A new 125-room hotel is in the works in SLO County. Will it get approved?
A new 125-room hotel may be coming to southern San Luis Obispo County in the next few years.
At its Tuesday meeting, the Arroyo Grande City Council reviewed the earliest proposal for a new Fairfield Inn & Suites by Marriott at 400 W. Branch St.
The three-story building would rise above Highway 101 on a 4.25-acre site on the northern side of the road near the Woman’s Club building, looking out over West Branch Street and the highway below.
At this stage, the hotel still has a ways to go before it can win approval. Tuesday’s meeting was simply the first proposal by Marriott to get the City Council’s feedback, city planning manager Andrew Perez said during the staff’s presentation.
Assistant city manager Bill Robeson said the city started preliminary conversations with developer Kamla Hotels as early as 2019, aiming to increase the number of hotel options — and funding streams — in Arroyo Grande. Preliminary studies on the hotel’s potential transient occupancy tax income indicate that the city could bring in around $600,000 from the new hotel alone, Robeson said.
“I think the main goal for this type of use is to start to establish and furnish the city with transient occupancy tax, also known as TOT,” Robeson said. “Those funds are hugely beneficial to the city. A city like Arroyo Grande, comparatively speaking to Pismo, is very small on the TOT numbers.”
What could new Marriott hotel look like?
The new three-story development is currently planned to take up 2.5 acres of the 4.25-acre site that spans a pair of unoccupied lots — the first hurdle the project would need to clear, Perez said.
Before it can bring any formal proposal to the Arroyo Grande Planning Commission, the two parcels would need to be merged and rezoned for hotel use. Both parcels are owned by the city and zoned for public facilities, and they could be sold to the developer by the city ahead of development, according to the staff report.
As planned, the project would require robust landscaping measures to obscure the hotel from the view of nearby residential neighborhoods to the north, lowering the grade of the existing land by around 25 feet.
In addition to the 125 guest rooms, the hotel would feature a gym, swimming pool and spa, according to the staff report.
Surrounded by trees, shrubs and city-standard curb, gutter and sidewalk connections along the nearby roads, the project also calls for 124 of the 127 parking spaces required for a hotel of that size, along with five motorcycle spaces, according to the staff report.
Those spaces would be accessible by two driveways — one on West Branch Street and another on Old Ranch Road, according to the staff report.
Council, public provide feedback
Project architect Tom Richardson, who represented Kamla Hotels over the phone to take the City Council and public’s questions, said while there is a need for more hotels in the area, the developer is committed to reducing noticeable impacts on the community.
“There’s going to be jobs for the construction of this hotel,” Richardson said. “There will be permanent jobs after it opens, and we feel that it’s going to be a good partner as far as just the general commerce with the community.”
Richardson said the project shrank over the course of preliminary negotiations with the city, dropping a whole story of rooms to fit in with the city’s height requirements.
A traffic study has not been produced yet but will be included when the project goes to hearings, Richardson said.
Several residents near the project said they were concerned about the increased flow of traffic through their neighborhood.
One Old Ranch Road resident said he was concerned that introducing a large hotel would further strain already-tight roadways nearby.
“I don’t know how you’re going to deal with this traffic,” the resident said. “You don’t have a direct on and off the freeway right now — it’s a nightmare trying to get under Brisco (Road). Ambulances are having problems getting through their heavy traffic times.”
Several residents said they were concerned that hotel would significantly alter the neighborhood’s character, and that water use would pose issues down the line in a neighborhood that is already doing its best to reduce water consumption.
City Councilmember Jim Guthrie said the site will be developed eventually, and he said he expects the hotel to have a relatively low impact on the nearby homes. He added that the additional TOT is be “the easiest money ever” that the city can bring in.
City Councilmember Aileen Loe said she wanted the developer to improve pedestrian access to the Village.
Mayor Pro Tempore Kate Secrest echoed the council’s previous concerns about traffic but said she was excited to see a new high-end hotel come to town.
Mayor Caren Ray Russom said she wanted to see traffic impacts to Old Ranch Road minimized by the applicant in future proposals, and she encouraged the applicant to hold multiple community meetings ahead of its next proposal.
“I don’t want to say there’s not downside, I don’t want to say there’s not impacts, but when you start looking at what those other things could be, it starts making a little bit more sense, and we can begin to work together as a community to make this be the best thing that we can actually make it in terms of of fitting into your neighborhood,” Russom said.
What’s next?
All told, if the developer wants to move forward, it must get a General Plan amendment, development code amendment, lot line adjustment and a conditional use permit to make the proposed site viable.
No development timeline has been proposed, but the project will next appear before the Arroyo Grande Architectural Review Committee and Planning Commission down the line.
This story was originally published February 13, 2025 at 10:00 AM.
