A historically controversial proposal to build a San Bruno hotel is slated to move forward, under an deal announced between city officials and a private developer.

San Bruno officials agreed to sell a slice of city-owned land near the intersection of Interstate 380 and El Camino Real to OTO Development for $3.97 million, where the builder will erect a 152-room hotel, according to an agreement made public Friday, March 11.

The Crossing Hotel has been promised for development on 1.5 acres of property adjacent to Jack’s Restaurant since 2001, when voters passed Measure E, boosting allowable height for developments near The Shops at Tanforan.

Mayor Jim Ruane celebrated the sale, in a prepared statement.

“This agreement with OTO Development is an important step forward in improving our community, creating jobs, generating nearly a million dollars annually in new revenues, and fulfilling the promise of Measure E, which was overwhelmingly approved by voters in 2001,” said Ruane.

The San Bruno Planning Commission is set to consider the project during an upcoming meeting Tuesday, March 15, and it will go Tuesday, March 29, to the City Council. The final details of the acquisition are being determined, and will be released Tuesday, March 22, according to the city.

The agreement was not universally lauded though, as some residents have been outspoken in their criticism of the project.

San Bruno resident Ryan Mrsny said he believed officials undercut their negotiating power by agreeing to exclusively negotiate with OTO Development, which is based in South Carolina.

Citing the recent purchase of nearby properties by YouTube, Mrsny said he believed officials should have done more to negotiate a higher sales price.

“It’s upsetting because that property is the last piece of undeveloped land that is worth any value in San Bruno, and we lost it for a bargain basement price,” he said.

YouTube bought the Bayhill Office Center, a five-building office park close to the Crossing Hotel site, for $215 million in January. The online video streaming giant also spent $88 million last year to purchase twin office towers housing its headquarters at 900 and 1000 Cherry Ave.

Both the YouTube properties are fully developed and the Bayhill site houses workers from other notable companies such as Walmart.com and Oracle.

As San Bruno becomes a more attractive destination for notable corporate citizens, Mrsny said officials should have attempted to capitalize to the fullest extent.

“It is my opinion they have forced the appraisal to be much lower than the land is really worth, by at least $10 million, based on land sales in Bayhill and along El Camino Real in San Bruno recently,” he said.

A lawsuit was filed by residents and a local labor union last month attempting to disclose the details of the most recent land value evaluation process for the Crossing Hotel site.

Those who filed the legal action expressed concerns regarding a perceived lack of transparency by city officials during the acquisition negotiations. In response, officials posted a copy of the land appraisal to the city’s website.

Critics of the project had also taken issue with a discussion of officials possibly offering a subsidy to the developer to build the project. But the final agreement included no givebacks from the city, according to a press release.

Under the agreement, OTO Developments will invest roughly $50 million to build an upscale Marriott hotel, which includes a community gathering space for as many as 300 people, according to the press release.

The project is estimated to generate roughly $1 million annually in transient occupancy tax revenue to the city, and generate between 30 and 40 new jobs.

Ruane said he believes the agreement is a step toward delivering the promise made to San Bruno residents years ago.

“After years of work, the project as proposed today aligns with the goals and needs for this site,” Ruane said. “Best of all, it satisfies this community’s long-standing desire for an upscale hotel with a high-end meeting and event space that will serve as an economic engine and signature gateway project for the entire community to enjoy.”

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