space entrance. back over here the valet parking the reason we have this is because the parking lot's lower down here so you're not going to see this so the height of the building when you actually look up the hill here this is probably about 65 feet and we have 90 foot of area that we could work with but Harvey said let's keep it lower keep the ceilings higher and less floor so that's what we ended up with this is the back view stepping down to the pool you can kind of see the same idea we got dropped 20 feet here let me jump around this is the greenhouses in the back This is the pavilion across the back to give an idea that's sort of a breakout for the wedding venues and a breakout for people that might be having lunch out there. This thing goes into the cafe. This is next to the pool. Again, more of a upgraded, very minimalist look, but again, using the wood, using the stone colors, and using the white that you see throughout Northern California. And then, of course, this kind of jumps into the villas. That's the villas. Okay. So the villas, one story, low shed roof line. We got solar panels on the roof, daylighting through the roof. Again, all eco-friendly architecture here. And I'm going to run right into here. With amenities, you can kind of see spa showers, tubs that are standalone tubs. larger vanity enclosed toilet rooms, wardrobe cabinets with slippers and bathrobes in it, linens, upgraded bamboo carpeting around the bed area for you got soft seating and they got a puffer and just some nice amenities throughout the whole hotel. I'm not going to go and bore you through all this stuff because I know we're limited on time. But we go up into the very end here where we go back down to the villas and we can see the spa villas that we have here with plunge pools, fire pit areas, outdoor dining areas so it can be catered to. So the idea is basically that these are catered spaces that are going to help with employment of people and also to bring the guests that want that higher level of experience on the property. Did I go over my time already again?

No, you're not over yet.

How much time is left, Anita? Yes, you're on time.

Okay. All right. Well, that's the pack. I can present this. That's good, Mark.

So now we're going to take a break from the developer's presentation. And why don't we go to public comment? Is everybody okay with that?

Okay, let's go to public comment first with folks in the room, and then we'll go online. Come on up if you have public comment here.

Do I press a button here? I need to log.

Hi, Grace Silva-Santella. I don't have a problem with the new project that the development team has just talked to you about. A community room that will hold 300 people sounds great. A venue for upscale weddings and parties sounds fantastic. More power to them. But I say they need to do it on their own dime. So what I'm speaking to tonight is the possibility of a revenue sharing of TOT. In 2018, when Marina voters increased the TOT to 14%, the voters approved this so we could support police, fire, and infrastructure. They did not approve it so a Marina City Council could give a 50% portion of TOT collected back to a developer of a future luxury hotel. What I read in your staff report and quotes that I heard from the city manager are seven strong arguments why this hotel, this luxury hotel, will be successful and does not need any sharing of TOT. Strong revenue per available room. High value demand successfully attracting high value travelers. Defying national slowdown. High end travel remains robust in the Monterey area. Brand alignment strategy is to increase presence in the luxury segment. Experience first tourism. High demand for resorts that offer unique immersive experiences. experiences, supply scarcity, allowing new luxury access to maintain high average daily rates, and regional economic drivers. That's directly from the staff report that you had this evening. There's strong arguments why this project as an upper upscale luxury hotel will be successful on its own. And finally, in addition, I would say that if you move forward, and I'm speaking strictly to the revenue sharing discussion that you'll be having when you close public comments, and that you'll be perhaps asking to have come back to you. If you move forward with the TOT revenue sharing with a private for-profit developer of a luxury hotel, I think this is going to create some real challenges for you to convince Marina voters to tax themselves a 7% UUT for fire, police, and city hall. Thank you very much.

Thank you very much, Grace.

GOOD EVENING, COUNCIL AND MAYOR. BEAUTIFUL FACILITY. BUT I'M HERE TO TALK ABOUT THE SHARING OF THE TOT AS WELL. YOU KNOW, WHEN I KIND OF LOOK AT THE PACKAGE THAT I RECEIVED AND KIND OF WENT THROUGH THAT, IN THE CONSULTANTS ANALYSIS, ONE OF THE CONCERNS I HAD WAS, DOES THIS PROJECT EVER BREAK EVEN IF THEY WERE TO TAKE IT ON ON THEIR OWN? Does it? I'd like to see that in the report. And then secondly, I'd like to know when it breaks even, what year is that? Is that in year 12, 15, 20, what have you? I think it's really important to know that because I hate to give away revenue that the city has worked hard to try to get. And to me, I look at it like a free gift. And the second thing I was concerned about is, Is there potentially a bait and switch? I don't know these guys. They don't know me. But let's say we give them the reduction, right? And they decide later to come back and say, hey, you know what? We're going to go with the original hotel plan. I want to make sure that they don't get that. That's critical to me as well. We got a deal in place. I understand the marketplace changes, but I think there's, you know, opportunity for that if we don't make sure that we block that somehow. So those were the only real comments that I had for tonight. I look forward to hearing the rest of the discussion. Thank you.

Thank you. What was your name?

Philip. Thank you.

Thank you.

Good evening, Mayor and council members. My name is Alex Moncada. I'm the owner of Lala Grill and El Torito here in Marina and also in Monterey. So I wanted to speak in support of the hotel proposal because we've seen firsthand what quality hotel brings to local businesses. The developer already operates two successful hotels in our area, and we've benefited from visitors they bring. Those guests dine in our restaurants, shop locally, and help support jobs year-round. This proposed luxury hotel isn't just another hotel. It has the potential to attract a different type of visitor, one who will stay longer, spend more through the community, and help strengthen Marina's economy. Those visitors don't just benefit the hotel, they benefit restaurants like ourselves, retailers, and many other local businesses. Just as important, this is an experienced local operator with a proven track record of delivering successful hospitality projects in our area. I believe supporting an experienced developer who has demonstrated success is the right approach for Marina. I encourage the council to continue moving forward with this project. Thank you.

Thank you very much, Alex. Margaret, come on up. You've been patient.

Thank you. I agree with Grace and Philip. I'm interested in the TOT tax aspect of this. My understanding is that you are proposing that the developer of this highly lucrative project would receive up to $25 million of our TOT tax. one has to ask why would this development require a huge financial subsidy from marina residents what is the deficiency in the developer's experience the project itself or other factor that requires marina residents to prop this proposal up at the expense of marina roads and infrastructure And how can this council realistically propose that Marina residents give a luxury development millions and millions of dollars and at the same time ask the same residents to tax themselves a 7% increase in their utility costs? obligations this will not go down well and uh i urge you to keep that in mind when you're thinking about tot tax and uh the utility tax people are are fed up with over taxation people are having a hard time making ends meet and it doesn't go down well to subsidize a big highfalutin thing with Marina's hard-earned money. Thank you.

Thank you very much, Margaret.

Good evening, Steve Emerson. I haven't been here in a while. Long time. The important part of the evening is it's USA 1, Bosnia nothing. So... A couple of things I just want to bring up.

Steve, it's two to nothing.

Oh, okay. It just happened then. So anyway, good. Thank you. Now you got me thrown off. No, anyway, so as many of you know, I'm in the investment business, and we look for long-term investments. We look at anything. I don't want to conflate too many things tonight. The idea that you have to vote on is continuing the concept and the agreement. That's the important part. Personally, I want to see Kaiser Marston's report before we even start talking about TOT taxes and whatever that is. But I think the importance of the development itself, just to give you some context, Spanish Bay was built in 1984. The Monterey Plaza was built in 1985. Those are beautiful buildings, still maintained, continuing to give TOT taxes and employment taxes and property taxes and all of that years and years and years later. So I'm not overly concerned about the short-term piece. I want to see what the numbers are. I want to see where that goes. So before I get ahead of myself on TOT taxes or anything else, I think we look at numbers. But we look at long-term investment. I think what Dudwell Group has done is go back, look at the market, look at what's happening, contract out a third party to make sure that they understand where this market is and what's moved. As city manager stated, the number of rooms that have been built since this whole concept started, changes the entire peninsula as to what's out there. So when you come back and do a relatively expensive survey and you come back and you find where that market is and where that hole is, I think changing this development for this is what's really needed and really looking forward to seeing where that goes. I love the development. You guys are going to get involved in what's here and what's there and all that kind of stuff. I THINK IT'S THE CONCEPT THAT'S IMPORTANT AND THAT YOU NEED TO CONTINUE MOVING FORWARD. THANK YOU.

NEW SPEAKER THANK YOU VERY MUCH, STEVE.

NEW SPEAKER GOOD EVENING MAYOR BRUCE AND CITY COUNCIL MEMBERS. MY NAME IS PAUL CHENG. I'M HERE SPEAKING AS A RESIDENT OF MARINA. Tonight, I think we have discussed about TOT. I think that can be discussed later on. But I think the main thing we are talking about is not the hotel. I would like to look at things from the city point of view. It's about the future of Marina. The hotel is just simply the catalyst. The real question before us is, what kind of city do we want to become in the next 25 years? I'd like to share this with what I call the VIP principle for Marina. V stands for visions. I stands for identity. P stands for prosperity. The visions. This great city are built through visions and the courage to invest for the future. Marina has already demonstrated that. Marina has good visions. Marina welcomes Joby Aviations Marina welcomed Kaiser. Marina welcomed the dunes, the new city. And Marina have CSUMB with innovations programs. And tonight we have another opportunity to continue the visions. I look at it. When you have the visions, the next thing, the vision will shape identity. For years, Marina has been a city. People are just passing through. to Carmel, Bapper Beach, Monterey. It's not a destination city here. It's just people just passing through it. And nobody know about Marina. When I told them I moved to Marina, where's Marina? I had to say Monterey. Oh, okay. So I think for years, Marina has been there. A well-designed luxury resort will elevate Marina image and strengthen our identity. It sends a message that Marina is a city committed to quality, excellence, and a bright future. With the identity, it creates prosperity. A well-designed resort is more than a hotel. It's an economic engine. It attracts conferences, weddings, visitors, and new investment opportunities. Those visitors support our restaurants and local businesses. It's not just coming here to, as I say, try to be a destination city. So they provide local businesses and the tourism. Success attracts success, encouraging more business, creating quality jobs, and strengthen marina economics for years to come. I believe the question is, yeah.

I have to interrupt because your time is up. I didn't notice. Thank you very much. I'm sorry to cut you off. Thank you, Paul. Anybody else here in person? Okay, let's go online. Let's hear from Daniel Orta. You tried earlier. Let's give you the first crack at it.

Great. Thank you, Mayor. Can you hear me?

Barely hear you. Your voice is soft.

Okay. Can you hear me now?

Yeah, a little better.

Excellent. So good evening, Mayor and City Council. My name is Daniel Orta. I'm a Marina resident, a Marina voter, and a CSUMB senior. So today I just wanted to be able to speak on item 4B. Actually, I'm concerned that this is not a good deal for everyday Marina residents. According to the packet, This luxury hotel may require about $25 million in hotel tax sharing and possibly split 50-50 between the city and the developer. However, based on the packet's own numbers, Marina could be giving up about $1.5 million in 2030, almost $2 million in 2031, and about $2 million per year after that until the developer receives around $1.5 $25 million. So that could mean more than a decade before Marina receives the full hotel tax. and location matters too this is near commercial area where restaurants and services are already becoming expensive for students workers and families who live in the area so while the packet says this project is aimed at affluent high-value tourists who are well the packet says the project is aimed at affluent high-value tourists who are less sensitive to price, and that may be good for the developer, but it also risks pushing Marina further towards a high-end visitor economy while affordable housing gets further and further out of reach for people who actually live, study, and work here. This project also brings villas, spa services, event space in a 600-seat banquet area, and more traffic into that area. So before moving forward, I would just like to ask the council to show residents a simple comparison of how much hotel tax money goes back to the developer each year, how long that deal lasts, what kind of traffic and what kind of price impacts are to be expected from this and how it will impact the residents and how this compares to affordable housing or other public serving uses for this land, which I understand is an option for this council.

