SJ’s Iconic Fairmont Hotel Files For Chapter 11, Closes For Now

The landmark Fairmont Hotel, located in the heart of downtown San Jose's cultural and entertainment district, is temporarily closing, it was announced Friday.

FMT SJ LLC, the operator of the iconic hotel, filed for Chapter 11 reorganization Friday, temporarily closing the hotel for as much as three months while it finds a management partner and extends the existing mortgage debt.

The LLC is owned by San Ramon-based Eagle Canyon Management, which bought the hotel in January 2018 for more than $220 million from longtime property owner Maritz, Wolff & Co., led in part by Silicon Valley developer Lew Wolff.

The hotel abruptly ceased operations Friday, relocating its few remaining guests to rooms at nearby hotels at ownership's expense.

“We know that by taking this difficult step, we will come back a more vibrant hotel to the benefit of everyone in San Jose, including the vitality of the city's downtown, nearby businesses, and Silicon Valley conventions in a post-COVID-19 world,” said Sam Singer, the hotel's representative.

Singer said the hotel is expected to gear up for operations again in roughly 60 to 90 days.

Additionally, Singer said the hotel has suffered from the impacts of COVID-19. As a result of the pandemic, all conventions for 2020 and 2021 have been cancelled, and occupancy throughout the pandemic has been less than 7 percent. The hotel lost at least $18 million in 2020 and is projected to lose at least another $20 million in 2021, according to the hotel owner.

Singer said he is optimistic that the hotel's secured lender will work cooperatively to ensure the hotel comes back stronger after its reorganization and as the region and the nation come out of the pandemic.

When the hotel reopens in mid-2021, ownership expects it will have a new manager and brand; one with the ability and willingness to infuse tens of millions of dollars of capital into the hotel and its operations, and a robust pipeline of future convention business for the hotel.

The impacts of the pandemic have been significant, Singer said. “The owner is committed to a process that will ensure the hotel's long-term viability and drive business both to the hotel and to San Jose's important downtown and convention center,” he added.

The hotel is a landmark 805-room property at 170 South Market St. The 20-story, two-tower hotel has 65,000 square feet of state-of-the-art meeting and event space, three restaurants with bars, a cafe bakery, a fitness center, and a rooftop pool and gazebo.  The hotel features grand ballrooms for large conferences and conventions as well as intimate spaces for smaller gatherings.

51 Comments

  1. Not to worry San Jose…

    President Biden, the dementia poster-boy in chief- will fill up the Fairmont in “No” time with the masses of invading illegal aliens he is letting into our country.

    If not, the usual crowd of communists at city hall will fill up the Fairmont with; vagrants, unemployed Hookers, child molesters, Grandma rapists and to relieve the overcrowding in Hell; some really nasty, foul tempered demons.

    David S. Wall

  2. David,

    Well, you are nothing but a well of insults and diversion.

    The fact is that it is said that it is filing, but Chapter 11 is a tool to “reorganize”. However it does leave all the WORKERS out of luck because they get pennies on the dollar for their work.

    In reality Chapter 11 has been an escape route for those who cannot manage their business so they can skirt obligations and limit their personal liability.

    I know I have 2 business degrees.

    The third paragraph is so vile, I just cannot believe it, classic Qanon belief.

  3. Oh come on Goldilocks, Chapter 11 is a tool of smart ass lawyers to screw everyone out of money owed, except the lawyers.
    Why do you Commi’s keep calling us Qanon, what is that a coed word for “queer nation” .
    Your pretty vile yourself Goldberg.
    Uncle Joe has already announced his plan to get undocumented Democrat’s out of shipping containers is to fill up hotels with them.
    Weren’t you watching CNN?

  4. “Closes for now”

    It wouldn’t be surprising if the hotel were sold again, including to a DEVELOPER.

    Otherwise it re-opens some time later, at higher rates, probably. Given what has happened since 2008 and now with much more federal spending and its being the talk of the nation (as those in DC try to dispel it), inflation can be “blamed” for the increase in rates.

