May 23, 2009--Building a luxury hotel on the site of the Holman Building in downtown Pacific Grove is back on the table, developer Nader Agha told the Pacific Grove City Council on Wednesday.

Armed with architects' drawings of concepts for the property, Agha said he has reconsidered his idea of abandoning the project in the face of overwhelming support expressed to him for the project.

In December, Agha listed the 84-year-old, 120,000-square-foot Holman Building and the 1.35-acre lot it sits on, as well as four other lots on Fountain Avenue being used for parking and a building across the street at 549 Lighthouse Ave., on the real estate market.

At the time he said he was fed up with nearly 14 years of delays in his attempt to build a luxury hotel on the site.

He bought the property at auction in 1995 with an eye toward razing the building and constructing a high-end hotel and conference center on the site at 542 Lighthouse Ave. In the interim, he remodeled the long-vacant department store as an indoor antique mall.

Agha said the property has an allocation of 7.5 acre-feet of water annually, and he planned to augment that for the hotel's use by building a small seawater desalination plant similar to those proposed for Monterey and Sand City.

A major hotel and conference center, he said, could bring the cash-strapped city $40 million to $50 million in room and sales tax revenues over the next 20 years. Several major hotel chains have expressed interest, he said,

because of the site's location and its panoramic ocean views.

Permit process

Environmental issues involving seawater intake and outfall on the city's coastline would have to be resolved not only with the commission, but with state and federal agencies that would have to issue permits on the project before it could go ahead, said principal city planner Lynn Burgess.

State law prohibits privately owned and operated seawater desalination plants, she said, so a public agency -- either the city or a special district formed for the purpose -- would have to be responsible for its operation.

Agha said he has several solutions to the water issue in mind for a hotel development, adding that building a hotel on the property bordered by Lighthouse, Grand, Central and Fountain avenues would restore it to its historic use.

Former El Carmelo Hotel

The department store building, its upper floors largely empty, sits on the what was once the site of the El Carmelo Hotel. It was Pacific Grove's first true hotel when it opened May 20, 1887.

Constructed by the Pacific Improvement Co., the three-story building contained 114 rooms and included six cottages on Grand Avenue.

The name was changed to the Pacific Grove Hotel in 1910 to avoid confusing it with the new city of Carmel.

The hotel was torn down in 1918 and the lumber salvaged to help build the Del Monte Lodge in Pebble Beach.

Store founded in 1891

Holman's Department Store was founded by R.L. Holman in 1891 and opened at the Lighthouse Avenue site in 1924. In 1931, Holman added additional floors to the original two-story building to form the current structure.

Holman's Department Store is mentioned in John Steinbeck's novel "Cannery Row." In 1985, the Ford's Department Store chain bought the company and operated the Pacific Grove department store until 1993. Agha and Richard Risko bought the building for $1.95 million in 1995.

Kevin Howe can be reached at [email protected] or 646-4416.

HERALD QUESTION OF THE DAY Should the Holman Building be demolished to make way for new development? o Yes o No Go to: montereyherald.com to place your vote Herald surveys are unscientific ------

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