Thank you. Thank you very much, Daniel. Let's go to Denise Turley. Welcome, Denise.

Hello. Hi. So I echo a lot of the concerns that I heard so far. So I'm going to make my comment pithy. And my comment is, so do you want to shoot your UUT in the foot? by giving the developer money? It's tone death. It's the wrong thing to do. And what about the Sangelia? Oh, yeah, we haven't solved that yet either. That's it. Bye.

Thank you very much, Denise. Let's go to Surrender Rana. Welcome, Surrender.

Good evening, Mayor, Councillors, and the audience. I'm speaking as a citizen, of Marina and I speak in support of the proposal. In fact, the proposal under discussion today is the change in the new development which is coming up from mid-size or mid-scale hotel number of hotels to one big resort i think this piece of land is most appropriate for this kind of hotel and as paul said that it gives an importance to the marina economy, I heard a lot of comments about the TOT sharing. We need to understand that it's a very big investment. Harvey is taking a very big risk in investing so much money and it will benefit to the city and to the developer both but the developer also need to be given some kind of incentive because taking such a risk it is not in everybody's everybody cannot take it so i think it is kind of balanced out and such a risk has to be compensated some somehow or the other and since this is based upon a market research changing pattern of businesses it will really benefit the community and give a new face to Marina as an attractive destination, business friendly and as a tourist destination because no such facility of this nature actually exists in this area and Marina will be unique from that perspective. And lastly, I'll say that Harvey is a successful entrepreneur. He's already built two hotels and successfully run. And we have full confidence. And that confidence comes to me because personally knowing Harvey, he is totally committed. He's a local and he has the interest of Marina at heart. And based on these considerations, I fully support that this proposal should go through. Thank you.

Thank you very much. Surrender. David Orta, do you have someone else in your household that you'd like to speak?

I would like to speak. Yes, I'm David Orta.

So David, you spoke already, correct? Correct.

No, that's actually my brother, Daniel.

Oh, I'm so sorry. Everybody else knew that except me. Okay, David, please proceed. Thank you. Welcome.

No worries. Thank you so much. Yeah, that was my twin brother, Daniel.

David, if you could speak louder, it would help us hear you.

Okay, great. Is that better? A little bit. Okay, awesome. Please forgive me if it sounds like I'm shouting then. Good evening, Mayor and City Council and other fellow residents. My name is David Orta. I am also a university student at Cal State Monterey Bay. I'm here alongside other residents tonight to urge you to reject the proposed amendment to the luxury resort on Opportunity Site 1A. First, this developer has failed to meet their original deadlines and deliver on their original performance schedule. Now, I know the staff report blames PG&E and infrastructure delays for this. But the developers shouldn't be allowed to use those delays as an excuse to completely rewrite the contract in their favor to build an exclusive resort. Instead, the city should hold them accountable and exercise its right to take back the land. And if we do, the Surplus Land Act requires us to look at affordable housing options for this site. City staff framed that process as a delay in the report, but to our community, it's actually really an opportunity because in California and in our community, local workers, new families, Hartnell College transfer students and CSUMB students are facing a severe housing crisis. We need affordable housing, not private luxury villas with plunge pools for affluent tourists. And second, I saw in the developer's original proposal that they pitched a hospitality training facility for CSUMB students as a community benefit. And just to be clear, university students do not need low wage resort internships. We need a roof over our heads so we can finish our degrees. And finally, in agreement with other residents' concerns tonight, it is completely unacceptable that the city is considering a $25 million TOT tax subsidy for this luxury resort. That 50-50 split of tax revenue should be going 100% into our city's general fund for our own roads, parks, and basic needs. We should not be diverting $25 million in public money to subsidize a playground for the wealthy. Please prioritize the citizens of Marina over political and corporate tycoons and reject this amendment. Exercise our option on the land and let's explore the site for the affordable housing our community actually needs. Thank you.

Thank you, David. Thank you very much. Let's go to, no, let's skip Don. Let's go to Don Hofer. Welcome, Don.

Good evening. Can you guys hear me okay?

Yes, welcome.

Well, good evening, Mayor, City Council. Of course, I think you guys know me, but for folks that are listening in, I'm a Marina resident, but also have been involved with the Dunes Project for many years. I work with Shea Holmes. um a lot of comments tonight i think i you know i appreciate everybody's comments but i want to point out one thing and that is that without doing this deal there is no tot that comes to the city as part of a future tot growth this is not a gift of 25 million dollars to anybody this is about growing the tax basis for the city of marina in a way that makes sense in a way that is financially viable for development to move forward. Harvey's been a good partner. We've worked with him for many years. And the vision of a full service hotel was baked into the East Cypress, I'm sorry, into the University Villages specific plan. It was part of the vision for the dunes that was cast back in 2005. it's always been envisioned that there would be a full service hotel on the hill. And so Harvey is working to follow through with that, which I respect. And I think as for those that were around at that time, the TOT tax portion of this was an incredibly important aspect of developing the Dunes project because it meant general fund growth for the city. And that's exactly what this project, proposal provides the middle the mid-market of the of the hotel industry in the monterey peninsula is flooded with product right now and i think one of the things that is important to understand is that while this project may have made sense a number of years ago with a mid-market product Today, it would be impossible to get financing for that product and move that forward because the market has been flooded with additional hotel rooms. Harvey has taken upon himself to move the product, the vision of the hotel to a much higher level. which is likely the only solution that exists in the existing hotel market on the Monterey Peninsula if the city of Marina wants to move forward with a hotel and wants to move forward with expansion of their tax basis. So I hope I'm making that clear. I think city council, you understand it. It sounds like a number of the folks in the community don't necessarily see it that way. They think that this would be a gift of TOT. I just want to reinforce the idea that it's not a gift of anything, right? We don't have the TOT today in the city of Marina to support this, and we don't get it without moving forward with this hotel. So I'd like to voice support for this.

and uh thank you don i'm sorry to cut you off don we really appreciate your input thank you okay thank you very much don let's go to christina medina dirksen thank you council members if you can hear me say yes yes

Okay. Christina Medina Dirksen, resident of Marina, and those of you watching soccer, it's two to zero. Just throwing that in. I appreciate this community conversation and want to stand in support of it for a couple of reasons. First of all, there is a legal concept called impossibility of performance. So if PG&E, which is notoriously being responsible for many stalled projects, not only in our county, but in the tri-county region, is unable to perform, therefore Mr. Dodwell and his team are unable to perform. So I want to call that out as one reason why you should continue to move along with this project. Secondly, there is a concept of corporate welfare, and that's a term that people throw around a lot. This is not the case here. And the reason I say that is because, first of all, we don't have this money now. The TOT that's to be collected, it's not in our pockets. And if Mr. Dodwell sells funds to, I believe, a tune of about $120 million, who amongst us is able to take the risk and able to come up with that kind of money in an area of town that requires prevailing wage. So if, for example, you were to move ahead with a suggestion for housing, which also is subsidized, it's the same thing. You would have to build housing at prevailing wage, which Mr. Dodwell is already going to do. But that would cost our city a heck of a lot of money when we have people talking and not supporting any new taxes. That's the only way it would happen. Secondly, I really want to express that we've had discussions about how do we support businesses and how do we draw them to Marina? And there's a lot of talk about that because the realization is that businesses like Mr. Dodd-Walls, like his gas stations, like Walmart, need our support to be able to provide for our tax dollars. taxes for our general fund look around people we do not have any major employers so we look to them with gratitude because they're the ones who are helping to pay for your streets and the salaries of our employees that go up every single year um lastly i really take offense with Somebody called him a tycoon. If you know Mr. Godwell, he is the first person to give anything and everything he has, whether it's sandwiches or time to our community. He is in no way any kind of tycoon. He's local. He lives in our community. He's very gracious. And the most important thing is he's a good partner and he's extremely humble. So I circle back to just remind you, we don't have this money right now. So what are we crying about? It's to come in the future. So whether you give him some help to be a partner or not, I really would urge you to continue our partnership. That's all I have to say. Thank you very much.

Thank you very much, Christina. Anyone else online that would wish to raise their hand for speaking? All right, not seeing anyone. Let's close public comment and address the questions that came up from the public. Philip asks, does the project break even?

And if so, how far in the future, 12 years, 15 years? And I don't know if we're done yet with the financial analysis, but Karen Tiedemann, who's working with Debbie Marston, Can you give us a don't know yet or should I ask Lane? Okay, let's ask our city manager, Lane Long. Thanks, Karen.

Yeah, I can tell you our ground zero with this project is the same way when... When Shea Homes was trying to build the hotels for five years, they said hotels couldn't be built unless the city did a subsidy. We just said, no, we weren't willing to share. It wasn't a subsidy, but it was sharing TOT. And we said, no, we weren't willing to do it. Five years, they walked away. Now, they would have made a ton of money if they could have sold the property to a hotelier. They could not do it. the project here our ground zero is if the project can be built um then without any uh uh partnership sharing of the tot it will get built without that What we've asked Debbie Kearns to look at is what it will take looking at all the development costs, the direct, the indirect, the operating costs, the debt, the equity, all those factors that go into it, the margins. And then from that, for the hotel to be able to be built, she'll say, this is much, if any cost. um of sharing of the tot will be made and so there's um the 25 million she just said preliminary just so that we're trying to be transparent not it we didn't talk with people about it now we talked a month or two months down the road they say why are you not being transparent so we're just telling you up front it's not done but she said preliminary preliminarily a hotel with this much investment is going to take some sharing of the tot revenue and again the hotel is built it makes no difference on the utility user tax we need that if the hotel gets built if it does not get built um The UT still needs to go. Any revenue from the hotel will not build the facilities needed by the utility user tax. So make that very clear. It's total two separate projects. But I can tell you, if the hotel can be successful and get built without any sharing subsidy, that will be our position. But that's what Debbie Kern will analyze, and that's what she'll come back to the city with.

So we don't yet have an estimate of when it would break even, right? No. That kind of estimate will be in the final economic analysis for this project.

Yes.

Correct? Okay. Jenny, do you have a burning question? We have some more. Brian, can you wait? We have some more questions to answer. I see some lights on. I just want to make sure. Okay.

All right. That kind of segues into Margaret Davis's question. And you don't have to repeat everything you said, but if you have any more to ask, she asks, why is this needed? What is the deficiency in this hotel that it should need help like this?

Yeah, it is the cost to build the hotel. It's strictly the cost. And if it can be built with all those factors, the operating costs, the indirect costs, and does not need any partnership assistance from the city, then we'll move forward with it. But if it was, she'll let us know that.

Okay. So another way of asking Margaret's question, well, another way of asking that question is if the final economic analysis says that in the circumstances for the banks to loan X dollars for $125 million or 120 million, whatever it is, they need to have some security. And if the city is going to partner with, by giving back TOT that may enable the banks to support this project. So when you talk about how much it costs, that doesn't tell me that there's a deficiency. So that's why I'm trying to bring up the banks and the loaning circumstances. Does it have something to do with that, that we need to consider perhaps this TOT sharing?

Yes, absolutely. Absolutely.

And I say that because that's exactly what happened with Spring Hill Suites. The banks were willing to.

Mr. Mayor, I'm just wondering if we could just stick to questions and answers by staff.

Yeah, I'm trying to answer the question the best I can and everyone in the room. OK, the next question I had was for affordable housing. Daniel and David brought this up. What is there a link to affordable housing on this hotel?

um i guess i'll put the link to it this way um the only affordable housing that is being built right now in our city is because of of subsidies with developers marina community partners shea homes is building all the homes here um affordable homes um sea haven which is uh formerly marina heights they all have revenue sharing agreements the property tax is shared with dunes the city did other sharing of affordable homes being shifted to the city that preston aprons park is paying And those projects would not have been built without assistance from the city. So I can tell you absolutely there would be no affordable homes built in the city right now. And we are the leader in Monterey County of all affordable homes because of the assistance that we have been providing to developers and innovators that have been moving these projects more that allow us to generate the income for affordable housing.