  5. M.T.GUNN you wrote:

    “Oh come on Goldilocks, Chapter 11 is a tool of smart ass lawyers to screw everyone out of money owed, except the lawyers.”

    To express due respect to you, which I know you never return, YES this is a very accurate observation givern the trend of the use of Chapter 11 But then you said:

    “Why do you Commi’s keep calling us Qanon, what is that a coed word for “queer nation” .”

    You and Sj Kulak, and many others just love to use the RED SCARE mdel of debate without even discussing the topic. This does not WIN debates, it just is pointless distraction You wrote:

    “Your pretty vile yourself Goldberg.”

    Please compare to this language:

    “If not, the usual crowd of communists at city hall will fill up the Fairmont with; VAGRANTS, UNEMPLOYED HOOKERS, CHILD MOLESTERS, GRANDMA RAPISTS AND TO RELIEVE THE OVERCROWDING IN HELL; SOME REALLY NASTY, FOUL TEMPERED DEMONS.”

    Need I say, compare and contrast? You are just saying that if we don’t agree with you we are “VILE”, and that not only is so actually not correct, but us the falsest form of argument I can demonstrate you wrote:

    “Uncle Joe has already announced his plan to get undocumented Democrat’s out of shipping containers is to fill up hotels with them.”

    Wait, if they are “undocumented” they CANNOT be DEMOCRATS, because they ARE NOT VOTERS. And what about the UNDOCUMENTED REPUBLICANS? Probability is that at least 30% of these UNDOCUMENTED people are REPUBLICANS, right? This pointless flawed logic just needs to stop.

  6. Goldstein,

    I’m glad you know that you have two business degrees. I remember my business ethics textbook. It was the thinnest textbook I had to buy. Two business degrees is rather unimpressive. Chapter 11 has saved countless small businesses. All businesses, small and large, like life itself, is fragile.

    I generally like Wall’s and MT Gunn’s comments. They reek of real life experience.

    I remember attending some swanky holiday top accounting firm parties at the Fairmont in the late 1980s. I wish them a successful comeback.

  7. Mr Gunn,

    Exactly. Bankruptcy is a savvy play to make lenders take a hair cut, the feelings of the resentocult not withstanding. Actually its genius because the envy class gets a nice dopamine hit of schadenfreude, even its a placebo, and think theyre winning.

  8. SJ KULAK you wrote:

    “Exactly. Bankruptcy is a savvy play to make lenders take a hair cut, the feelings of the resentocult not withstanding.”

    Wait a second, there is other costs here. First the bankruptee will probably wind up with a FICA score of less than 500. Meaning if they are going to get ANY credit, it will be the most expensive interest rate and down payment requirements. Or they may wind up being a money launderer for a criminal enterprise. Oh wait, isn’t this what Donald Trump is confronting because of his taxes being investigated? Yes, the “source” of his loan underwriting will be subject to search, and if it turns out it is “dark money” he may wind up being charged with being a member of a criminal enterprise? You wrote:

    “Actually its genius because the envy class gets a nice dopamine hit of schadenfreude, even its a placebo, and think theyre winning.”

    There are no winners here, EVERYONE loses when you have poor management, attempts to falsfify values like real estate as proven by their own pe3er group acknowledgement, and the use of dark money to launder it in the practice of either renting or selling homes.

    The INVESTOR loses because they got SCAMMED.

    The BUYER loses because they OVERSPEND.

    The REAL ESTATE agent eventually loses because their reputation will be damaged when the INTERNET shares the stories of their actions.

    The LENDER loses because they were SCAMMED.

    The COMMUNITY lose when the market corrections hit, and property taxes are forced down because the assessed values will EVENTUALLY have to be adjusted.

    No winners here, ALL LOSERS.

    And we have people like yourself constantly name calling and saying to us “take it, that’s life”.

  9. STEVEN GOLDSTEIN:

    Thank you. Each comment you write proves that reason, intelligence, and true honorable debate are not dead. Your comments give me hope. Thank you so much.

  10. David S. Wall,
    Totally agree.
    Fill it to the brim with the human life forms scoured from the banks of Guadalupe Creek and from under the overpasses.
    Rename it Tweaker Towers.

