Nov. 6, 2009--A revamped proposal for a hotel in downtown Pacific Grove by developer Nader Agha received a guardedly favorable review by members of the Pacific Grove City Council.

Agha has been pursuing the idea of a major hotel on the site of his Holman Department Store property for the past seven years.

On Wednesday, he described the existing store building as "an old building at the end of its economic life." His attempts to remodel it and attract tenant retail businesses, Agha said, have not been successful, and given the competition of nearby shopping centers, aren't likely to be.

Agha is proposing to build a 300-plus-room hotel behind the department store in a lot facing Central Avenue between Fountain and Grand avenues, currently occupied by a parking lot and a one-story structure housing several businesses.

Councilmen Bill Kampe and Alan Cohen presented council members with what Kampe described as "a checklist of issues" related to the hotel proposal.

The structure Agha is proposing, they said, would provide 250 to 420 rooms, a restaurant and conference center, a basement parking garage, and a multi-story parking garage in the lot behind the Lighthouse Cinema movie theater on Lighthouse Avenue.

He is proposing to drill a well on the site and install a desalination system to provide water for the hotel and low-cost housing for employees.

The cash-starved city could reap $1.7 million to $2 million per year in hotel room taxes and the hotel could spin off business

to downtown, which would bring in more sales tax money, they said.

Among the issues the city can expect to consider will be: preserving Holman's as a historic building; county regulations requiring that desalination systems be publicly owned; parking; traffic; and getting building height variances that Agha said will be needed to make the hotel economically viable.

Measure E, approved by Pacific Grove voters in 1994, was advertised as a "save Holman's" measure that allowed development of a hotel but limited building height.

While the old department store building would remain, Agha and designer Victor Montgomery of RRM Design Group of San Luis Obispo said they have no specific plans for its future.

Craig Anthony, general manager of California American Water, said a large project, such as a major hotel, offers the opportunity for the developer to build in water recycling facilities on the site.

Councilman Robert Huitt said he will have to be convinced that a smaller "boutique" hotel wouldn't be economically feasible and more appropriate for the site.

"I'm not ready to endorse a hotel on this scale," he said.

Cohen said a community meeting at which Agha would answer questions posed by the public would be part of the process of considering the hotel development.

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

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