Nearly a decade after it was first introduced, the Garden Street Terraces project slated for the heart of downtown San Luis Obispo will come before the City Council for final approval tonight. Developer Hamish Marshall of Garden Street SLO Partners LLC made several changes to the mixed-use project after the council initially approved it in November 2011.
Those changes include the elimination of subterranean parking, more hotel rooms, less residential space, 5,000 square feet less of commercial space and less parking.
In addition, the building on the corner of Broad and Marsh streets, which is currently occupied by Couch Potato furniture store, will remain as it is today. That portion of the proposed project faced public opposition because of its height and dark grey color scheme.
Marshall was unable to purchase that property from Marsh Street Associates LLC, operated by John Rosetti and Vic Montgomery.
The new project is 93,425 square-feet — nearly one-third smaller than the 135,448- square-foot project approved in 2011.
The council will consider those changes and a revised agreement between Marshall and the city for compensation for a city parking lot that will be eliminated and developed as part of the project.
If approved, Marshall hopes to have the hotel, of which Pacific Hotels Corporation is a partner, ready for occupancy by the summer of 2016.
The project’s slow progress in the past few years was tied to funding, Marshall said.
“Funding is probably the largest hurdle we have faced,” he said. “Finding funding and a path forward just took time during one of the worst economic downturns we’ve ever had.”
Garden Street Terraces, planned for a 1.1-acre site bordered by Broad Street, Garden Alley and Garden and Marsh streets, now includes a 64-room hotel (formerly 48 rooms), eight residential units totaling 8,640 square feet, and 41 parking spaces (formerly 74).
The city’s Architectural Review Commission reviewed the revised project in November, recommending that it be approved.
“Essentially, based on economics, this is a better project for the city,” said Carol Florence, project planner with Oasis Associates.
The design changes will generate additional tax revenue for the city because of the additional hotel rooms. The city stands to collect $616,480 annually in additional general fund revenue from the project.
The City Council will also be asked tonight to approve a new memorandum of agreements between the city and the developer regarding the 99-year lease of the city parking lot at 736 Marsh St., which will be developed as part of the project.
In the past, the city agreed to give the developer a one-time loan of up to $2.4 million from the city's parking fund, and the developer agreed to pay base rent annually to the city for the parking site. The developer also agreed to make a one-time payment of $1.86 million for the loss of public parking spaces.
That is no longer the case.
The city will now only loan the developer $500,000, and Marshall will no longer pay the $1.86 million.
Instead, Marshall will pay base rent, or fair market value, for the parking lot annually — an amount no less than the current net parking revenue of $204,379.
“This is a better agreement for the city, all in all,” said Lee Johnson, the city’s economic development manager. “It is a property in the middle of town that is way underutilized as a parking lot. This will benefit the downtown, all of the businesses there, and the city will get parking revenue for 99 years, a building built and meet other economic goals.”
Reach AnnMarie Cornejo at 781-7939. Stay updated by following @a_cornejo on Twitter.