  11. Ms. Jill

    Let’s see Mr. Trump files for bankruptcy and wins the Presidency, Ms. Carrasco files for bankruptcy and gets a council seat. Seems like the world looks to those that try and fail with as much respect as those that try and succeed. Its the ones that sit around and point out how dumb everyone else for trying something in place of actually trying something for themselves that world passes by.

    Cities file for bankruptcy, companies do, and so do people. It is a savvy move and the banks never really lent real money anyway it is all fraction reserve lending. Attaching morality to filing bankruptcy misses the point of the entire system, making a mistakes is not a sin and if everyone in the world was afraid of making mistakes, we’d still be living in grass huts.

  12. SJ KULAK you wrote:

    “Let’s see Mr. Trump files for bankruptcy and wins the Presidency, Ms. Carrasco files for bankruptcy and gets a council seat. Seems like the world looks to those that try and fail with as much respect as those that try and succeed. Its the ones that sit around and point out how dumb everyone else for trying something in place of actually trying something for themselves that world passes by.”

    Yes, and when they SUCCEED, and they establish a stable reliable company they are WINNERS, they deserve some credit and respect. But then you wrote:

    “Cities file for bankruptcy, companies do, and so do people. It is a savvy move and the banks never really lent real money anyway it is all fraction reserve lending. Attaching morality to filing bankruptcy misses the point of the entire system, making a mistakes is not a sin and if everyone in the world was afraid of making mistakes, we’d still be living in grass huts.”

    When you and your friends make the mistakes, you deserve equal treatment. You going into bankruptcy is a FAILURE. Thant FAILURE makes you a LOSER, and you do not deserve any special treatment.

    Just watch 60 Minutes showing that this Pandemic Depression is so unfair it can’t be measured. The facts are NO ONE who DOES NOT have a safe way of managing a situation like this is also a FAILURE. You and your friends COST the public so much in both money and security. You should all eventually pay the price for your lack of vision.

  13. This town needs a family to come and take care of this house, no one getting rich off real estate there:

    https://www.zillow.com/homedetails/39-Caspian-Ave-Caspian-MI-49915/2073825456_zpid/

    Above average High School, monthly costs are ~$150 if you put $5000 down. MHH Income about $25000. ES, MS, and HS about 1.4 miles away. 12% of families below the poverty line.

    A town with true four seasons.

    Head over here to get some work done and a caffeine hit:

    https://contrastcoffee.com/iron-river-menu/

    Bring the kids here when they get an A for some pancakes:

    https://goo.gl/maps/u9rpkUi7NL2qu2878

    Just north of a 1.5M acre nation park, area has more lakes than people probably.

    https://en.wikipedia.org/wiki/Chequamegon%E2%80%93Nicolet_National_Forest

    This place runs through town:

    https://goo.gl/maps/roU2h1n7TFZD4kYW8

    The kids could head out on bikes and not come home till 10PM, like when I grew up.

    But why not complain about the Fairmont and the deep inherent injustices of bankruptcy law instead while you make your boss and landlord rich working your life away and your kids stuck in school system that gives zero Fs – literally, seems like more wise way to live your life.

  14. Seems like the world looks to those that try and fail with as much respect as those that try and succeed. Its the ones that sit around and point out how dumb everyone else for trying something in place of actually trying something for themselves that world passes by. — SJ Kulak

    Is there a difference between a company, guilty of poor decision-making and/or external adversity, seeking to reorganize under Chapter 11, and an alcoholic, guilty of poor self-control and/or external adversity, seeking to regain his life through treatment? In both cases society demonstrates its belief, perhaps based upon religious tenets, in forgiveness and rehabilitation, despite the near certainty of harm having been done to others.

    It seems to me that the loudest voices condemning companies filing under Chapter 11 are also loudest in calling for increased treatment, compassion, and support of substance abusers. Given that society stands to benefit from the success of both in their return to productivity, the disparate reaction suggests a mindless entanglement of the moral and political, perhaps best epitomized by the quote below (contributed by Steven Goldstein).

