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Morgan Hill
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February 24, 2020

Anti Measure A: New tax windfall won’t happen

By Asit Panwala

Measure A is a handout to a wealthy out-of-town developer, while taking away our opportunity to have a wholesome food market/store on the north side of Morgan Hill. 

Laws are meant to benefit all of us, but instead Measure A changes the zoning for an out-of-town developer. Measure A will allow him to build hotels, instead of a grocery store, at Madrone Village Shopping Center. The developer has spent more than $300,000 on the Yes on A campaign. Why? If Measure A passes, the windfall to the developer is over $1 million because he bought cheaper land and had us change the zoning for his financial benefit.

How will the developer persuade you to vote yes? He promises that two cookie-cutter hotels—a Fairfield Inn and a Home-2-Suites—will add $1 million in hotel taxes to fund city services like police, parks, and street repair. 

Meanwhile, the city will tell you that there is an anticipated $8 million dollar budget deficit and these hotels will help. However, they both fail to understand that building more hotel rooms doesn’t mean more people will stay in Morgan Hill. 

First, our mid-level hotel market had 530 rooms, and those hotels have a 70 percent occupancy rate. Hotel revenue fell by 3 percent last year. That’s right, total hotel tax revenues for the City of Morgan Hill dropped last year! 

Furthermore, hotel taxes amount to less than $3 million of a $135 million citywide budget. Adding hotels to fix our budget issue is like looking for a band-aid when one needs a surgeon. 

Two new hotels under construction—the Granada Hotel with 60 rooms and a 120-room hotel on Cochrane Road—will increase the number of hotel rooms in Morgan Hill by 40 percent. That’s 65,700 room nights that will be available soon in our town. The Cochrane hotel is less than a mile away from Madrone Village Shopping Center.

The proposed Measure A hotels at Madrone Village Shopping Center will add another 206 hotel rooms. If you build it, will they come? How does one expect that two cookie-cutter hotels will add $1 million in tax revenue when the tax revenue from all of the hotels in town only amount to $3 million? Their math only makes sense if you believe that 300 people everyday stay elsewhere, but would prefer to stay in hotels in Morgan Hill. 

Instead, you will see a decrease in room rates and occupancy as more hotels compete for the same guests. Hotel tax revenue for the city will drop and stagnate. Local family-owned businesses like the Comfort Inn, owned by my parents who have lived in Morgan Hill for 40 years, will be harmed. And you won’t get the additional services you were promised.

The Morgan Hill Responsible Growth Coalition has joined the Morgan Hill Hotel Coalition (every major hotel in town including the Marriot properties) in urging you to vote NO because they agree that Measure A won’t create high-paying jobs; zoning should be not changed to create instant wealth; and Measure A will not help our economy. 

Vote NO on Measure A. Build a wholesome food market, not more hotels.

Asit Panwala is a spokesperson for the Morgan Hill Hotel Coalition and treasurer of A Committee Against Ordinance No. 2295. His family owns the Comfort Inn in Morgan Hill. 

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