UPDATE: Hilton expansion moves ahead in Santa Clara

A proposed expansion of Santa Clara’s Hilton Hotel moved one step further after the City Council approved a plan that exceeds current regulations.

In a public hearing Aug. 18, the council green-lit a dense addition to the 3.86-acre property at 4949 Great America, which faces Levi’s Stadium.

The development would replace an existing surface parking lot with a 22-story building that would feature seven floors of parking and 319 hotel rooms, according to a presentation by Erich Smith, vice president of operations for Stanford Hotels, which purchased the existing 280-room hotel in 2004, and Dennis Rogers, principal designer with ACRM architects,

A rooftop restaurant and public observation desk also are planned— neither of which are expected to have overhead views into football games and other events.

For scale, the expansion would be 20 feet higher than Drop Tower: Scream Zone, the tallest ride at California’s Great America amusement park next-door. Smith and Rogers said they would research if that height is permissible by the Federal Aviation Administration, especially so close to San Jose’s Mineta International Airport.

Councilmembers approved the proposed floor area ratio — the total useable floor area relative to the building’s lot — even though its higher than city policy allows.

According to Rogers, the increased density wouldn’t create any negative impacts because the location is far from residential neighborhoods. He said the expansion would provide much-needed hotel rooms, which in turn would generate more tax revenue to flow into the city.

That rationale isn’t off base.

Reduced transient occupancy taxes from hotels and motels due to COVID-19 is one reason Santa Clara faces tens of millions in projected deficits. According to Finance Director Kenn Lee, his office expects transient occupancy rates to drop 50 percent, an estimated $5 million loss.

Smith said the hotel has provided $2.5 million annually in transient occupancy tax revenues to the city. City leaders are preparing to ask voters to increase this tax on November ballots.

Additionally, the request from Hilton comes one month after Gateway Crossings, a massive mixed-use development along Coleman Avenue near the city’s Caltrain station, delayed its 225-room hotel plans until much later down the pipeline due to funding issues because of the COVID-19 pandemic.

Worker Retention Policy

Mayor Lisa Gillmor requested the council review and update the city’s worker retention ordinance, which regulates staffing for food and building services for events such as conventions and San Francisco 49ers football games.

According to the latest version from 2017, whenever a business changes service contracts, current workers must be notified and rehired for at least 90 days.

The ordinance applies to any businesses with 25 employees, entertainment and convention venues with at least an 8,000 person capacity and contracts for more than $25,000 and at least three months.

Now, the city will consider amending the ordinance to protect workers who have been laid off, on furlough or will return to jobs under new ownership, especially as COVID-19 heavily impacted hotels, convention centers, stadiums and similar businesses. One idea was through worker recall, which would offer jobs back to former employees in respect to seniority.

“We’ve already created the wheel. I think we just need to add on more protections to help our community,” Gillmor said.

This idea was applauded by Sarah McDermot, political director for Unite Here Local 19, which represents hospitality workers at the Hilton, Convention Center, Levi’s, Intel and Nvidia. She said union members’ collective bargaining rights could run out by the time businesses open.

“Hospitality industry workers, many of whom live in Santa Clara, are struggling to pay their rent and feed their families,” McDermot said. “It is imperative you enact a worker recall requirement.”

The issue will return to council for  discussion Oct. 13.

Contact Katie Lauer at [email protected] or follow @_katielauer on Twitter.