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Four Seasons Hotel in East Palo Alto Will Be
 the City’s Largest Revenue Generator
By HongDao Nguyen, San Jose Mercury News, Calif.
Knight Ridder/Tribune Business News

Sep. 14, 2005--It was part pep rally and part business at a recent recruiting session for East Palo Alto's luxurious new Four Seasons Hotel.

"Did you hear anyone say the city of Palo Alto?" asked Marie McKenzie, a city redevelopment manager.

"No!" the crowd of more than 100 shouted back.

"Where is this hotel located?" McKenzie asked.

"East Palo Alto!"

In a community where residents have often eyed redevelopment with suspicion, the scene reflected the hundreds who have embraced one of the city's newest developments -- if not primarily for the jobs. Compared with the jabs thrown over the 2003 opening of a giant Ikea furniture store, the Four Seasons debate has been tame.

But even as residents look to the hotel to fill one major need, they point out the community voids that remain -- most important, a full-service grocery store.

It's a balancing act for residents who want their 22-year-old city to be self-sufficient but must deal with the reality that it's not there -- yet.

"We can get a paycheck, but we can't get a steak," said Karen Johnson, 53, who was nevertheless interested in getting information about weekend work at the Four Seasons. "Things are blossoming and improving by leaps and bounds, but there are still inequalities."

City officials tout the economic benefits of the 190,000-square-foot, 10-story tower. Transient occupancy tax revenues could eventually add more than $3 million annually to the city's coffers, making it the city's largest revenue generator, said redevelopment director Carlos Martinez.

Practically, residents are excited about possibly snagging one of 270 hotel jobs -- at least 30 percent of which are supposed to go to East Palo Alto residents. "This opens a lot of doors to a lot of different people, including me," said Wesley Barker, 42, who is interested in a line chef job at the Four Seasons.

And, residents add, the luxury hotel and surrounding redevelopment casts a positive light on a city that has long grabbed headlines for crime.

People are starting to see the city in another way -- "as a place that you can come, work and raise children," said Jannie Parker, 22, a sales and system administrator for the Four Seasons. Parker was the first East Palo Alto resident hired by the hotel, which is set to open its doors in December.

But some residents can't shake the fact that the hotel helped replace Whiskey Gulch, a gritty but beloved gathering place for residents that was home to non-profits and small mom-and-pop stores.

Lourdes Best, a program co-coordinator at Youth United for Community Action -- one of the non-profits forced to move from the Gulch -- wondered about the city's priorities.

"I think there's a lot of needs here," said Best, 24. "We need a grocery store, not a law firm, not a Four Seasons Hotel." The hotel's $300-plus per night stays will cater more to those outside the community than residents in it, she said.

McKenzie, the redevelopment manager, said she responds "softly" to people who question redevelopment -- it's a delicate issue.

Since the agency designated the area for redevelopment, the Four Seasons and University Circle office complex have helped wipe out blight, she said. The assessed value of the redevelopment property has risen 17 times, Martinez said -- from $7.3 million in 1988 to more than $125 million today.

That increased value has meant more tax money for low-income housing and the Ravenswood school district, among other things. And the assessed value of University Circle is set to rise even further with the recent sale of the property for $293 million.

The hotel will be the biggest development yet in the city's ongoing transformation. In the early 1990s, the city collected just $98,000 in sales tax revenue, the biggest chunk coming from a McDonald's. Now, thanks to the likes of Ikea, which quietly celebrated its second anniversary in town last month, and Home Depot, which plans to expand into the recently closed Design Expo, East Palo Alto took in $2.56 million in sales tax revenue in the 2004-05 fiscal year. In time, the Four Seasons could more than double that figure.

There's also movement on the grocery store front. At a study session Tuesday evening, city staffers updated the city council and members of the public about ongoing negotiations with grocery store operator Grupo Gigante.

But for now, eyes in and outside the community are on the Four Seasons.

The hotel is one of the best "on the planet," said K.O. Odsather, associate director of the hospitality industry management program at the University of San Francisco. For the hotel to partner with the city and guarantee jobs to residents is a huge commitment, she said. Her class will be studying how the hotel fares.

East Palo Alto Vice Mayor Ruben Abrica acknowledged the voices in the community that called for a grocery store to be built first, but said he was confident the city was taking steps toward that goal. As for the hotel, he said, people are excited about the prospect of work.

"There's been controversies in the past," Abrica said. "But from my point of view, we have what we have, and we have to look to the future."


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