Revised plan for 123-room hotel near Napa’s Oxbow district approved

A Southern California-based developer’s request to revise a previously approved four-story hotel project planned for Napa’s Oxbow district was approved Tuesday evening by the Napa City Council.

The request again proved controversial among public commenters, several of whom cited traffic and climate concerns, along with concerns about the high number of hotel rooms planned for the Oxbow district and their potential impact.

But the council voted 4-0 in support of the proposal Tuesday, with members arguing the benefits of approval, including increased tax revenue and a 41-unit affordable housing complex, were too important.

Council member Beth Painter said the council essentially had a choice between the revised proposal and the already-approved one. She also said one of her main concerns was getting a project that could actually be built. At the same time, she said, updating the city’s analysis of downtown and the Oxbow district is a “really high priority.”

Council member Mary Luros recused herself at the request of the applicant Monday night, noting that her law firm had carried out minor work with connection to Tim Herman, an entrepreneur and development partner on the hotel project, within the past 12 months and she wanted to avoid “any appearance of impropriety or bias.” Luros was one of two council members who voted against the original project in 2020.

The First and Oxbow Gateway Hotel is proposed to include two four-story, 60-foot buildings near Soscol Avenue and First Street.

Irvine-based Developer Stratus Development Partners, which took over the project from the original developer, requested to increase the number of previously approved rooms from 74 to 123, among other changes.

The original Foxbow project proposal — by Napa-based developer JB Leamer — received City Council approval in 2020.

That version of the project included ground-floor retail space, meeting space, a cafe and two underground levels of parking. But in the new proposal, Stratus sought to eliminate the hotel’s retail and meeting spaces, along with reducing hotel room size, to increase parking as well as the number of hotel rooms.

Stratus managed the company that owned the 90-room Cambria Suites Napa hotel prior to it being lost in an $80 million foreclosure in 2023, along with a 132-room Cambria hotel in Rohnert Park.

The revised project came to the council with an endorsement from the city’s planning commission, which voted 3-1 on Feb. 1 — commissioner Gordon Huether recused himself as he’s a consulting artist on the project — to recommend approval.

David Wood, Stratus co-founder, touted the hotel’s benefits to the city at the Tuesday meeting. Wood said those benefits included about $4 million in annual tax revenue and fees to the city, assuming an 85% occupancy rate.

Had the project been denied, the developer could have still moved forward with the constructing previously approved version. But Wood noted at the Feb. 1 meeting the increase to hotel rooms was needed because the 74-room project wouldn’t make financial sense given that it wouldn’t have a sufficient number of rooms to attract a flagship hotel operator, such as Marriott or Hilton.

Though technically separate from the hotel development, Wood also said he’d helped connect affordable housing developer Jamboree Housing Corp. — he serves as chair of its board of directors — to city staff and helped identify a site for the affordable housing at 515 Silverado Trail, which is now entitled for 40 one-bedroom affordable units plus a manager’s unit, as well as residents services.

Kelsey Brewer, vice president of business development at Jamboree, said they wouldn’t be in the city without Wood’s help.

Wood also said Stratus still planned to pay the affordable housing in-lieu fee of about $900,000 for the hotel project into the city’s affordable housing trust fund. And he said that each year, going forward, the hotel will contribute 1% of its gross revenue to the city’s affordable housing fund.

Most of the commissioners at the Feb. 1 meeting voted in support of the hotel project, though a few also expressed that they thought the city needs to review the downtown and Oxbow area.

The need for a comprehensive review has generally been the main focus of project opponents, who have also expressed concerns about traffic, a lack of employee housing and climate impacts.

In a Feb. 2 email to the council, the Napa Housing Coalition requested the council move forward on an update to the city’s Downtown Specific Plan — last updated in 2012. The coalition notes that the city currently has around 3,000 hotel rooms with an occupancy rate generally hovering around 63%, and there’s the possibility of over 1,100 hotel rooms going up in the Oxbow district including both approved and proposed projects.

“It is critical to start addressing the right mix of uses including housing, commercial, hospitality and office,” the coalition wrote.

The coalition also specifically requested the city hire a consultant to prepare a hotel market analysis, examining a range of factors — such as the collective impact of hotel rooms — and developing a plan for the appropriate number of rooms, timing and locations, as well as recommendations on how to address the housing needs for below median income workers.

Since such a process would take time — the coalition notes the city could be well into 2025 before meaningful information comes out of it — the coalition also recommended a discussion of a possible moratorium on new hotels until the studies are concluded and new guidelines implemented.

Steve Carlin, managing partner and founder of the Oxbow market, said in an email to the council that he supported the coalition’s recommendations. There is too much going on in the Oxbow to not take the step of “understanding the collective impact of all the planned or approved developments, largely hotels, in this area,” he wrote.

“We are certainly not opposed to development in The Oxbow,” Carlin added. “We welcome responsible and thoughtful additions to this very special slice of Napa. However, without a clear and comprehensive analysis of what future potential development will mean to this area, our community, and the city of Napa, we could easily be jeopardizing what has been accomplished here over the last 20 years if all these projects are built without regard to the whole.”

Chuck Shinnamon, a member of the coalition, said at the meeting that he applauded Wood for bringing Jamboree into Napa, but said the affordable housing project is separate from the hotel approval. He added that he thought there was a lack of clarity on that in the planning commission meeting, that some commissioners seemed to think the needed housing would go away should the revised hotel project be turned down.

In an emailed comment, Shinnamon said hotels in Napa have brought many positive things to the city, such as increased visitors, tax funding and downtown activity, but “there always is too much of a good thing.”

“It is time for all of us, you as selected officials, staff, and the overall community to have a real conversation about the number and scope of hotels and hotel rooms in our town,” Shinnamon wrote.

But the council members noted they were limited, for now, in what they could do to address the larger questions. Council member Liz Alessio noted that it was her understanding that it’d be illegal for the council to delay the project as it seeks to update the city’s Downtown Specific Plan.

Alessio also asked whether there was any way to tie the construction of the Jamboree project to the hotel, to make sure that it happens. But associate planner Ryder Dilley said, in short, it wasn’t possible.

Painter added that she thought many of the community concerns are connected with the city’s development permit extension process. Typically, developers have two years starting after approval to begin construction. But those permits are then sent to staff for two-year extensions, and only come to the council for a discretionary approval after that.

Given that many developers are stuck in that extension process there appears to be a growing list of hotels, Painter said, but “the reality is a lot of them just simply may never get built.”

As a move to help rectify that, she asked that the city require the first permit extension for the project — which happens two years after approval — come back to the council instead of going to city staff.

“If we really want to move in the direction of looking at hotel projects that are viable and will be built, I think those extensions should come back to us” Painter said.

The council members present said they approved of that change.

Sedgley added that he thought what the project would bring the city in terms of both revenue and affordable housing was too significant to turn down.

Sedgley noted that though the Jamboree project isn’t technically connected with the hotel proposal, “they definitely are working in tandem. I think we have them here because of this project.“

“It’s change, I know it’s going to be bigger for the corner, but if we really look at what we want to accomplish moving forward I think we have to look pretty objectively on what we’re trying to do for the city as a whole,” Sedgley said.

You can reach Staff Writer Edward Booth at 707-521-5281 or edward.booth@pressdemocrat.com.