Okay.

Thank you.

Those are the only questions I wrote down.

Did anyone else note something I may have missed in the question department?

All right.

Let's go to Council Member McCarthy.

Thank you, Mr. Mayor. I want to start by saying incredibly stunning design. I don't know whose vision this was, but whoever it was deserves a lot of praise. It's just absolutely beautiful. And I also want to acknowledge the Dogwell family. They're an incredibly generous family in our community. And they give so much and so freely. And yet that also makes it complicated because sometimes it creates kind of a perceived or actual conflict that we have to disclose. But I want to thank you for your generosity nonetheless. Absent the staff report, So absent the CBRE report, I just want to clarify for the record, are we talking about a 50 million TOT share or a 25 million TOT share that would result in 12.5 million incentive?

We really don't know right now.

Well, OK, so the 25 million, though, this is in the staff report. Does that envision a 50 million TOT share?

No.

Okay, so it would be a $12.5 million incentive to the developer.

Well, no. No, if it was $25 million, that would be, yeah, it would be $50 million.

Okay, so we're talking about sharing $50 million worth of tax money with the developer at a potential 50-50 split. The CBR report we've heard folks in the audience talk about wanting to see that. I know I would like to see it. I know it was mentioned that there's some confidential information in there. I guess I'm just more interested in what the legal basis is for the confidentiality, and can that be redacted and shared with the public and the council?

Yeah, I don't know what basis that information has been developed, so I couldn't tell you how it's confidential. I don't know that we have a copy of it, but...

That's all proprietary information. As I met with Mr. Dadwell, he showed me what they have, but it's all proprietary.

Did we commission that or did Mr. Dadwell commission it?

Mr. Dadwell did.

Okay, thank you. Is there an appraisal on the land today?

With CBNRE?

No, the land that we... could come back to the city. So we, there was a purchase price of $3.6 million that we can reacquire the land, but what's it actually worth? Presumably much more. Is it 4 million, 5 million, 10 million?

It definitely is worth more than 3.6 million. No doubt.

A general appraisal. Do we have a general idea or?

Um, yeah, Don Holford probably has a better idea. Um,

OK, because I'm just in my mind, I'm thinking the 50 million just went to 52, 55, 56 million dollar incentive just with that, because we could reacquire it and sell it at market rate if we wanted to. And so that's that's to me, taxpayer money that we're further allocating somewhere else. And I'm not saying there's not merits to that, but I just want to be clear about what we're talking about. Could you tell me that the staff report is not clear about what development agreements have been missed or in default? Are they all of them or have some of them been met?

So it's our existing hotel agreement that we have that we entered into in.

Right, and so there's a number of deadlines. Have any of them been met?

Some of the early deadlines have been met, but the key ones, starting construction, the plans, no, none of those have been met from that point on.

Okay. I think... I'll start with some constructive comments. I mean, I heard a member of the public talk about a bait and switch and for me, that's kind of already happened. We had a competitive process by which folks could apply for this development on this parcel. An incentive wasn't always, it wasn't even talked about at that time. It was, And now we're kind of saying, hey, during this competitive process, which people did apply and they were interested and many people were interested in building a hotel at this site. This council, then I wasn't on the council, chose Mr. Dodwell. But now we're kind of changing the rules of the game midway without going back out for a recompete. And I'm just really concerned about the optics of fairness and. kind of stewardship of taxpayer money in that way. So I just kind of want to make that comment. I'm at four minutes and 46 seconds. I'll stop there for now. And we'll come back. Thank you, Mr. Mayor.

Thank you very much, Brian. Let's go to Councilmember McAdams.

Thank you, Mayor. And I agree, the vision of this hotel and the amenities is just stunning. And it is something that our city does not have. You know, we don't have a wedding venue. We don't have a conference facility available. so i am i'm very excited um for this project um and so with that the task at hand for this evening is for council to provide direction is that correct okay so i just want to be clear we're not approving the project we're not approving any cost share we're just providing direction to staff to return okay good i just wanted to put that on on record um I would like to see an updated schedule of performance and showing what has been met and the date. And so in the packet, that's B1 and B2, because some of the dates start all the way back to January 1, 2022. So I would like a better understanding of what has been met and that date. And I think that's something that Councilmember McCarthy was alluding to. If the city is considering sharing future tax revenues, especially if we're talking over $5 million, I mean, when we talk $25 million, which really is $50 million, I want to have a panic attack. If we are going to talk about that, then I want a community benefit program. And what does that look like? And that can be very creative. Mr. Dodwell already pays very good wages and provides benefits to his employees. Maybe a discount for teachers or, you know, firefighters. I mean, there's just there's lots of community benefits. And I want that in writing. So if we are going to have a community room usage, how many times a year? Who who can who who can receive that benefit? affordable housing funding, local hiring commitments, which the Dodwells are already really good about. So I definitely would like to see a public benefit program, just some ideas and concepts. I would like to better understand the amount of TOT that the city is losing because the project is out of compliance and delayed. And so, yes, phase one was supposed to be completed as of 12-31-2025 and phase two being completed two years after that. So 2027. So that's how far we're behind. So how much is TOT approximately is the city losing in this sort of two to four years. I would like to understand that number. And also for me, you know, I'm glad that this is coming back to council. And I hope that there's no hurry, especially with the new city manager coming on board. We have our new assistant city manager, our new public works director. I want to give time to staff to get really familiarized with the project, the potential changes, you know, meet with the team and really be able to bring back some thoughtful and meaningful options for us. Initially, when I read this report, I mean, I was confused and it seemed like very determined and I didn't understand where this $25 million amount came from, but actually it's really 50 million. So I think we have to be careful with what we're providing to the community and that messaging. So those are, yeah, That's the information that I would like to see come back. And again, I would like to allow a good amount of time for our new city manager to really understand and get familiar with this project and bring the best ideas forward. Thank you.

Thank you very much, Jenny. Council Member Biola?

Thank you, Mr. Mayor. First, let me just say that we were talking conceptually because we don't have the report yet on the financial analysis. It's almost way putting the cart before the horse, I think, because we get people stimulated to be thinking in a certain way when it may not be legitimate at all. So I think we need to kind of back away and making too many assumptions, both from the dais and also in the public. um first i want to say uh ask um initially uh it in the history of this project we it was reported that marina community partners were not able to find a hotel developer to build a hotel of not less than 150 rooms etc so that's the only reason why marina got to buy the project of the property so we have to say what was wrong with this property that all of the universe of developers did not want to take it on but harvey doddwald did and i think that's a really important part i i don't know if we have the answer to that why was it such a you know a hot potato and maybe our um our city manager or um don hover can answer that do you want that answered now Well, if I have five minutes, I'm going to keep going. I have to be parsing this out. Also, you know, I know you can see it. You drive around Monterey County and you see the hotels just popping up, including another luxury one in Pacific Grove. And I forgot the name of it. It begins with an M. but the one in Seaside. So we know that this is a moving target and people have to understand that there is a real risk to taking on hotel development. Yes, the cities want it because it's one of the top revenue producers and we all know that we have so much need for money in our town to get the things that the community wants us to build. But it's a moving target and there is tremendous risk for that. And as we heard from our city manager, we did an awful lot of incentivizing, not just for the affordable housing, which was news to me, but we've done, of course, for all kinds of other projects, including Mercedes, etc., because we want these developments, because it's important to us if we're going to fund the other projects that are near and dear to our heart, we have to have revenue. We are the leaders of affordable housing, as our city manager said, and we do need more, but it doesn't have to be just Marina. Our Rena numbers actually went down in this last round because we were taking the unfair burden of our over share of building affordable housing. So it's not that Marina's negligent, it's the other parts to the region. And building affordable housing, it takes a lot of money, guys, with hardly the revenue. The revenue stream from building affordable housing for Marina is is is small it pales in the face of what something like mercedes could do for us what what um harvey dodwald's project will do for us so we have to think big picture on this we cannot think just you know in in terms of a small uh perception of what these projects are and this is going to be a huge huge project for marina so i i just want to say for the the record how important that is um Probably my time's up. So could I get the answer about why no other hotels wanted to build on what I consider a beautiful site?

Sure. The former Ford property has constraints put on it that no other property has. on the potential and certainly no other property in Marina has. And so the biggest ones are typically developers who don't have to pay prevailing wage costs, private developers, and that's a requirement. that is put on auto development. And so we're told by all the developers that typically the construction costs are 30 to 40 to 50% more on former Fort Erd property. And so for a home that's constructed, it's going to cost, that construction cost is going to cost that much more. For a hotel that's built, it's going to cost that much more. There's other constraints and costs that come, but that is the primary one.

Thank you.

I appreciate the answer. Thank you, Cathy. Mayor Pro Tempischer.

Thank you, Mr. Mayor. And thanks to all everybody in the room here and everybody online who gave comments or who is just here to see how we are discussing this beautiful project. I am also very impressed with the designs. I looked up the architect. I was very impressed with what I read online about the architect. And, um, so anyway, I would love to see this happen for our city, but I do understand the concerns and, um, I do want to repeat what I've said before, and people don't like me saying this, but you don't want to know how often I've heard Marina could have had the Costco. And every time I do shop at Costco, I know my dollars or hundreds of dollars go there instead of to our own city. And I always understood that Seaside or Sand City got it because they did offer an incentive, which our city did not. But people already said we won't give away any money. You know, we don't have it now. It's sharing what can come in if this gets realized. And I appreciate the remarks from Steve Emerson about Spanish Bay 1984, Moray Plaza 1985. Can you imagine how much TOT they received in those decades? So, yeah, this is for the long term. The short term, it might... People might not understand why we do it, but it's for the long term. And it will be a matter of, what is it, five years, seven years maybe? I don't know the period, but what we're talking about. 10, 15, but not 40, 30, like for the dunes?

No, definitely not anything in that term.

So we're talking about 15 max?

It's an amount that depends on how much would be needed. Yeah, 502 short, yes, for this amount.

And also to... put it in perspective, you know, the Mercedes 5 million investment for Mercedes was, is how much roughly?

They're 40 to 45 million.

And this can be like almost, well, definitely four times as much. I think the investment, maybe five, I don't know. So just to put it in perspective, it's an enormous investment. It's enormous risk. And, um, I know that the developer will have to put up his own hotels and probably his own residence as collateral. So there is a risk that not everybody will be prepared to take. Okay. And yeah, we need income generating businesses so we can pay for maintenance and services in our city. We all know that. No report yet. We've heard that. So, and yeah, affordable housing, what was brought up. I know people are struggling and especially young people, students, but this is not. So what the plan for this is that people can afford it. They will come to our city. They will spend their money in our city. So we will get TOT, which we then can use for our services and maintenance. And I would just like to end with the longer we wait, the longer it will take before we'll start receiving any money. So thank you all. And thank you for, oh, and thank the architect for the presentation. I'm sure he had to cut it short. So thank you.

Thank you, Elizabeth.

The number of rooms seems to have gone down. So the original proposal that we approved a few years ago, 200 rooms in one hotel and 100 rooms in another hotel, which equal 300 rooms total. Today, I'm hearing 125 rooms and 25 villas in the staff report and 30 villas, according to Mr. Tiedemann. So how many villas are we talking about, 25 or 30?

We're talking 25 villas, but some of them may be two-bedroom ones, and so the – what you charge for the room might be double, and so a 25 – Villas may be equivalent to like maybe 40 villas.

