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Morgan Hill
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November 29, 2022

Voters reject two hotels

Property owner’s options remain limited

If early vote totals from the March 3 election hold up, it appears that voters don’t want developers to build more hotels in Morgan Hill.

As of 10am March 4, “No” votes were in a commanding lead in the race for Morgan Hill Measure A. With 100 percent of polling precincts reporting results, 4,878 voters—or 64.29 percent—cast their ballots against the zoning amendment question. Voting “Yes” were 2,709 local voters, according to the Santa Clara County Registrar of Voters website.

Measure A would have allowed the city rezone a 4.4-acre parcel in Madrone Village, on Madrone Parkway, to make way for the owner to develop two new hotels on the site. The measure was placed on the ballot by the City of Morgan Hill, after existing hotel owners spent several months in 2019 litigating the council’s original zoning decision and gathering signatures from registered voters.

Existing hotel owners organized against Measure A, arguing that adding two new hotels to the market will do nothing to immediately increase city revenues. Opponents have frequently expressed their desire to see a grocery store developed at the Madrone Parkway site instead.

“Yesterday, the voters overwhelmingly voted No on Measure A because they did not share the City’s vision for the future of Morgan Hill,” said Asit Panwala, a spokesman for the Morgan Hill Hotel Coalition, which formed a campaign committee to oppose Measure A. “The city’s leaders told residents how to vote rather than actually listen to them. The No on A campaign prevailed because our message resonated. Overwhelmingly, residents do not want land rezoned to build more hotels.”

Panwala’s family owns the Comfort Inn in Morgan Hill.  

Supporters of Measure A—including city council members and city staff—have said the two new hotels could have brought in up to $1 million annually in public revenues in the form of hotel taxes. These revenues go to the city’s general fund, which finances public safety, street maintenance, parks and other basic services.

The text of the measure states that two new hotels on the Madrone Parkway property would be consistent with the city’s Economic Blueprint and General Plan.

“I think there is virtually no negative impact (from Measure A) to a Morgan Hill resident or voter, yet I think there was considerable revenue upside to improve city services, which ultimately the Morgan Hill taxpayers are going to have to face,” said Brad Krouskup of Toeniskoetter Development, the owner of the Madrone property. “We thought it was a win for the Morgan Hill taxpayer.”

The property is currently zoned for retail use, and Krouskup said his firm tried unsuccessfully for about 10 years to market the site to a grocery store developer. “There hasn’t been any interest in grocery stores for Cochrane Road,” Krouskup said.

He added with the failure of Measure A they will revisit their efforts to sell the site to a retailer, even if it takes several more years.

The road to placing Measure A on the March 3 ballot began about 10 months earlier, when the city council unanimously approved a zoning amendment to allow two new hotels on the Madrone property in question. The Hotel Coalition challenged the amendment with a referendum petition, which was certified by the city clerk. Faced with the option of repealing the zoning amendment with a council vote or putting the question to the voters, the council chose the ballot box.

A campaign committee supporting Measure A was heavily funded—to the tune of more than $300,000—by the proposed developer of the two hotels and the property owner.

The No on Measure A campaign committee was funded largely by existing Morgan Hill hotel owners, with about $73,000 collected in 2019.

Voters interviewed outside the Morgan Hill Presbyterian Church voting center March 3 said they are increasingly worried about development in Morgan Hill, and that’s why they voted against Measure A.

“Too much traffic, too much taxes,” voter Sharon Ulstad said. She worried that Measure A would add to the volume of vehicle traffic on local roads, “creating more gridlock,” she said.

A better use for the Madrone Parkway site, Ulstad suggested, would be a park.

Voter Mary Blessing thinks the proposed Madrone Village hotels would be “a misuse of our land” because there are already plenty of hotels in Morgan Hill, with two currently under construction. Blessing suggested that, above other property uses, the city should promote more development of apartments for rent—a category of housing that she feels is badly lacking.

Election volunteers Maria Gaynor, of Gilroy, and Shirley Suchomel, of Morgan Hill, greet voters March 3 outside the Westmont voting center.
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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