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By Mike Allen
April 29, 2023 (Santee) - Santee’s City Council unanimously approved a four-story, 97-room hotel at the Trolley Square Shopping Center to be operated by either the Hilton or Marriott chains at its April 26 meeting.
The immediate target for the new lodging is the legions of visiting athletes and their families who come to play baseball and soccer at Sportsplex USA, just up the block from the planned hotel, who are unable to find accommodations inside the city.
“Sportsplex USA runs fabulous tournaments here and traveling teams have nowhere to stay so they go to adjacent cities, and we’re losing out on those customers,” said Vice Mayor Laura Koval, referring to the valuable hotel room taxes that go elsewhere.
According to a city report, the sports complex at Town Center Community Park draws about 400,000 visitors annually competing in more than 50 tournaments. Santee has only three hotels ranging from 47 to 57 rooms, but none of them were deemed as “nice” by Koval.
“If you live in Santee there’s not a nice hotel in Santee right now,” she said.
Santee has been trying to build a hotel in its core Town Center area for many years, and struck a deal with Excel Hotel Group last year, selling the 1.6-acre parcel for $1.4 million. The location, behind the PetSmart, DSW and 24-Hour Fitness outlets, was originally planned as the city’s new library, but the Council determined a hotel would be a better, and obviously, a more financially-benefiting fit for the site.
Not everyone was applauding the deal. A representative from Kimco Realty Corp., the owner of the Trolley Square Shopping Center, said adding a hotel and eliminating that parking lot would cause the closure of the 24-Hour Fitness gym.
Photo, right: parking lot of Trolley Square where new, 97 room hotel will be built.
Kimco’s Anthony Santo also said reducing the parking requirement as part of the hotel plan, allowing 61 spaces instead of 99 mandated by the zoning code, will result in Kimco being forced to tow hotel visitors’ cars parked in non-hotel spaces.
When Santee decided to use the parcel for a hotel instead of a library, Kimco sued the city, claiming it owned the parcel. Santee prevailed in the litigation and sold the parcel to Excel Hotel Group last year.
City Attorney Shawn Hagerty said he wanted to clear up any confusion surrounding the matter, and said Kimco cannot stop the city from designating the site for a hotel.
Santee has been working hard in recent years to revamp its image, and entice attractions that would lure more visitors. But some of those plans haven’t panned out.
A combined movie theater/restaurant blew up when the company, Studio Movie Grill, went bankrupt. Karl Strauss Brewery was granted a construction permit in 2015 but has never made any effort to follow-through on its planned brewery/restaurant. The hotel is viewed as a keystone to the city’s touted arts and entertainment district.
In addition to the city granting a variance over the minimum parking spaces for the hotel, the Santee Council also granted Excel reduced set back distances from the Town Center Parkway.
The Council also granted Excel $2.5 million in subsidies for the construction that is estimated to cost about $17 million. The city said it will make those payments from collected hotel taxes after the hotel opens. According to the city report, Santee should collect about $677,000 in hotel taxes over the 10-year agreement once the subsidy payments are made to Excel. Starting in year 11 or after the full $2.5 million in subsidies are paid, Santee will collect an estimated $344,531 in hotel taxes annually.
The subsidy was disclosed in a separate economic development agreement the City Council approved in a 5-0 vote, but generated no comment from the five elected councilmembers. The project will generate about $712,000 in developer impact fees and create 20 new jobs, the report said.
Mayor John Minto said the city wanted to work with Kimco to resolve the parking issue, but wasn’t encouraged by history which included an instance when Kimco threatened to tow cars during the annual street fair, which draws thousands of visitors to the shopping center. City Manager Marlene Best quickly injected that situation has been resolved.
In other matters, the Council heard a detailed report from a contracted consulting firm about the city’s two fire department stations, and how these might be expanded and upgraded. The report recommended that the city double its stations to four, build a new maintenance station, increase its equipment, and add 12 new fire fighters. The cost for the facilities alone was $52.5 million.
The council was presented with four options to finance the capital improvements: increasing the sales tax by a half percent to 8.25 percent; issuing a general obligation bond; increasing the city’s fire benefit fees; and increasing a combination of sales, property, and hotel taxes.
All five councilmembers said they could support increasing the sales tax by a half percent, but directed their staff to conduct a study on the amount of money the sales tax currently generates.
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