Okay. Well, let's just for easy math, let's say 30. So 30 villas. So 125 rooms plus 30 villas is 155. That is approximately half of the 300 we approved. So. I want to ask that the analysis we get in the near future when it's finalized compares the revenue Marina would get with 300 rooms under the original proposal versus the 155 units under the new proposal. I think that's important to us. And I hope the analysis also puts a cost estimate to construct the original proposal compared to the new proposal. And the reason I go back to the original and the new is the bait and switch question that Brian brought up and Philip brought up. When we had the... four developers bidding to build the hotel. And when Shea wasn't able to find a hotelier to do it, there was no revenue sharing on the table. If we would have put out a request for bids and say, hey, we've got up to tens of millions of revenue sharing we would consider, they would have included that. And Harvey would have included that. in all of their proposals because that's a carrot, right? They're not going to turn down a carrot if it's offered. So to some extent, to that extent, it was a bait and switch in part. To Mark and Harvey knows this too, this answer to the question I'm asking, When would the 100-room boutique hotel be built? Is that an opportunity when you had enough cash flow and things were settled down, you would then build another 100 rooms for the boutique hotel? And maybe you can come up, Indy or Harvey or anyone on your team and tell us that boutique hotel future.

Thank you, Mr. Mayor. Yeah. So at this point, we are building 125 rooms, the hotel rooms. Actually, in 125 rooms, there are two bedrooms. The unit counts only one. So there are more rooms than 125 rooms.

Okay.

So if I check into a room that has...

bedrooms two bedrooms yes and then by the dunes math that would be two hotel rooms i don't know exactly but i will i will let you know on the second thing same thing like um mr um city manager like he said there are more rooms in villas same way but the main thing is what uh the question is 150 rooms will generate double the revenue than 200 rooms going to.

OK, so that's what we need analysis. Now my question, Harvey, because I didn't understand the boutique hotel.

When will those 100 rooms be built? So it depends on the demand. The demand? Yeah, demand and supply. Like, you know, we plan to build an ASEAN element. Now, ASEAN element just does not make any sense economically because it will start cannibalizing local marina hoteliers.

Okay, so when financial circumstances are appropriate, the 100-room boutique hotel could be developed. Yes. It could be five, could be 20 years, who knows?

But there's another thing I need to add. Maybe after we build the first 150, like 125 rooms and 25 villas, we will come to know demand. Is the villas more in demand or hotels more in demand? If villas, then we will add more villas. Okay.

Thank you, Harvey. One more question for you. I heard about the event center. In Mark's presentation, then I heard about a ballroom. Are they the same thing or different floors, different rooms?

It's the same thing, but like we have two venues. The first one is, Mark said, 55, but it's close to 6,000, the first one, the first floor. And then the third floor is also going to about like 4,000. So they're different rooms?

Yes. So you have a ballroom that's separate from the event center? Yes. So you'd have two different events at the same time?

Yes, at the same time. That's correct. The bigger banquet hall would have three meeting rooms. The three events can happen at the same time. Okay.

And Harvey, what do you say to the... if someone were to claim this has been a bait and switch, that we didn't offer you tax sharing when you competed with others. And today's version may well include tax sharing. So it does appear to be a bait and switch from that perspective.

One thing is we are changing from this select service to a luxury hotel. There's a day and night difference between the amenities. So if we do the select service, you can build without that. I already did two hotels without that. But if you do the luxury hotels, the amenities cost a lot of money. You have all luxury rooms. There's a two swimming pool. There's a spa. And there is also what's called the villas. So banquet halls. There's a greenhouse. So there is so many amenities you cannot build like you are not building in a select service hotel. So that's the difference. And also the same time, circumstances completely changed. When I built the other two hotels, You know, the interest rate was less than 4%. Now it's more than 8%, about 10%. So the cost is almost doubled to lend money, to borrow money. So the circumstances have changed.

Okay. This is the last question I'll turn it over to others. The deficiency in the hotel, some have said, you know, why do you need this? What's wrong with the hotel? So I tried to ask it earlier of Lane. I should have been asking you. Why is the tax sharing needed to pencil out today's proposed hotel?

The reason is because the cost is much more compared to the select service. So that's the one reason.

Can you give us a ballpark, like before and now?

Before that, when I present the ASEAN element, my cost was only close to under $75 million. Now we are talking about $175 million.

Okay, Harvey, I haven't heard $175 million. I've heard $125 million. But are you expecting?

It's much more. It's much more because now we have a couple contractors. They gave us a bid. And when they see the site, the site is not easy to build. There will be a lot of retaining walls. When I had the same comparison, when I had a stranger suite and home to suite, that was a flat lot. There was no grading needed. All the utilities were right there. Now I have to get all the utilities, infrastructures, gradings. That's like there's a 22-feet difference. The Imgen is 102 feet, and if you go up, it's 125 feet. So there's so much difference, and we have to build. So cost would be much, much higher compared to what we built before.

All right.

Thank you very much, Harvey.

Okay, let's go second round, starting with Council Member McCarthy.

Thank you, Mayor. I think I'll start. I mean, it sounds like what I'm hearing is a consensus on the dais that, one, that the vision or the dream here is absolutely stellar and something that everybody wants to see. Two, and I'll speak for myself, that absolutely revenue sources that we don't have today are a net benefit to our residents. I think the question is, how are the details made or how is the sausage made, right? And how do we get there? What is the level of transparency and fairness that we provide to the taxpayers that we serve? You know, I think it's important to mention, and Mr. Dodwell has done really well on the two hotels that he has built. I think there's only two hotels in the Dunes area now, right? On Fort Ord as a whole. And what I heard from the developer, and I know this isn't what he said, but what I kind of heard is that if I build this mid-scale hotel, it's going to take away revenue from my other properties. Because really, I mean, and I'll just use the word monopoly, right? The developer has a monopoly of hotels in that area. And so I say that because I think that this particular developer does have a number of interests, right? beyond just construction costs, right, beyond just building another AC or Marriott as the original development agreement states. What I also heard is many folks infer that Mr. Dodwell is likely the only one that would take the risk and that can complete this project. what's great about hearing that is that if we, to me, that means there's no reason not to kind of go back to the table, right? We're already several years behind on, on the development agreement, um, recompete the process and, and see if that's true, right. In the interest of serving the taxpayers and ensuring that they're getting the best deal that they can. Um, so I think for me, um, When it comes time to make a motion, I'm not ready to make this yet, but I'm likely to make a motion that we direct staff to evaluate and initiate the appropriate actions necessary to terminate the existing development agreement. That is in default already. Consistent with terms and applicable law. Return to council with options for reopening the hotel site. And I understand that there's a surplus lands act concern. My personal opinion is that's a very minimus concern. The land is worth a ton of money. There's likely no developer on the planet that's going to pay market rates to build affordable housing there. But to a member of the public's perspective earlier, if they do, let's have that conversation because that's something we also need very desperately in this city. And then we get some more information about the CBR report that we ask all qualified developers to come to the table and we conduct an independent CBR report, not one by one particular developer that's interested in sharing $50 million, but that the city commissions that report and retains it. And again, for me, doing that presents little risk to the developer. If it is true that they're likely the only ones that can complete this project, um look it's not going to be built in the next couple years anyway i mean we we see in sand city a similar luxury product that has sat for how many years 20. um we you know seaside was actually really good getting their luxury product built and the reason they did in my opinion is for one they had a really strong development agreement that included I believe penalties for not meeting certain deadlines. There was a lot of incentive for those developers to come through. And so I just think we need to really re-envision this whole thing and really add a level of transparency and fairness to the taxpayers that we serve. Thank you, Mayor.

Thank you, Brian. Council Member McAdams?

Thank you, Mayor. You know, I really agree with what Councilmember McCarthy just said, especially with our, you know, our tax sharing with Mercedes, right? I mean, I think that we are really having, it's not fair. Why on earth would they be in compliance? I mean, we've shown that obviously we don't necessarily enforce or, you know, whatever deadlines or deliverables we, for whatever reason, the city is, is not taking those, you know, for real, which is unfortunate. So, I mean, I do think starting over is good. I mean, I had other, sort of questions and asks as far as like the preliminary financing plan and exhibit c so really all the exhibits that are dated 2022 do does the city have those updated or is that part of the direction you're looking for today to update what what Well, all of the documents that are in the agreement right now are from 2022.

I could update the whole agreement, yes.

The whole agreement. And so the financing plan is probably different than what was provided in 2022. Is that correct? Correct. Great. So do we have the updated financing plan?

No, that's what Kaiser Meister is working at.

Okay. Okay. And then just a question for the city attorney, because the deliverables in B1 and B2, the schedule of performance, you know, we're not really clear on what has or hasn't been met. Does that void this agreement or is that language not in this agreement?

So we would, I'm sorry, B1 and B2.

Yes, B1 and B2, which is the the schedule of performance. There it is.

So B1 and B2, I don't know that they have not been met. Perhaps the city manager.

He doesn't really know. Like some have, we're not, that was one of the tasks that I.

So the financing plan for phase one says no later than January 30th, 2022. And then the hotel operating agreement for phase one, December 15th, 2022.

Yeah, we'd have to go back and look at the documents. But the biggest – we have never gotten a submitted – hotel construction document. It's always been looking at the different tribes, trying to fit it there, looking at the other 2.7 acre parcel of the dunes, trying to make it work. Once there, you look at the slope and it makes a huge impact. And so they never got beyond the design uh point but at that same time we had it even if they were to that point they couldn't develop the project just because the infrastructure that maria community partners needed to build they weren't able to get that in there and so there was years from when we had the agreement that they couldn't build it anyway because the infrastructure wasn't there

Right. So what my question is to the city attorney is because the deliverables were unclear, we definitely know that the hotel is not like phase one is not being completed by 1231 2025. Does that void this agreement?

Yeah, so what I would say is that, number one, I think we need to investigate whether or not those actions were taken. And following that, I think we would review the agreement and determine what the next steps would be with respect to that. And we can come back to council and let you know.

Excellent. Okay, great. Perfect. Thank you for that. So I... I'm happy to second your motion when we get to that. I do think that that's fair, especially with the project has really changed. I don't think that it's fair. And perhaps no one else will want to participate or submit, and that's fine. But I mean, when we're talking about whatever dollar amount, millions of dollars, I think that we need to provide that opportunity regardless. I mean, is that is that true? Wouldn't it have to go sort of out to rebid anyways?

I'm not sure if it needs to go out to rebid. I think whatever council directs staff to do is what would be done. I think in this sense, if you wanted something that if you were going to do a program like with incentives or any other kind of development, I think you'd want to see what is out there.

Yes. Okay. Yeah, absolutely. Great. And so, you know, and with that, again, I'm going to talk about like a community benefit program that is very important that we talk about because this is taxpayer dollars and there needs to be a resident benefit or some sort of community benefit. Thank you.

Thanks very much, Jenny. Council Member Biala?

Thank you, Mr. Mayor. So I know we're focusing on the number of rooms as the benchmark, but we have a conference center here that will house, it will be able to host up to 800 or I forgot what the number was.

Yeah, I think 600, 700.

Basically, there are more than two event centers, so it's close to like 500, you can say. 500, okay.

Can you break that down between the two? What do you say?

The two?

Like how much can the event center hold?

How much can the ballroom hold?

It's the same thing. There's one on the rooftop that's close to 4,000. So that can handle about a couple hundred people. And then the first one is about 6,000. That can handle about 300 plus. So approximately 550. Yeah, yeah.

Because they're on different floors, right? So they're additive. We're not overlapping them. They're on different floors.

Different floors, that's correct. And at the same time, we can have a few events.

Couple events. Okay. So my point is that we're focusing on the number of rooms, whether you're meeting a 300-room target. And what I'm saying is that if you count in some of the revenue generated by those conference rooms and banquet events, that adds to it. Maybe it isn't going to be 300 rooms. hotel room stays, but it will be revenue generating because of that special opportunity that those events and the banquet halls offer. That's my point.

That's correct. Revenue is pretty much almost the same as what the room is going to generate. Because there will be the bar, a rooftop restaurant, and there's two event spaces like banquet halls. So revenue will be much more than, probably I think it's pretty much the same like we are going to generate from the rooms.

Yeah, I just want to put that in so that we don't discount that special amenity of the hotel. Okay, thank you.