    “You going into bankruptcy is a FAILURE. Thant FAILURE makes you a LOSER, and you do not deserve any special treatment.”

  15. PHU TAN ELLI you wrote:

    “Is there a difference between a company, guilty of poor decision-making and/or external adversity, seeking to reorganize under Chapter 11, and an alcoholic, guilty of poor self-control and/or external adversity, seeking to regain his life through treatment?”

    YES there is a VERY big difference, the PUBLIC COST of loss of employment and the failure to pay obligations you LOBBY to get for INCENTIVIZING you business with local governments. BIG Difference, the rest is just trying to be another false comparison and distraction. You wrote:

    “In both cases society demonstrates its belief, perhaps based upon religious tenets, in forgiveness and rehabilitation, despite the near certainty of harm having been done to others.”

    That is a RELIGIOUS idea, but NOT a PRACTICAL one. You can forgive them personally, but the COST still must be paid, without PAYING the price there is no redemption. You wrote:

    “It seems to me that the loudest voices condemning companies filing under Chapter 11 are also loudest in calling for increased treatment, compassion, and support of substance abusers.”

    And you are calling the chronic compulsion of making false promises to open up businesses that fail the same as the concept of a “substance addiction”? Simply put, that is a crazy idea. In fact, it can be described as sociopathic because you simply disregard the responsibility of damage to society by REWARDING such compulsive behavior. The BOUNDARIES must be set and those who are chronic abusers of the system cannot be allowed to continue. You wrote:

    “Given that society stands to benefit from the success of both in their return to productivity, the disparate reaction suggests a mindless entanglement of the moral and political, perhaps best epitomized by the quote below (contributed by Steven Goldstein).”

    Again, your false comparison in this case is totally unrealistic. Public POLICY cannot and should not perpetuate the compulsion of making false promises where one cannot MANAGE their business successfully. This is BUSINESS, not RELIGION and BUSINESS cannot forgive MISMANAGEMENT. It is also the SEPERATION of CHURCH and STATE.

  16. SJ Kulak,

    This discussion is not a platform for your ADVERTISING, right?

    In any case, when you are asked to address your counterpoints you choose to avoid it. That is your right, but it also demonstrates that you have to coin a phrase “painted yourself into a corner”.

  17. Coming in under just 2000 in population McAuthur looks to be a town looking for new life only a family can bring. This half acre lot home is backed up against State of Ohio property and while could us a bit of elbow grease to give that homely touch, can’t beat an estimates $184 in monthly costs in a town with a $26000 MHH Income. This town could really use someone to come in and make this a home.

    https://www.zillow.com/homedetails/107-Linden-Ln-Mc-Arthur-OH-45651/2075628869_zpid/

    Even at minimum wage of $8.80 working full time single income household, you are looking at rough housing burden of 10%. Of course, if your housing costs are $184 a month with a 30 fixed loan, why not just work a 100 hours a month and see more of your kids? More income just means more taxes and less kid time.

    Grab a decent cup of joe at

    https://www.yelp.com/biz/the-spot-on-main-jackson-2?osq=Coffee+%26+Tea

    Nice State Park nearby

    https://goo.gl/maps/E4wHUeS2xGPbBmPRA

    Seems like all it would take is to throw a dart at a map of United States and find a far better place to raise kids than the Bay Area.

    Why is this so hard for so many people?

  18. SJ Kulak,

    Why is it so hard for you to understand, you cannot “kick out” the people you do not want living here?

    To me this is just you saying “I AM THE LORD OF SILICON VALLEY” and it is “Time for YOU people to go away!”

    I think these people are right at DEMANDING the market to change, and it is perfectly normal “market” action. It is NOT unnatural.

    So stop trying to make everyone look like a “COMMIE” and stop insulting your customers. Time for you to adjust to the new “NORMAL”. The quicker you do the better your business will be.

  19. SG, in response to your 10:12 am post.

    Any employment lost would be employment created by the hotel, and losses following Chapter 11 reorganization would be expected to be considerably less than the 100% loss if the hotel closed permanently.

