88 hotel rooms, creekside dining and retail space coming to downtown Atascadero

The boutique hotel and retail development planned for Atascadero's Colony Square is officially a go — although it won't be open for business for another two years.

The city Planning Commission recently approved the proposed three-story, 88-room hotel and accompanying retail and restaurant space slated for a long underdeveloped area just south of the Sunken Gardens.

A Colony Square development has been in the works for nearly a decade, although the Great Recession prevented plans from moving forward until recently.

The Oak Creek Co., a Santa Barbara-based development firm, purchased two big lots in the development toward the end of 2015. Their property includes Galaxy Theatres and the adjacent restaurants and shops.

The hotel will be located on a vacant L-shaped property directly across from Que Pasa Mexican Cafe.

In addition to the guest rooms, the development will feature 9,800 square feet of retail and restaurant space, a large hotel lobby, meeting space and a restaurant near Atascadero Creek.

Developer Jeff Nelson said the project will likely include two restaurants and a wine bar in the hotel lobby, along with a rooftop deck.

"On the exterior, we made it a cleaner Spanish colonial style," he said.

Nelson said Oak Creek will likely break ground on the development toward the beginning of 2019. It should be finished by summer 2020, he said.

Residents have expressed concerns about how the new development will impact parking in the area, where many movie-goers currently use the vacant dirt lot as extra parking space.

Phil Dunsmore, the city's Community Development director, said the project will add nine or 10 more paved parking spaces and may feature valet parking at certain times.

In addition, the city has many more public parking spaces throughout the downtown area, especially just across a new pedestrian bridge connecting the Sunken Gardens to the Colony Square area, Dunsmore said.

"The idea was never to build Colony Square as a big parking lot," he said.

Even if visitors aren't able to park on site, they'll likely only need to walk 50 to 100 yards to reach the shopping and entertainment area, Dunsmore said.

"With everything built out, we still have a lot of surplus parking compared to demand," he said.

This story was originally published May 23, 2018 at 6:09 PM with the headline "88 hotel rooms, creekside dining and retail space coming to downtown Atascadero."