Kathy, can I ask you a quick follow-up question? Sure. The event centers that you're talking about, I can see would generate sales tax, but I don't think they're going to generate TOT tax.

Right. They're different, right? Yes.

But I would guess the sales tax would be dwarfed by the TOT tax. I don't know.

yeah that that would be correct hey just a quick off the napkin the original question um this hotel at 150 rooms would generate probably two and a half revenue two and a half times the revenue of a 200 of the existing 200 rooms hotels and we'll see that in the financial report You'll see that in the financial report. In addition to that, you will see the sales tax revenue generated from this hotel. You'll see the spinoff sale tax revenue and the economic factor as it brings sales to the whole city, whereas the current facility doesn't. But when you have our receptions and wedding joint uh and weddings and different things like that it'll have spill off forever to the whole city will impact the whole uh city and so the financial report will include it's more than just sales tax revenue for the hotel all right thank you Kathy do you have more input uh yeah I do um okay um

So I understand the need for flexibility in sort of the evolution of this hotel because your first assessment of the market regionally, because we can't just look at marinas, said that the smaller two hotels were open we're going to be okay. But now we've got so much new development of hotels in the region already happened. They're already open for business now. That's how fast things go up. And so I understand what you initially didn't need an incentive at that time because it was far less money for that level of hotel. Now that the market is demanding something that is different. Now you feel like you need to ask for an incentive. That's correct. Okay. So I just want to point that out because, you know, we don't want to build something for which it's not going to be a success because there's so many hotels everywhere else. So we need to be really sensitive to that need that in some ways these, and it's a strange concept because I personally couldn't stay at a hotel like this, but it seems odd that, this kind of hotel, it almost becomes inflation and recession proof because there's some kind of a thing going on where that level of customer isn't affected by the market. That's true. So that I thought was an interesting concept. Okay, but I do want to say that, emphasize again, there is no risk for marina. You're taking all the risk. If you go bankrupt because of this, it's on you. We don't risk anything. And we're going to get potentially huge benefits. And even if we do an incentive for five years or more, this hotel will be in Marina for 100 years. I guarantee it. It's going to be like all the other ones that we've been talking about on the peninsula. So this is an entirely different project for Marina to be engaged in. I think we can see that as sort of iconic for Marina from now until 100 years from now. So anyway, it's not a comment for you. You don't have to stand at the podium. And also, if we are in favor of this project, as it sounds like everybody's saying it's beautiful, we want it, etc., etc., then I think we need to act as if it was that important to us. Putting us back now and saying we're going to start over. I mean, there have been years dedicated to this already, and I can't even... estimate how much absolute money has been poured into by Mr. Doddwall to get it to where it's at today. So I am really opposed to us saying that we're going to start from ground zero again and hope that somebody else out there is going to undertake this. I think that's asking way too much. And we will, my gut on this, and I've never said this to anyone, but my gut is that we are in danger of losing this project if we do that kind of thing. we are we are i think we are positioning ourselves as being uh as being more unfair and more inf inflexible for something that apparently we all seem to want at this point in time so thank you mr mayor thank you very much kathy let's go to mayor bertrand fisher thank you mr mayor yeah i wanted to start

I could have just repeated what you said for so many of the things. Because when, Mr. Mayor, when you said how much revenue would we get for 300 rooms instead of the 125 plus 25 villas, I also wrote down the question is how successful will those 300 rooms are? Because we all heard that there's so many rooms have been added already in that same segment of the market that it's probably not as successful as having one luxurious hotel. So plus the event center, the ballroom and the restaurant, et cetera. And also from the staff report, the upper upscale luxury market shows high resilience compared to mid-scale segments. Because it's people with money, they will go anyway. Whatever the market does, they still have enough money to go to such a hotel. So I do have a question, or actually two, probably for the city manager. The one parcel that Mr. Dudwell bought from Shea, Marina Community Partners, does it have the same option to purchase for the city, or is that separate? Can you hold on to that and develop it for housing or hotels or whatever you need?

Yeah, Mr. Daniel can probably comment on them more. It's my understanding. It's an escrow for 60 days. Most likely will not purchase that property. He doesn't have an agreement to move forward and then the dunes will continue to have that property.

So he can still pull out of that. Yes. Okay. That's good to know. Because it's $3.6 million. It's not nothing. Yeah. And another question I had, how was this project coupled with the project for the gas station and the car wash and the convenience store? Totally separate?

Completely separate.

Completely separate. But the developer, Mr. Dutwell, probably... did that because he knew he was also going to build a hotel or three hotels there. So I think I agree with Council Member Biala that I don't think it will be good to start over. I think it will be unfair for the developer who was stuck with the gas station that he didn't even want to build. and not getting the chance to proceed with this project. And also, I think it will not be fair for competitors to already now have an almost complete plan to look at. Like, well, that's easy. That's already done. I can tweak it. save a lot of money there, or a lot of designing power. So those are my remarks. And also, of course, the longer we wait, we know the cost, it's going up as we speak. So the longer we wait, the more expensive this will be. And yeah, and I agree, we could lose the whole project. I'm afraid of that. So thank you. No questions. Yeah.

The staff report preliminarily estimates $25 million would be needed, and that would be half of $50 million.

The staff report states that the first three years, the hotel would generate about $11 million in TOT. which would be split, you know, five and a half, five and a half. But anyway, it takes three, three years to make 11 million. So approximately 15 years to make 50 million because 11 is one fifth of 50 more or less. So three years times five, you get 15 years. So we're talking about preliminarily in the staff report, 15 years of TOT being shared 50, 50, um, I have a question for staff. In the other options, the last slide here, it says negotiate a new performance schedule for the existing development agreement. And my question is, is this dead on arrival if the developer says he's not interested?

No, the whole development agreement really needs, it needs to be amended because it needs to be amended for dollar terms from timelines to.

We told the developer, thanks for the new deal. Right. we're interested in the existing development and for you to build it, let's do a new, negotiate a new performance schedule for the existing development agreement. That's not a new hotel. That's the hotel that's envisioned in the current agreement. I'm not sure. So Mr. Dadwell, if we were to say, we're not interested in the new design, we want, we want you to build what's in the development agreement with a new performance schedule. Is that dead on arrival?

It's a kind of yes. The reason is because a CBRE study, Rob Keith is here. He can explain that. That does not make any financial sense to build a select service. When you develop the new hotel, select service will basically take revenue from the marina hotel. Cannibalized. Yeah. I mean, from Hampton and from Holiday Inn Express. Yeah.

Okay, thank you. I wanted to know from you, but Rob, can you come up and tell us that from your perspective, whether or not

IT WOULD BE A WISE MOVE TO NEGOTIATE A NEW PERFORMANCE SCHEDULE TO BUILD THE 2022 PLAN.

NEW SPEAKER THANK YOU MAYOR AND COUNCIL MEMBERS APPRECIATE THE OPPORTUNITY TO SPEAK. RALPH KEIF PRESIDENT CEO OF C MONTEREY. SHOULD BE CLEAR WE'RE NOT AN ADVOCACY ORGANIZATION. I'M HERE FOR PERSPECTIVE. PERSPECTIVE ONLY. SO TAKE WHAT I SAY WITH THAT IN HAND. IT'S ABOUT ALMOST 13,000 HOTEL ROOMS IN MONTEREY COUNTY. over 8,000 of those are limited service. Predominant is limited service. The new product bills that we have in Sand City add to that. The Kempton in PG is slightly higher scale. The proposed project, just objectively speaking, diversifies our product as a county. And I've heard a lot of commentary here that I think is really great, because you're not just looking at Marina, you're looking at Relative to the rest of the destination, which I really think is important. The project that you're considering tonight is very different from anything that we have here right now. And we have a luxury program, and there are 10 hotels throughout the entire county that are in that luxury. Think Post Ranch, think the three hotels at Pebble Beach, think Bernardist, Carmel Valley Ranch. Each of those is very different from each other. This project is very different from those. And what makes it unique, I think, is that the event space is When you think about the rooms, 300 rooms versus 125 rooms plus villas, there's nothing like that here. And I think you're wise to consider, first of all, the person traveling for a conference or an event, according to tourism economics report that was done in 2024, is about 158% the value of someone just coming in for a leisure visit. But think about it beyond that. That space makes you eligible for travelers on a Tuesday night in January. Think about the off-season time of year. The people coming here for conferences and events, that's when you want that space, and you don't have that right now. And we have about 24 or 25 hotels that have any kind of meaningful hotel space, and we have a million-dollar group marketing plan to focus on that. We also have a luxury plan to focus on that. So I guess what I would say is that this gives you a lot of – and appeal. And what I've heard, and Lane and I talked about this a little bit, and a gentleman earlier said about VIP and what that stands for for your city. Where do you want to be? How do you want to be positioned from the tourism economy standpoint? From what I've heard is that Marina is, and I've heard it said a lot of different ways, not by me, but the gateway to Monterey and all of that. That's really good, thoughtful positioning. Seaside's thinking about that too. Other jurisdictions are thinking about that too. When you have, I think, objectively, I guess I'm biased a little bit, so I'll admit that, you have a real opportunity. The last thing I guess I would leave you with is that of the 10 luxury properties in Monterey County, of those 13,000 room, about 1,000 of them are the luxury properties. They generate 26% of the total TOT that Monterey County generates. They disproportionately outperform in terms of TOT and sales tax. So 300 rooms to 150 or 155 rooms. You got to really look at that TOT differential, which is considerable. And of course, I can follow all of this up with additional information in the future.

Thank you, Rob. I hope that you get that information through our consultants into that report that's going to be finalized.

Absolutely. We'll do that. I've got to run to the airport to pick up my wife, but I appreciate this opportunity. Thank you. Thank you. Drive safe.

Okay. I look forward to the next round. I had some comments. Those are kind of all my questions. Let's go to the third round, starting with Council Member McCarthy.

Thank you, Mayor. So a couple of things that I heard from the dais, I just wanted to try to clarify. One was that the three point six million dollars, just for clarity, that was for the bigger lot, the nine, the original lower lot. Right. The nine lots that he recently has an escrow, presumably he has purchased for much, much larger. And that goes to show. the increase in property value right that has happened over the last couple years um and and so you know again that goes back to my earlier comments that if we do retain uh ownership of the land you know it is likely word we would pay 3.6 million dollars because that's part of the agreement but we would have land that would be worth let's five, six, $7 million, whatever it is. It's instant value to our city, right? And so I just want to keep that in mind. The other thing I heard was no risk for Marina. Look, the reality is there's tremendous risk and it's execution risk. We know that quite frankly, Mr. Dodwell wasn't able to finish the Springfield Suites in time. Now that execution risk actually benefited the city of Marina because the The hotel was built. Right. And the incentive wasn't given. So in that way, it was actually a good execution risk for Marina. The the Seadeck Hill site has an execution risk which has penalized Marina in a big way. staff report mentions millions of dollars of tot revenue that would be generated by the legacy hotel product which we're not collecting um that could carve away you know the needs for city facilities right um we're not collecting because execution rates the hotel is not built right and so um my point is there is a tremendous amount of risk i've had conversations with the city manager over the years i've said hey lane um you know as different hotels are built in the region we're losing our leverage rooms are becoming more saturated we heard that from mr o'keefe um everyone is taking advantage of this market except for marina that that's kind of cut that ship has sailed it's come and gone rooms are saturated we have less leverage today as we than we did um several years ago and i agree with that uh You know, I just have to reiterate that what we're talking about tonight is, and this council will decide, do we go out in a competitive process and make this at least appear transparent and fair to residents of our city? Or do we give $25 million to someone who said they were going to provide something else? And I mean, tongue in cheek, if we do that, how do I get in on that deal? That's fantastic. Like, let me bid for something, say I'm going to provide it. Right. Then say that I'm not. But if you give me twenty five million dollars, I'll do something else for you, you know, and not go back out for a competitive bid. I mean, that is just beyond wild to me. And I just hope that folks on the dais really think carefully about what message that sends. I guess a quick question for staff. If we do go out for ReCompete, and when we went out for ReCompete the first time, did we reach out to groups like the Asian American Hotel Owners Association, Hotel Investment Conference by Northstar, Boutique Lifestyle Leaders Association, all these different hospitality groups? How did we solicit those RFPs in that first round?