    If you don’t think it can be practical to forgive debts in the interest of future productivity then you best stay clear of 20th century history, during which the International Money Fund forgave billions of Third World debt and the US billions in Allied and Axis debt.

    The “chronic compulsions” and “false promises” you attribute to corporations are also classic behaviors of substance abusers, the only difference being that virtually all substance abusers are guilty of committing such transgressions (compared with relatively few corporations). You accuse me of making false comparisons and then turn around and provide supporting language. Thank you.

    Also, given that the SJ Fairmont has been in business for 34 years, your insinuation that the incentives the city used to entice its construction played any part in its current survival strategy seems delusional, to say the least.

  20. PHU TAN ELLI you wrote:

    “Any employment lost would be employment created by the hotel, and losses following Chapter 11 reorganization would be expected to be considerably less than the 100% loss if the hotel closed permanently.”

    That still doesn’t justify putting the cost of a FAIL:URE on ANYONE else but the LOSER that caused it. Maybe there should be reform of the bankruptcy code so that it is HARDER to simply run away from ones own business failures. You wrote:

    “If you don’t think it can be practical to forgive debts in the interest of future productivity then you best stay clear of 20th century history, during which the International Money Fund forgave billions of Third World debt and the US billions in Allied and Axis debt.”

    First, that World War debt was done because if it wasn’t there would have easily within another 30 years another World War. The IMF even though sounds noble, is just another way of offshoring slavery by the U.S. Corporations, and history proves it. I say lets get rid of it and all other ways the IRS gives money away to enslave out of country workers. Another great loss of the public due to CORPORATE corruption of government. You wrote:

    “The “chronic compulsions” and “false promises” you attribute to corporations are also classic behaviors of substance abusers, the only difference being that virtually all substance abusers are guilty of committing such transgressions (compared with relatively few corporations). You accuse me of making false comparisons and then turn around and provide supporting language. Thank you.”

    REALLY, when Donald Trump has used bankruptcy to get out of debts 4 times? Actually, there is if you bother to do some homework, a LOT of chronic abusers of bankruptcy. You can pull up the records from the bankruptcy courts. No, this kind or “ENABLING” by the government must be stopped. Just like the idea that in my book, you need to “CONTROL” and “DISABLE” substance abusers from using them. No problem for me. You wrote:

    “Also, given that the SJ Fairmont has been in business for 34 years, your insinuation that the incentives the city used to entice its construction played any part in its current survival strategy seems delusional, to say the least.”

    Given that this LUXURY hotel, not just a Motel 6, could not manage itself is in my view like a casino failing. How much money was the NHL paying per year? In fact, most of the “TECH” companies probably had rooms set aside on contract. SOMETHING really was not managed well there, and so be it, that the management should not be REWARDED for failure.

  21. The historic town of Rockport situate on the western shore of the mighty Ohio River has five solid homes for under $82000. Now is a great opportunity to buy this diamond in the rough and with a little hard work and a $5000 down payment, you could join the ranks of home ownership.

    Above average middle and high schools await your children along with a chance to attend Perdue or some other University of Indiana University at state resident rates. Restaurants aplenty in nearby Owensville and Evansville.

    https://www.zillow.com/homedetails/716-North-St-Rockport-IN-47635/85711520_zpid/

    Buy three and live in one, in 10-15 years you can retire and your tenants will be grateful for the chance to live and work in such a great place.

  22. SJ Kulak,

    You say you are not a Real Estate Agent?

    WOW, I can’t wait until ALL “low wage” earners leave, then the wealthy will be stuck at home, have to buy their own dry cleaning washers and do all of their own housework.

    Your answer is only going to make more people leave, even the Wealthy ones.

    When is SJI going to put a stop to this “FREE ADVERTISING”?

  23. Steven Goldstein,
    You’re trending in the wrong direction. I think it’s time for you to schedule another comment from “Jill”.

