By Linda Taaffe

The Los Altos City Council is scheduled to set down the guidelines for another round of project bids for the city’s First and Main streets property Tuesday night - this time with an eye on housing and retail.

This will be the second time city officials will solicit Request For Proposals for the site. The council unexpectedly scrapped plans to build a hotel on the .78-acre property last September following months of project negotiations with developer Roxy Rapp and an intensive selection process that included eight proposals. Rapp’s 90-room hotel beat out plans to build a movie theater with housing, another hotel project, a business complex, an expanded Safeway parking lot and retail centers designed by the property’s current tenants, The Home Consignment Center and Nielsen’s Martinizing Dry Cleaning.

Council members cited a flawed selection process and drawn out negotiations for reopening the bidding process. Rapp’s project will still remain an option, the council said.

Community Development Director James Walgren said this round of proposals will be more specific than the first time, when the city asked developers to submit development ideas. The council is looking at setting specific guidelines for a complex with underground parking, retail on the ground floor and two levels of housing, he said.

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, Councilman King Lear said.

Property tenant Jin Lee, who owns Nielsen’s Martinizing Dry Cleaning and could be displaced by the development after his lease expires in 2006, said he believes that a hotel would bring in more traffic than customers but is willing to support any project that would benefit the community.

“If the city project is good for the citizens, I will try to help. If they make a project for city profit for themselves and it is not good for the citizens, I’m against it.”

Walgren said city staff is scheduled to prepare and send the RFP to about a dozen developers following Tuesday’s meeting. He said the council would more than likely be able to choose a plan by early next spring.

Walgren did not have a cost estimate for the second round of bidding. He said the second round should be less costly since the city will not conduct as many intensive studies as the first round, which included traffic and economic studies for a possible movie theater.

The city has already spent tens of thousands of dollars studying site options, including $55,000 on two consultant studies to determine whether a theater could fit at the First and Main site and what type of economic impact it would have on downtown.