I don't recall. Karen, do you recall?

I recall that the city put out some information to hoteliers that we knew got the word out in a limited fashion. And so did Shea. And we got four Proposals.

Thank you. And so what I kind of just heard and what I believe is that we probably didn't do as good of a job as we could have. If we take this serious and go out more broadly, as we do with our hiring practices, right, make sure we're reaching people where they are. Yes, it is possible that we may get some other interest there. Um, and if we don't, again, to me, there's no harm, no foul. We have a developer that has created a design and to council member Fisher, I don't think somebody, I mean, I'm sure that there's some intellectual rights, intellectual property rights on this. I don't think somebody else could just take this and build it. Um, but we have a developer that's already done the work. As you mentioned, I agree with that. And so to the developer, um, There's no risk because they've already done the work and we can at that time decide whether we want to move forward or not. And that's a discussion that most likely a future council will have because I don't know that this is going to come back in a fair, transparent way with the surplus lands act before November, but maybe it will. So, yeah, I'm at five minutes. I just have to reiterate where I stand. There's a real important piece about being transparent and fair to the public and sending a message that we do things legitimately and we do things fairly. Thank you, Mayor.

Thank you, Ryan. Council Member McAdams?

Thank you, Mayor. Tripepe Smith recently did polling on the utility user's tax. Was potential revenue sharing with the hotelier included as a question?

No.

OK, so if you know, I think if we are going to go that direction, you know, that's that's. Opposition messaging on a silver platter. Right. I mean, campaign is marketing and of course, there's always misinformation. But I think that we really need to be careful with that. And I am really disappointed about the timing of us talking about this.

so with regards to the land does the city have an updated appraisal or is that something that is forthcoming with the with the economic report uh we don't own the land and so no we haven't done an appraisal of the property um and that um appraisal and i don't believe will prove part of the economic report karen do you have a sense on that no

You could obtain an appraisal. It will take time and cost money.

Right.

The economic analysis most likely won't contain a full appraisal of the property. But once again, you don't own the property right now.

Okay. So there's not a benefit to the city to understand what the current value of the property is? No.

If you were to exercise your option under the hotel development agreement, if you declared the developer in default and went through that process, possibly there would be. But you have a very short time period to accomplish a lot if that's the step you're going to take.

Right. Okay. I mean, I think for me, the more information that we have, the better. Yeah.

I think I understand a little bit more what you're saying. So like right now, built into the performance that they're looking at, the cost, value of the land is 3.6 million that is what is built into it um what they've purchased from the dunes and it's not more than this 3.6 million it's less so i can't tell you what that is but you said it's exponentially more it's not it's less um but um going through the surplus land x process um and i agree with you that the property would go up quite a bit uh maybe 10 15 million dollars But then if you got a new hotelier, then that performer, that cost that land is $10, $15 million instead of $3.6 million. And so that project gets even more difficult to develop and to pencil out. And your subsidies, if it's required, may even actually increase at that point.

Okay. And then I... I'm just curious. I mean, as far as 25 million or really 50 million, like who came up with that number? And is it more of like a not to exceed? Like, how did that even how are we even talking about that number?

you know that's the problem when you try to be transparent because you put a put a little bit of information they just people don't understand it and so it i regret ever putting that in the in the report um that number had been tossed out there i asked debbie kearns if that's realistic she said yeah um that that could be um but i think at this point i'd say just ignore that as a mistake i never should put that in the staff report and then just rely on the number Debbie Kern, when she does the report, that will tell you exactly what we need to know. So I would say just ignore what I put in there. That was a mistake. I never should put that in there.

Okay. I appreciate that. Thank you. Okay. Thank you so much.

Okay. Let's go to Council Member Villala.

Thank you, Mr. Mayor. I really hope that we don't perpetuate the idea that we are giving up money for this project. Marina is not giving up money. We've got to stop saying that because we don't have any money, not one penny of TOT. We have to get this project built, and then we get $1.5 million a year with no risk to Marina. I can't... you know, and conflating the UUT with this project, they are completely separate. We cannot tie them together. And if people in the community are tying them together, it's because we have not been clear about what these projects are and how they are not tied at all to each other. In fact, I would say that this project will help us get some money that we need desperately to build our infrastructure. So that's all that I can say at this point. Thank you, Mr. Mayor. Thank you, Cathy.

Mayor Pratamvisar.

Thank you. I totally agree with Councilman Viala. And just about the propriety of a design. Of course, I know you cannot copy a design. You cannot steal a design. But it's not just a design. They already did their market research. They came up with the villa idea. They came up with the idea to have a structure in between Highway 1 and the hotel and the the conference center. So those are just things that already now have been prepared for somebody makes it so much easier if you need to design something and you already have this idea, you can tweak it, but you see the big picture. So that was what I meant. And for the rest, I totally agree. Let's not risk losing this. Our city, we need income generating businesses. This is something that we heard it from the experts. We know why we don't want more of the same hotels, because they will not work. It will compete with the rest of all the other hotels. And we'll probably have empty rooms and way less TOT. And we'll sit there with structures that are not being completely used while we can have this totally different plan in our city. So, yeah, I hope that we can give direction to proceed.

Thank you. All right. Thank you. I had one conversation with Harvey Dodwell about this hotel. It was during the ribbon-cutting ceremony of La La Grill about a month ago, a month and a half ago. And I asked him how much tax sharing he thinks it would take, and he didn't know.

I think he just threw out $15 million, but he didn't know. Or maybe I was asking him how much, maybe he threw out $25 million. But we talked about... the tax revenue sharing and how much, how many years it would take for the city to tax share for that, to get to the point where then the city would have a hundred percent of the TOT And basically he said, we really don't know any of that. If I could, if I knew I would tell you, but we don't know. And it seems to me that there's a lot of influx now because I don't know where I got the 125 million, probably from Harvey in that conversation that I asked because of that, I asked Harvey and I asked staff before this meeting, some questions, including, you know, What's the rationale if $125 million hotel, which is the number I heard, but it was just ballpark, why would we give them $25 million, which is 20% of $125 million? when we gave Mercedes 6% and we gave Spring Hill Suites an offer of 3%, so these percentages don't match. And so I was asking just from that point of view. And they gave me some reasons why they thought that 20% is reasonable, even though it's more percent tax sharing than Mercedes got or Spring Hill Suites was offered and never received, but they were offered it. Today, I heard $175 million. That's $50 million more than $125 million. So that brings the $25 million percentage of the total cost of the hotel down to, what, $25 goes into $175 seven times. So one-seventh of $100. Seven goes into $100 13 times. So now we're down 13%. So we're giving Mercedes a 16%. uh revenue sharing and we're talking today potentially if it's 175 million and if they get 25 million we're talking about uh 13 so now we're getting in the ballpark uh of mercedes which is an auto dealer which is not going to make marina a destination It's not going to drive our restaurants, et cetera, the way that this would. It's not going to make people stay in Marina an extra day or Monterey County extra day necessarily. So it's a whole different animal, and it's in the ballpark of what we've done with Mercedes. So I think we need to wait until we get the final report, keep some of these concepts in mind. And my question about the motion that I think is going to be made or already has made is to Lane and Karen. If we say thanks but no thanks on the new hotel, we're going to go out to bid. We're going to invite anyone who wants to build this hotel of whatever type they want to build. Tell us what you want. Then we give this to hotel developer back $3.6 million. then can we keep it and put it out to bid or does it go through the surplus land act if we give him back the if we give back the money if we yeah if we pay him to take back the land

if we pay him the money for the land and we own it and it doesn't go into surplus land until we, if we want to sell it to someone else, that's when it goes.

That's a really important point. So if we say, thanks, but no thanks, Mr. Dodwell, sell us back the land for 3.6 million, as we have the option to do because you did not meet your scheduled performance. And then we go back out to bid and, to see what anyone wants to, including Mr. Dodwell, for us to sell it back to him or someone else. First, let's go through surplus lands. We've lost the whole deal. If Chispa or someone else can find the sale price of 5, 10, 15 million and layered financing in order to, they do that all the time. Now we get an affordable housing project instead of a hundred million dollar project 50-year revenue source. I don't think that's very wise. So if our option is stay with the existing agreement, build a hotel that's not going to make nearly as much money, but we have to confirm that in the report, or put it back out to bid and lose the whole thing to affordable housing, which serves a great purpose, affordable housing does, but this is an economic development opportunity And I hear more that we want better streets, better parks, better facilities than I hear that we want more affordable housing for everybody in California to compete for with Marina residents. That's not what I'm hearing. It's streets, it's parks, and other things is what I'm hearing. So for us to be responsible to our community, we need to deliver better quality of life, better services, and having... 50-year hotel that's bringing in uh three million dollars a year that's huge and i don't want to jeopardize that tonight we do not lose anything by waiting for the preliminary report to be made final on the economic analysis and so i would like to go ahead with that so i'll be voting for the motion that gets this financial analysis final so we do not believe do we not we do not allow the opportunity for this to become an affordable housing project if we want affordable housing we want we have 188 acres at cypress knolls adjacent to this property that is set up for housing and the community said they want that to be affordable and they want it to be environmental friendly That's like 700 units. We got affordable housing potential. This is our single most valuable. It's three Walmarts. It's three big box shopping centers every year. It's three times what Walmart would bring in. It's three times what those big boxes bring in. So if you're going to turn down three Walmarts, annually to have affordable housing on the hill next to 188 acres of housing in cypress knolls that that doesn't make sense to me and so i i will support the motion that gets this to the next step so we can talk about the most controversial aspect of it when we know more and that is whether it makes sense to the community to tax share some number of years, some number of millions. Okay. I see. Let's go back to that. We're going to the fourth round and we're going to go to council member McCarthy.

Thank you, mayor. I'll keep it brief. I just want to reiterate that I agree with most of what you said. I do not want to lose out on this opportunity. It's a beautiful vision. I'm in favor of trying to see all of the ways that this vision pencils out. And I think we should clarify that I don't know that Well, we didn't ask the developer to present their vision, I don't think. Right. Or we didn't ask them to come up with this particular product. Right. I mean, that was the developer's idea. He chose to come to the city and share it. And it is it's spectacular. And I haven't seen any other vision. So I don't know. I have nothing to compare it to. Right. Unfortunately, I mean, we could probably spend another eight hours talking about the Surplus Lands Act. I think it's a very complex piece of legislation. I think we should be clear, though, that my understanding and city attorney, please step in if it sounds wrong. It requires us to negotiate in good faith if somebody presents an offer. I think if you did your homework and looked at Surplus Lands Act disposals in the region, you would understand that it's not something that generally happens on very expensive coastal properties like this. And again, if it did, I think we negotiate in good faith. It still doesn't mean that we are required to sell it. It means that we negotiate in good faith. So I just don't want that to be used too much as a crutch. I think that there are some complexities there. And I see the city attorney.

So I'm going to invite Karen up a little here to maybe give us got some experience with in other situations in the surplus land act.

