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Morgan Hill
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September 26, 2022

Granada Hotel project to add more guest rooms

Developer says investors wary of smaller hotels

The developer of the Granada Hotel said last week he will soon submit plans to add more rooms to the downtown Morgan Hill boutique hotel project that has been stalled since the start of the pandemic.

Frank Leal, owner of the Granada Hotel property and business at 17440 Monterey Road, said on July 7 his architect is planning to submit a narrative for a project update to city planning and building staff in the coming days.

In a June 1 letter to the Morgan Hill City Council, Leal said he needs to add 18 more rooms to the original 60-room hotel proposal in order to “make the project operationally functional.” He said he has acquired short-term construction financing from Capital Bridge Investments in order to resume with construction, but lenders remain wary in the recovering hospitality market.

“I have learned that most investors require 90 to 100 rooms to feel comfortable with my hotel investment—my hotel is 30 rooms too small,” Leal wrote in the June 1 letter.

Construction of the Granada Hotel began in early 2019, but stalled in 2020 due to the shortage of financing and increasing construction costs, Leal said, resulting from the Covid-19 pandemic’s toll on the hospitality market and supply chains. Since late 2020, the partially built hotel structure has been rebranded as MOHI Social, an outdoor restaurant and bar.

Original plans for the Granada Hotel included 60 rooms, conference space, a day spa and flower shop.

Leal did not provide details about how the increase in rooms might affect other plans from the original proposal.

Morgan Hill Assistant City Manager Edith Ramirez said city staff has been discussing the updated hotel plans with Leal’s architect, and is expecting the project to add another floor—bringing the total number of floors to four.

Leal’s letter to the city council added, “As the wedding industry continues to grow and be a bigger part of the tourism and hotel lodging ecosystem, the experiences being sought after are only getting more extravagant and demand a higher quality of rooms, venues and services. With your support and the partnership of Capital Bridge Investments, I believe we have an opportunity to complete the boutique hotel Morgan Hill deserves.”

In the fall, Leal is planning to open MOHI Farm—a farm-to-table restaurant that features ingredients from local growers—on East Third Street in downtown Morgan Hill.

Michael Moore
Michael Moore is an award-winning journalist who has worked as a reporter and editor for the Morgan Hill Times, Hollister Free Lance and Gilroy Dispatch since 2008. During that time, he has covered crime, breaking news, local government, education, entertainment and more.

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