Local voters will get to decide if a developer can build two hotels in the Madrone Business Park in north Morgan Hill. The city council, which gave its approval for the hotels months ago, has scheduled a ballot measure on the issue for the March 3, 2020 election.
This decision comes after a months-long battle between the city, existing hotel owners and the project developer. After collecting 3,176 valid signatures, local hoteliers submitted a petition for the ballot measure.
The petition was subsequently certified by the Santa Clara County Registrar of voters, and on May 15 the city council unanimously voted to schedule the ballot measure for the primary election in 2020. The election will cost the city just over $94,000, according to city staff.
The council could have voted to repeal the ordinance it adopted earlier this year allowing the hotels (which now requires the voters’ approval), but council members have been steadfast proponents of the project.
The council initially approved a zoning amendment Feb. 6 that would allow the hotels to be built in the Madrone Business Park, but several existing hotel owners quickly mobilized to oppose the project and begin the signature gathering process. With a certified petition signed by at least 10 percent of the city’s registered voters, the petition proponents could force the council to repeal the Feb. 6 decision or schedule a ballot measure.
Madrone Village sits on Cochrane Road, and the second phase of development for the project is 4.4 acres at the intersection of Madrone Parkway and Woodview Avenue, which is where the new hotels would be located. The hotels, proposed by developer Toeniskoetter Development, are a Fairfield Inn and Suites and a Hilton Home 2 Suites.
The city has said that losing the two-hotel project would result in less transient occupancy tax revenue for the city, while the existing hotels have said more rooms would create a market saturation that would drive down prices.
hed: PAC against new hotels
After the council approved the hotels Feb. 6, existing hotel owners hired signature gatherers to get Morgan Hill voters to sign the petition. Three hotels paid into a political action committee that funded the signature gatherers. Using LLCs that operate in different parts of the state or other states, the hotels that contributed to the PAC were the Comfort Inn, owned by San Panwala; the La Quinta, owned by Andrew Firestone; and a Sheraton airport hotel operating in Cleveland, Ohio and owned by Bharathabhai Patel.
Asit Panwala, whose parents own the Comfort Inn, said Patel is an outside developer that “doesn’t have a hotel yet” in Morgan Hill. According to filing documents, $30,000 was spent by this PAC, named the “Committee Against Ordinance No. 2295,” to pay for signature gatherers and signage.
Several other hotels donated through a non-monetary contribution, allowing the signature gatherers to stay in their rooms. The hotels identified in the filing documents that offered rooms were the Morgan Hill Inn, the Comfort Inn, the Budget Inn (also owned by the Panwalas), Hampton Inn, the Microtel and the La Quinta.
The other committee that filed, opposing a ballot measure, was the Committee to Promote Morgan Hill, sponsored by Real Estate Businesses, which is affiliated with Toeniskoetter Development, the developer on the hotels project.
The committee did not report raising any money, but reported two expenses for advertisements in the Morgan Hill Times.
While the city’s cost to place the referendum on the general election ballot in November 2020 would be cheaper than a March 3 measure, the project developer, Brad Krouskup from Toeniskoetter Development, city staff and the council members said time was of the essence.
The city estimated in the staff report that putting the referendum on the March 3 ballot “would be approximately $94,200, and would depend on the number of other agency measures to be placed on the ballot.” City Manager Christina Turner said at the May 15 meeting that the city was not away of any other possible measures at this time.
A stand-alone election could have cost between $960,000 and $1.4 million, as estimated in the staff report.
hed: Mayor: Petition proponents ‘misrepresent’
Mayor Rich Constantine added that while he supported the residents’ right to vote on the matter, he didn’t feel the hotel owners had been transparent during the petition process.
“The signature gatherers weren’t as altruistic as we make it sound—there was some misrepresentation that I have heard about and we have seen the video,” said Constantine. “We have to follow the letter of the law, but unfortunately the petition gatherers do not.”
Constantine clarified to the Times, that there were several videos of residents being approached by signature gatherers who were giving out false information. The Times has not seen these videos.
He told this paper that the city is required to use specific language when putting items on the ballot, and he believed the same standard should be applied to signature gatherers. Constantine said the gatherers often used misleading or false information to get signatures, sometimes when approaching city officials.
Panwala disputed Constantine’s claim that the petitioners or hoteliers were untruthful. “If 3,156 people signed it, it’s because they wanted to sign,” he told the Times.
The council was presented May 15 with the ballot question that will likely appear on the March 3, 2020 ballot. It reads, “Shall the ordinance No. 2295, amending a Planned Development Master Plan for ‘Madrone Village Shopping Center’ located on the northwest corner of Madrone Parkway and Cochrane Road (APN’s 726‐33‐029,030, and 031), to add hotels as an approved use, which is consistent with the City’s General Plan and Economic Blueprint to encourage tourism, and that generates new City revenues for City services including public safety, street repairs and other infrastructure be adopted?”
A yes vote would allow the amended use and the hotels; a no vote would not allow the hotels.