Yeah, just to clarify. So to go through the Surplus Land Act, you have to make the property available, put out a notice of availability to affordable housing developers. You can put conditions into that notice of availability, which could include things like, you know, the developer has to pay the appraised value of the property. If you get somebody who expresses interest, you are required to negotiate in good faith. The Department of Housing and Community Development is going to police whether it was really good faith. So you really do have to try to make a deal. If somebody can meet your purchase price, that's essentially what they're looking for at HCD. If you can't reach agreement, you can then sell the property outside of the Surplus Land Act. But if you put a criteria that for affordable housing, you have to pay fair market value, then the Department of Housing and Community Development is going to want you to put that same criteria on any other development. So that's going to constrain you in terms of a future project. In the term of tax sharing? No. If you put in your surplus land act notice of availability that I want to sell this property, I have an appraised value of $15 million. I'm just using random numbers. And you don't get an affordable housing developer notice. They can pay that. You negotiate, you go through the process. You then, under the Surplus Land Act, can go do an RFP for a hotel developer. But what HCD is going to look for is, did you get $15 million from that hotel developer? So that puts an additional constraint on developing this property after you've gone through the Surplus Land Act. I also want to note, it's going to take close to a year to go through that process. because of the noticing criteria, getting HCD to sign off on your notices before you send them out. So you are going to be at least a year out before you could even look at a hotel.

In your experience, is it likely that an affordable housing developer would be able to meet market rates for this?

It depends on the size of the property. We have seen responses to notices of availability for market price. And, you know, it's also that puts a challenge on the affordable housing developer as well. So it really depends on size of property, what other factors are involved with the property, etc.

But knowing the facts that surround this particular property, I guess, was kind of the basis of my question. Do you believe that?

I think this is a hard property to develop for anybody, whether it's affordable housing, it's a hotel or anything, you know, for all the reasons you've discussed tonight. So I don't know that you would get a response, but I can't say that somebody wouldn't. And it's only to be a viable response. It has to be 25% of the units are affordable. So you could get a mixed income developer. down.

OK. So, yeah, I mean, I think my position remains unchanged. I guess what I would ask the dais is that if someone wants to make a first motion, I would love to have my motion on the table so it at least could be voted on kind of for the record. I think that the public's going to have a really hard time with this. And I understand what my colleagues have said and the merits of trying to get this project done. What I will say is that even if we go through with the incentive tomorrow, I mean, My opinion and what we've seen is there's still a huge execution risk. And some of us may still be on the council in three years when it does or doesn't get built. And some of us may not. You know, we'll have to visit that when the time comes. But we know there's an execution risk with hotels. I don't think that waiting a year changes that risk picture at all, quite frankly. I think it only lessens the risk from our side by providing the ability to evaluate hotels more proposals if they come in. So yeah, I'll leave it at that. Let someone make a first motion that I'd like to make a substitute just so it can be voted on. Thank you, Mayor.

All right. Yeah, thank you. So Karen just told us that if this gets sold on the surplus land act, it can be mixed income with 25% housing. What I see on this ocean view property and what Shay had set up for residential were approximately six lots.

of mega mansions because without the hotel blocking it, it would be pretty great. If the hotel blocks it, you're not going to get the sale on the house. Take the hotel away in your mind, sell this for mixed income and see how many very expensive market rate homes a developer would build with 25% of those units being affordable and they would be smaller, of course, I don't think it's a hard stretch. It's an easy stretch to see housing developers want that property. And to risk that happening by having to negotiate in good faith and then say, darn, looks like we're not going to get to go back out to bid for a hotel because we've got a serious housing builder here. that is risking the whole thing. So when you said earlier, Council Member McCarthy, that you see less risk to go to the Surplus Land Act than to take a bird in hand and make the city 150 million dollars in the next 50 years i i don't see that math you know that you could have less risk by going the surplus land option sounds like the most uncertain risky option to go And if you're going to spend a year, cool your jets, Mr. Hotel developer and all hotel developers. Let cost of instruction go up higher in this year. And we might come back to you if we can get through the Surplus Land Act without having to sell this to a housing developer. There's a lot of risk and a lot of uncertainty. And yes, there would be. It sounds like a year delay. So. I guess I don't need to say anymore. Okay.

So we don't have a motion on the floor. Is that right? Because you didn't make a motion yet. Okay. Would someone like to make a motion?

Yes. I would like to make the motion. We received the presentation from the Monterey Bay Hotels LP and we provide the following direction to staff. regarding the amending the existing hotel development agreements to proceed with that and bring it back to the council. And we provide direction to staff to proceed with economic development subsidy reports and a proposed transient occupancy tax, TOT, revenue sharing agreements, and bring that back to the city council.

I second.

Okay, so make a friendly amendment. Great. So I'd like to add to Mayor Pro Tem's motion for staff to bring back an updated schedule of performance showing what has been met and the date, which are exhibits B1 and B2 in the packet. Staff bring back an updated preliminary financing plan, which is exhibit C in the packet. Staff return with community benefit plan options. Staff return with the estimated amount of TOT the city is losing because of the project being delayed and out of compliance. And then lastly, just a table or a menu showing different alternatives of revenue sharing, starting at 5 million and then going up all the way to 50 million or whatever. So it would show how long that would take to be met, that partnership to be met. Does that make sense? And then that way we'll be able to see all of the options and have that information in front of us. Does that?

Thank you. I would like to accept that. But I want to make a remark about TOT losing. You know, this is so it's not black, white, because rooms that you can rent could rent in the hotels that should have been built. You might lose those rooms in other hotels in our own city.

Sure. I mean, but just an estimate. I mean, I think it's good. Is it a million? Is it 25 million? I mean, I think it would be good to sort of that for me is negotiating leverage because that TOT is not online. Okay.

A city manager that you can provide all that.

Yes, I can. The difficult part is... is the performance schedule because a lot of it it couldn't have happened because of the utility infrastructure and the pg e um things and and there's just an estimate so that it got got delayed for years and so we'll just have to make some assumptions with that but we'll do this great thank you and i have a friendly amendment that the final report

compare the projected revenue of the existing agreement to the agreement that's being proposed for change. And that comparison would include the number of rooms in each and the revenue projected to be generated in each. And I assume, but I want to make sure before, let me just make that friendly amendment.

Yeah, like in my statement, Mark, you know, it won't be a fixed number because nobody knows.

So my friendly assessment would be that the report that's final addresses that issue and makes projections.

Okay, so we know what we're losing.

As long as we know that it's just projections. Yeah, the report should clarify that.

Yes. So it'll say if we had the AC element and that was built from this point on estimated revenue that would generate, compare that with the new proposed luxury hotel.

Yes, because there were claims by the developer and Rob O'Keefe tonight, That the existing agreement would not generate nearly as many dollars, even though it's more rooms than the proposed. So if they can say that the environmental economic report can discuss it, that's what I'm saying. And I hope, and I want to, let me just make sure, is that economic report going to tell us how much this hotel is going to cost? Is there going to be a performance in it? Absolutely. Okay, so we'll know if it's $125 million or $175 million or some other amount. We'll, yes. Okay. Yes.

Council Member Biala?

Yeah, I don't know if this falls under an amendment, but the only thing that I don't agree with in the council member McAdams motion was that I don't like the idea of us trying to assess how much the delay cost the city when I think that the delays have been out of his hands. And I think that It's only serving to bias the project. So I'm not in favor of that addition.

Did you second? So your second didn't hold then?

Right. Well, I don't think, did you agree to the first? So let's start over again. Yes. I'm sorry.

I didn't understand. So let's start over again. I think you understand Jenny's friendly amendment, but if you don't, we'll have Jenny repeat it.

No, I understand it all. So the question is, would you agree to remove that number about the loss caused by the delay?

well i mean for the sake of moving forward i will however i want to put on record if it's you know 5 million or 25 million that is a negotiating tool for the city and that is leverage for us that's the whole reason why these dates a schedule of performance that's why you have the dates and if the performance is not met Well, sometimes there's a consequence to that, right? And so we have a failed schedule of performance in front of us. We're not sure what's been met, but I can assure you that a hotel was not built as of 12-31-2025. And so if you want to not have that information, OK, but for me, I don't know what the harm of of having that information. I mean, for me, knowledge is power. But for the sake of moving forward and I don't want to talk about it all night. Fine. You know, take it off. But. I mean, I do think that there's value in that number. It will give us leverage. We will actually have data in front of us to say, OK, well, you know, you want this amount of million. Well, you know, this is we lost about this amount of money. And it's not going to be built for another two or three years. So add to that. I mean, there's value there. But that's fine if you don't want to know what it is. But I think it's important to know what it is.

But I also think it's important to know why those delays occurred too. And if you're going to put a dollar amount to it, then we ought to say... The reasons from this day to this day, PG&E did this. We responded in this way. They still didn't do this until this time. I mean, otherwise, if you're just looking at it as a delayed date and amount of days, then that is very biased. There's nothing that Mr. Dodwell could have done about that.

Well, then when we get the updated schedule of performance showing what has been met and the date. So that's in my friendly amendment. We will have a better understanding of that. But right now it's all speculative and nobody knows.

So I'm willing to remove that in order for us to go forward. Is that what you said?

Yes, and I think she also said, I think you said, Kathy, that if we put that information in that she's asking for, we would also put in the kind of discussion that's in the staff report about why there was a delay.

Right.

So I thought you were okay adding the numbers of lost revenue if we talk about the reason why it wasn't.

That's what I said afterwards. But if she's willing to just take it out, then there's no need for us to have anything more. And we can just move forward. Yeah.

Okay. I will say that we did this before at the Spring Hill Suites. When the hotel wasn't going to open according to the scheduled performance, there was an extension requested. And the city did what Jenny is asking. The city said, well, if we give you three months delay, how much are we losing in TOT? And the Debbie Kern analysis was $100,000. So he had to give us a promissory note that he would pay us $100,000. Then after three months passed, he didn't make it. He wanted another extension. We said, well, that's going to be another $100,000 lost. We used that kind of thinking. And he paid another $100,000 promissory note. So he ended up paying $200,000 basically for us to loan him $634,000 of impact fees for less than a year. We really made bank on that. But we used that kind of logic that Jenny's asking for.

Right. But that's a forward-looking promissory. I'm talking about we already know why and it was out of his hands. So that's all I'm saying is that you can use that number. But if you already know that that 80 percent of that delay had to do with things out of his control, then that's a different story.

It's not different story because it was out of his control then. That he couldn't get the elevator inspected. That his contractor, his general contractor, died on the job. That there were storms that PG&E could not get to his needs because they were trying to take care of Big Sur. It was the same thing. It was not his fault. But we nailed him for it. And using that simple math, just like we already have here, if there's a year delay, it's $3 million lost. It's already in the staff report. So it's not hard to estimate revenue lost due to past delays or future delays. And that information can be helpful in putting teeth into the schedule performance, which we never had at the Dunes. the University Village Agreements, 2008. And then it was like 2014. We had this, no, 2005 and 2008 had no teeth. What Jenny's asking for is teeth. We've learned our lesson. And then on this hotel, there was no teeth in the scheduled performance. We're learning that tonight. And no, I'm not really, I'm not, I'm okay that they're not. We didn't need teeth. He did everything he could. We've been following with Harvey and Lane for years on this hotel, knowing why he was going through these delays and there was nothing he could do.

So we'll just include the reasons then, as well as the numbers and why.

And just to remark, not so much for the motion. We might be grateful to PG&E in the end, because this might be a so much more successful project than those three hotels that might have been built by now. So I never thought I would be grateful to PG&E.

But that will be in this final report. yes yes so okay so the friendly amendment is to add into the final report lost revenue for the past delays and why the delays happened is that accepted by the motion maker yes is that and the other we're gonna get there and all everything then is that does the second hold yes okay what was your other one because i forgot jenny yes

So was the updated schedule of performance showing what has been met and the date and the reason, the updated preliminary financing plan.

And that was Exhibit C? Okay. So does the motion maker accept a friendly amendment of those updated?

Yes, all of those. And the community benefit plan, all of it. Okay. Anita, are you following? Yes.

You are? I'm not sure. Okay. Can I make a comment about the community benefit? What is that? What are we talking about?

Let's answer that in just a second. Let's divide this up. So let's talk about the updated performance schedule and Exhibit C update. Yes. Does the second hold on that?

Yes. Okay.

So can you, Jenny, answer Kathy's question about the community?

