By Linda Taaffe

The seemingly doomed hotel project slated for downtown Los Altos isn’t a dead deal after all. The Los Altos City Council last week ditched plans to solicit more project proposals for the 78-acre city-owned site at First and Main streets in favor of re-establishing negotiations with hotel developer Roxy Rapp.

Time and money appeared to be the deciding factors in last week’s unexpected decision. Councilmen Lou Becker and John Moss said they were adamantly against spending more of either on another project.

“The Request for Proposals is a waste of time and money,” Moss said.

He said the hotel option is the best solution because it is well thought out and offers many positives.

“I really do think the hotel will promote a steady stream of (tax) revenue that the state can’t take away,” Moss added, noting that the revenue would be extremely important for Los Altos, which doesn’t have “big box retail.”

The hotel project could potentially bring in up to $400,000 annually in transient occupancy taxes — money that the state government can’t touch, according to a 2001 city staff study.

The city severed negotiations with Rapp last September after spending nearly a year and tens of thousands of dollars bargaining behind closed doors. Parking and land ownership issues prolonged talks past the negotiation extension deadline last June.

The city chose Rapp’s 90-room boutique hotel from among eight proposals during an intensive selection process.

Council members decided last month to consider reopening the bidding process for an alternative retail-housing project with an underground garage that could provide more downtown parking spaces than the hotel project. The council agreed to keep Rapp’s project an option during the process.

Councilman Francis La Poll said a housing/retail project could provide more downtown parking, which was the city’s primary goal when purchasing the property in 1995. Such a project was not among the choices during the first round of request for proposals.

A retail project could potentially provide 150 spaces, Councilman King Lear said.

Rapp returned to the council last week with modified hotel plans that included more retail spaces on the ground floor. Rapp said he has already spent $15,000 on a parking lot study with the adjacent Safeway store for a joint parking expansion.

Merchants rallied the council to continue negotiating with Rapp.

“No one’s going to bring in a proposal with specifically what we want,” Becker said. “If there are things we want, we need to bring those things out in negotiations.”

The council is set to decide its next move with Rapp at the regular council meeting Dec. 10.