R.D. Olson Planning Upscale Hotel in San Carlos


By Alice Yin

San Carlos is about to build its biggest hotel yet.

The city has partnered with Irvine, Calif.-based R.D. Olson Development to build a 204-room extended-stay hotel on Industrial Road and East San Carlos Avenue. The so-called Landmark Hotel project, expected to receive final City Council approval July 27, is slated to begin construction around November and open in early 2017, said Dustin Schmidt, R.D. Olson’s vice president of real estate acquisitions.

The city agreed to purchase the four-acre property for $13.69 million in November 2013, said Al Savay, community and economic development director for the City of San Carlos. The four-story hotel will include 165 parking spaces and offer shuttles to the Mineta San Jose and San Francisco International airports, he said.

“We have a couple of hotels in the community but this is the most contemporary offering [and it is] in a very significant and highly visible location,” Savay said. “We don’t have hotels of this scale and magnitude. It’ll be bigger and the most modern and contemporary version of executive travel suites on the Peninsula.”

The city met Monday, July 6, to wrap up the project’s entitlement process, seeking approval from the planning commission on its conditional-use and design permits and grading and dirt haul operations. City Council must now give the final sign-off after approving the environmental impact report and development position agreement.

The area overlooking Highway 101 has been known as a “landmark site” for the past 25 years. After the property went on the market, Savay said the city moved on the opportunity to rezone the hot spot, following a “desire in the community to have some kind of development there that had a gateway appearance that was an iconic, identifiable regional draw.”

Located midway between San Jose and San Francisco, the hotel’s arrival is timed with a wave of new economic development in the area. Businesses such as Palo Alto Medical Foundation and SoftBank Corp. (which announced in April that it was planning to sublease its two buildings) recently moved into the city, mixing a high-technology presence into the historically industrial economy.

“It is an area that is highly visible on the 101 freeway in the heart of the Silicon Valley,” Savay said. “It is finally starting to see a lot of development interest and activity.”

The hotel will mainly host the “executive business traveler,” Savay said. It contains a 1,500-square-foot meeting space, which will also be open to the public. Schmidt added that the building also will accommodate leisure guests as it will be an upscale building with amenities such as kitchenettes, a pool and basketball court. The property will feature about 140 trees bordering walking areas.

Additionally, the hotel benefits San Carlos due to the transit occupancy taxes that will go toward the city’s general funds, Savay said. Also, the Peninsula would benefit from the project as there is a need for more hotels in the area, he said.

Neighboring communities expressed some concerns about the project, including its impact on traffic at the intersection of Industrial Road and Holly Street, next to the hotel’s border, Schmidt said. Since then, R.D. Olson worked with the city to signalize the high-traffic area, increasing pedestrians’ safety.

“Now you have a signalized crosswalk to establish pedestrian crossing, which is a big thing,” Schmidt said. “It creates connectivity to downtown. A pedestrian can cross Industrial, walk through the neighborhood and walk underneath train tracks and safely cross into downtown.”

The landmark hotel will be R.D. Olson’s first development project in Silicon Valley. Schmidt said the company believes the building will be a “tremendous add” to the area.

West Coast Commercial Real Estate News