Well, I spoke about it earlier. It's very common in tax revenue sharing agreements that, and even if there's not tax sharing, actually, that a community benefit plan is provided. So it could be committing to paying high wages. It could be offering childcare. It could be offering teachers a discount. It's just, it's a, It's something that we can say, OK, yes, we are partnering with this developer and we're providing the shared amount. And here's a community benefit plan. It's very common in dispensaries. It just it makes it a little more palatable to the public.

Thank you.

Thank you. And that would just be the options, which is the option for us to look at. Staff would work with Harvey, you know, and come up with something. And I think a lot of them he already is doing, hiring local, stuff like that. Thank you for all those additions. Sure.

Yes. That's good.

Council Member McCarthy.

Thank you, Mayor. I think, you know, just for me, I'm likely to vote no on the motion anyway, but we could remove the language about the lost revenue or not, but we don't need to have it in there maybe because the facts don't change, right? We've lost millions upon, right? Like... We've lost a lot of money in TOT. I mean, it's in the staff report. Year one is what, 1.3? We're how many years behind by the time this thing gets built? To be determined, right? So the facts don't change whether it's in there or not. For me, I do think a lot about the UUT. I've struggled with it for a variety of reasons. Up to this point, I've supported placing it on the ballot and allowing voters to decide but I'm also a voter. And I think this action tonight, very candidly, if I were to go to the ballot box today, I would vote no on the UUT because we have not rebuilt trust amongst those people that voted against the previous bond. And tonight is one of our opportunities to do that. My concern is that our lack of process to the public may gain us that TOT in the near term, but cost us something much larger. Sorry, gain us the TOT in the near term, but cost us that UUT in the longer term as well. I do think we have an opportunity to make this right with the public, despite formal challenges around the Surplus Lands Act. I don't think it's an issue. I heard the mayor's concerns. I appreciate them. I respect them. It is a risk. I totally agree with that. I think it's a tiny risk. And I think it's a risk, quite frankly, that our community would ask us to take. you know that if somebody really wants to pay that much money to build housing in our community um that would likely be quite a fantastic product because it it it is a prime piece of land um i i think that's a risk that the public wants us to take i hear that i don't have the support there i would still like to make a motion in fact i'll i'll go ahead and make that now even though i know it probably won't get support i'd love to have it on the record um and that motion is that i move that the city council direct staff to evaluate initiate all appropriate actions necessary to terminate or otherwise conclude the existing hotel hotel development agreement CONSISTENT WITH ITS TERMS AND APPLICABLE LAW TO RETURN TO THE COUNCIL WITH OPTIONS FOR REOPENING THE HOTEL SITE OPPORTUNITY THROUGH A TRANSPARENT COMPETITIVE SOLICITATION PROCESS OPEN TO ALL QUALIFIED DEVELOPERS AND TO COMMISSION AN INDEPENDENT ECONOMIC FEASIBILITY AND FISCAL IMPACT ANALYSIS EVALUATING THE PUBLIC BENEFITS, THE COST, THE LONG-TERM REVENUE IMPLICATIONS OF THE PROPOSED HOTEL DEVELOPMENT OPTIONS, INCLUDING ANY PROPOSED TOT SHARING AGREEMENT. And that's my motion, and I'll just add to that as a commentary. Wait, wait, Brian, let's get a second, and then we'll go back to you, okay? Is there a second on the motion?

I'll second it for sake of discussion.

Thank you. So, yeah, just my, to add to that, the intent is certainly not to exclude any current development developer. In fact, I think that it's very likely that we would go down the path of selecting somebody who has presented a really beautiful, fantastic product, THAT WE'VE SEEN HERE TONIGHT. BUT AGAIN, I'M INTERESTED IN REBUILDING THAT TRUST WITH THE PUBLIC THAT WE SEEM TO HAVE IN SOME WAYS LOST WITH THE LAST BOND MEASURE. AND I JUST REALLY FEAR THAT WE'RE DOING MORE DAMAGE THAN GOOD THROUGH THIS MOTION. BUT THAT'S ME. I REALLY APPRECIATE THE DISCUSSION THAT'S HAPPENED ON THE DIOS TONIGHT. THANK YOU, MAYOR.

NEW SPEAKER THANK YOU. JENNY, DID YOU HAVE MORE INPUT?

I did. I just, I again want to be clear that we're not approving a revenue sharing agreement. You know, we are, for me, this is just a step to get data and information. So, you know, how... I am not going to be able to support your motion. I apologize for that. But I want to be clear that just because I am supporting the other motion on the table, it doesn't mean that I'm supporting a revenue sharing agreement. It just means that I'm supporting the step of getting more information. You know, I do really appreciate the beautiful product that is in front of us. And, you know, I have the utmost respect for you. I know you know that. So I appreciate you. advocating for transparency and fairness. Thank you.

Thank you very much. Council Member Biala.

I just want to say that I think that our public does have a lot of trust in the decisions that our council has made and are making. And that was born in the results of the last survey by, is that three of them? the results of that survey were stunning. And so I don't want to leave the idea that the public doesn't trust us. So I just want to clarify that. Thank you.

Thank you, Kathy. Mayor Patel-Vishnu. No, thank you, Senator.

All right. The subsidy motion on the floor leaves open the possibility that a housing developer will buy that property for market value and make bank on a residential expensive housing development that has 25% of the units affordable in some kind of a multifamily dwelling. I do not want to risk 50 years and $150 million of TOT to a high-end housing project on that hill that has 25% of some small affordable units. I think that would be irresponsible. And I think at this point, to tie the UUT to this means that the perspective the person has does not see this as affording us the ongoing costs of a growing city and the UUT affording us a fire station, a police station and a city hall. Those are so different. And it is our responsibility to communicate that to the public that you don't build $70 million of buildings with $3 million of uncertain hotel tax. You do build those buildings with a more certain revenue from a utility tax. And that's what every other city does. But most cities don't do that for buildings. They do it for their ongoing revenue. Our Citizens Advisory Committee told us to use the UUT for the buildings. So trying to have unity and to progress instead of fighting with what a group of citizens studied and recommended, we really don't care if it's a UUT or a bond, if it means tanking the project of building those necessary buildings i would prefer to have a bond that only property owners paid for because that's equity that's that's that's fair to the renters who are overall less affluent but that my personal preference didn't pass and now the citizens advisory kitty b said try a different route so we're trying to use we're going to try uut that's different than other cities so use it for ongoing revenue which means we have to pivot to afford our ongoing expenses with something else, in this case, a transient occupancy tax. So we need both, and they're for different purposes. And whoever combines them, it's a good discussion point, but I've had a lot of conversations with our city manager over the years, and our ongoing revenue, our ongoing costs need ongoing revenue to meet it. And so Mercedes and Spring Hill Suites and Brass Tap and the theater and everything we're doing at the Dunes is going to help us meet those ever-increasing costs with ever-increasing revenues. But this hotel project is for that. It's not for building a fire station or a police station or a city hall. The last thing is that I heard it said that we've lost TOT. Well, if we lost a certain number of millions over the last few years by not building this hotel and we gain it back over time because year after year, we're going to make a lot more with a luxury product than with the original product. We're going to gain TOT because of this delay. And that's why Mayor Pertem said we might be thanking PG&E because we're going to end up making more revenue for our community streets, parks, etc., by waiting this three years and having a better product for the next many decades. Okay. So we have a substitute motion on the floor. Brian, do you want to repeat it? Anita, do you know what it is? Okay. Does anyone need it repeated? Brian, do you want to repeat it? Okay.

I don't, but I would like to make just a super brief correction just for the record, just because I think facts are important and I appreciate that we can all look at them a little bit differently. But the reality is, is in the last four years, I think that what the survey said is that Satisfaction with the council is at its lowest point. It's at about 50%. It was at about 51 in July of 2020 to 58% in June of 24. So I think the facts are that according to the survey that FN3 conducted that less people trust the direction of the city than ever have with this existing city council. So I just wanted to correct that. Thank you, Mayor.

Thank you. And the same trend is true nationally and statewide. It's not unique to Marina. And what the FM3 consultant said was those numbers compare favorably. They're better than most communities he works in. So trust in federal, state, local has been going down as ours has. And ours is higher than most communities he works with. So I think we're all accessible, hardworking folks. And I think the public sees that, but we're never going to We're not, this is not a popularity contest. And so we're never going to win that. All right. So on the step seat motion, all in favor, please say aye. Yes. All opposed, please say no.

No.

That motion fails. Thank you. On the first motion, Anita, do you have it? Do you want us to read it through? Okay. So either Lane or Lisbeth, who wants to take a shot at it? Okay, Lane.

It's approving the motion as written in the staff report. Yes. And then update the schedule of performance. um what was um which things have been met and then at that point evaluate how much it has cost the city um not meeting the benchmarks develop some community reasons why and to add the reasons why Correct. That'll be part that we'll look at, which if there's things that were not caused by him, then that's when the cost will not start. It'll start after that period, and that's when we'll have to work with MCW. really community partners understand that but so i think we have a good sense of that develop some community benefit options we'll work with uh mr dadbo while on our stuff on developing some of that um uh

Do you want me to repeat it? Because they were my, okay. All right, great. Okay, so update schedule a performance showing what has been met and the date. So that's exhibit B1 and B2 in the packet. Updated a preliminary financing plan, which is exhibit C. Provide community benefit options. the estimated amount of the TOT that the city is potentially losing with the project being delayed, and then to provide any reasoning for those delays. And then a menu or a table showing all of the alternatives of revenue sharing from $5 million and up, and to include how long it will take to get to that dollar amount.

Well said. Okay, so staff recommendation plus the items that Jenny has listed, is that acceptable to the motion maker? Yes.

And does the second hold?

Yes.

Okay. Any final comments?

And just, yes, sorry. Before we vote, I want to, again, be clear, we are not approving a revenue sharing plan. We are just moving forward with getting information, getting the numbers, the data, and the report finished.

Okay, thank you.

Thank you.

And my only comment is that less than a month ago, we received an economic report from the Gateway Hub. Rest regenerative district class at CSUMB. And this is exactly in line with their punchline was make Marina a destination.

We have the opportunity to do it, but we haven't grabbed that opportunity.

This is definitely, they would cheer if they heard this and they worked really hard on that report and we all loved it. Oftentimes documents sit on a shelf, get dust, who cares?

But this is implementing that report in a big first step. Council Member McCarthy. Thank you, Mayor. I just want to echo what you said. I, again, can't agree more with that sentiment. I, you know, again, time will tell, but this, even this project may never get built. And, you know, again, you know, we can have that discussion when we have it, but I want to have it on the record. You know, I think that the way the council is likely to go tonight actually gives the least likelihood that it will get done. That's my opinion.

Point to order, please. I have the floor unless there's a point of order. What's your point of order? Point of order. After we make a vote, there is no discussion of the motion after the vote. We have not voted.

So your point of order is well taken. That is true. Please continue.

We have a motion on the floor. We have a vote.

The point of order, yeah, I guess a subsequent point of order would be it's not well taken because what she said is not true, but I don't want to argue that. I'm done. Thank you, Mr. Mayor. I appreciate it.

Her point of order was that after a vote's taken, there's no discussion.

That is true. Would you bring a point of order up for something that's happening incorrectly?

I apologize. I thought we had voted. So that was my mistake. But not for a second. Thank you.

Do you have more input, Brian?

No. Thank you, Mayor. I appreciate it. Kathy, do you have any more input? Okay. So let's go to a vote. All in favor, please say aye. Aye. All opposed, please say no. All right. Thank you, everyone. Motion passes 4-1 with Council Member McCarthy dissenting. Harvey, you've done years of stressful work on this.

Our staff has been involved the whole time.

Thank you for the staff report. Thank you for all the information. It's not over.

We've got some major steps ahead of us, but at least we're progressing. Thanks, everybody. All right. So we are adjourned.