By Los Altos

Town Crier Staff Report

Developer Roxy Rapp said last week he plans to continue working with Los Altos city officials on the hotel development slated for First and Main streets despite the Los Altos City Council’s recent decision to possibly consider other options for the .78-acre site.

“Despite the bumps in the process, we are still dedicated to the project and to the community,” he said.

Rapp said he was surprised by the council’s decision, especially since he has spent hundreds of hours and tens of thousands of dollars on the city project.

Los Altos city officials have been negotiating with Rapp behind closed doors since last fall to develop a plan that would place a two-story boutique hotel on the site. The city chose Rapp’s 90-room Apricot Inn over another hotel project and a movie theater proposal during a competitive bidding process last year, after the city solicited developers for land-use ideas.

Neither side had struck a deal when the negotiation period expired June 1, though city officials earlier this year said they planned to continue working with Rapp.

Rapp said he had recently recast his proposal and financing approach to meet the city’s request to lease the land rather than sell it.

“We understood that our latest financial proposal - in response to city requests for a land lease and participation in hotel profits - was to be discussed in closed session that night,” Rapp said.

In a public meeting, the council announced they were willing to continue negotiating with Rapp but wanted to keep their options open. They decided to possibly scrap the downtown hotel plans to make way for a project that could accommodate parking for a nearby movie theater.

Council members said they plan to reopen the bidding process on the city’s First and Main street property following a special study session to establish criteria for a new retail-housing project with underground parking.

Such a project could provide the funding and space needed to replace parking that downtown will lose at its Third Street plaza if a movie theater proposal that the council approved this summer materializes, the council said.

Rapp questioned how the city would replace the existing parking on the site, provide parking for the possible 30 housing units and retail space that the council is considering and add parking for downtown on the .78-acre site.

He said 300 parking spaces would require four floors of underground parking to fit at the site.

Part of Rapp’s original proposal included $3 million to be allowed to develop a boutique hotel with meeting space, a small cafe and retail space.

Rapp had also planned to work with neighboring Safeway to improve and expand its adjacent parking lot.

Rapp anticipated that his project would have low traffic impact and would bring in annual revenues exceeding $1 million.