The Mercury News
04/05/17

New High-rise Hotel Slated for Downtown San Jose
By George Avalos

http://www.mercurynews.com/2017/04/04/new-highrise-hotel-slated-for-downtown-san-jose

Downtown San Jose is slated to land a new 24-story hotel, in a proposal that would blend a gleaming tower with a historic hotel and add nearly 300 rooms for visitors to the city’s urban core.

The planned 279-room hotel will be named The Tribute Hotel San Jose, a recently created flag of the Marriott hotel chain. The tower is proposed for the historic Montgomery Hotel site downtown.

“Tribute is a new brand for Marriott,” said Erik Schoennauer, a principal executive with San Jose-based The Schoennauer Co., a real estate and land-use consulting firm. “It will be a distinctive property.”

The new lodging tower would be attached to the old Montgomery Hotel through a glass atrium, and the project would preserve the existing hotel at 211 S. First St. Part of the new tower would rise over a portion of the old hotel building in a cantilever structure.

“The Tribute brand is associated with a historic property in destination cities of the world yet maintains the individuality and the historic nature of the existing buildings,” said Randy Zimmerman, general manager of the The Four Points by Sheraton San Jose Downtown, which is the official name of the 86-room old Montgomery Hotel.

In the late 1990s, the Montgomery Hotel barely eluded a wrecking ball and was eventually moved in 2000 roughly 182 feet to accommodate construction of a 13-story annex to the iconic Fairmont Hotel. The Montgomery was redeveloped for $8.5 million and then reopened in 2004 as the Four Points hotel.

“The amenities of the hotel will be dramatic,” Zimmerman said of plans for the new Tribute Hotel. “We will be putting a pool on the rooftop. We will have a meeting spot up there as well.”

The 279 new rooms would likely provide lodging for visitors to events at the nearby San Jose McEnery Convention Center.

“For more than a decade, there were no new hotels built in downtown San Jose, and that made it difficult for the San Jose convention center to be competitive with other convention centers in the area,” Schoennauer said.

That dry spell ended in January, when the AC Hotel opened at 350 W. Santa Clara St. in San Jose.

And other hotels have sprouted in Santa Clara County or are being actively planned in San Jose, an indication of the sturdy economy in the Bay Area and Silicon Valley.

“For the convention center to be competitive, it will be necessary to have more hotel rooms within walking distance of the center,” Schoennauer said.

If San Jose authorizes the the hotel, construction on the new Tribute would likely begin by early to mid-2018 and last 18 months, Schoennauer said.

“We definitely have a bit of an uptick in new hotel development in the Bay Area,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California lodging industry. “That is understandable. The values in existing hotels are at or near replacement levels. That is driving new development.”

At the end of 2016, six hotels totaling 893 rooms were under construction in Santa Clara County, including the 210-room AC Hotel that opened in San Jose this year, according to an Atlas Hospitality report.

The East Bay added a hotel last fall, the 175-room Hyatt Place Emeryville.

“All of the fundamentals in Silicon Valley and San Jose look good; there is a lot of commercial development, employment growth,” Reay said. “I see nothing on the horizon that would take the wind out of the sails in San Jose.”