  24. Well, it looks like Donald Trump is about to let the really ugly cat out of the bag.

    Look at this report “NYC prosecutors’ probe into Trump finances expands to include millions loaned for Chicago skyscraper” (https://www.cnn.com/2021/03/08/politics/trump-chicago-subpoena/index.html)

    here is the information so far:

    “Prosecutors are examining whether the company misled lenders or insurance brokers about valuations for certain properties. They are also investigating fees paid to consultants and a conservation easement taken on a New York family estate called Seven Springs.

    Their interest in Fortress relates to a $130 million loan the company made to the Trump Organization for the construction of a luxury hotel and condo tower in Chicago.

    By 2012, Fortress subsequently forgave more $100 million of the loan, which, including interest and fees, was worth about $150 million, according to court filings. The forgiveness was done to secure a partial re-payment of about $45 million at a time when the real estate market was suffering from the financial crisis.

    Prosecutors with Manhattan District Attorney Cy Vance’s office are looking into whether Trump and the Trump Organization recorded the loan forgiveness as income, as required by the Internal Revenue Service, and paid the appropriate taxes, the people say.

    Fortress has not been accused of any wrongdoing. Representatives for Fortress and the Manhattan district attorney’s office declined to comment.

    The Trump Organization did not respond to a request for comment.

    Alan Garten, the general counsel for the Trump Organization, declined to comment. He previously told The New York Times in October that the company and Trump appropriately accounted for and paid all taxes on forgiven debts.

    New York Attorney General Letitia James first raised questions about Trump’s handling of the Fortress loan last fall when her office disclosed in a court filing that it was investigating whether Trump and the Trump Organization recorded the forgiven amount as income and paid taxes or whether there was some explanation as to why that wouldn’t be required.

    The attorney general’s office said at the time that information about the transactions was “significant” to its civil investigation.

    The New York Times, which obtained Trump’s taxes, said the forgiven debts showed up in Trump’s tax returns as cancelled debts. The Times wrote that Trump took advantage of a law enacted after the 2008 financial crisis that allowed companies to spread out income from cancelled debts over several years.

    Prosecutor’s interest in Trump’s handling of the Fortress loan forgiveness comes as the district attorney’s office has begun digging into Trump’s tax returns and other records it received from Mazars, Trump’s long-time accountant.

    In addition to tax returns, investigators obtained financial statements and work papers that may shed light on the decision-making process behind the treatment of the cancelled debt. It could also reveal any internal debate and discussion that could help prosecutors determine the intent behind any conclusions they reached.”

    The real issue has been how dirty is the money being used to “loans” in this situation? I really hope this will eventually result in a MAJOR reform so that this crooked practice is eliminated. Most likely the properties will suffer a significant drop in values.

  25. PART I: The Rise and Fall and the Rise and Fall of the San Jose Fairmont

    There is a good deal of essential background to the Fairmont story that has been overlooked and under reported by all local media, including this Bay City News piece. The following provides a fuller version of the historical record and can help to better ground the discussion regarding the significance of the announced Fairmont bankruptcy.

    A Fairmont San Jose Timeline

    1985-1987: The Rise…
    In 1985 the former San Jose Redevelopment Agency (RDA)—controlled by the San Jose City Council (https://www.sanjoseca.gov/home/showpublisheddocument?id=11319)–reached an agreement for the construction and operation of a hotel with two private developers: a) the Swig, Weiler and Dinner Development Company, a privately-owned and San Francisco-based real estate company whose chairman, Melvin Swig, and heir to the Fairmont Hotel chain (https://en.wikipedia.org/wiki/Melvin_Swig) and b) Kimball Small Properties, a San Jose-based property development company with significant experience in downtown San Jose (https://www.legacy.com/obituaries/mercurynews/ obituary. aspx?n=kimball-west-small&pid=194189273&fhid=11022; https://sanjosespotlight.com/ pioneering-downtown-san-jose-developer-kimball-small-dies/). At the time, and for many years after, the Fairmont development, along with the McEnery Convention Center, were seen by city officials as the fundamental bases for revitalizing San Jose’s downtown (https://www.spur.org/publications/urbanist-article/2013-04-04/shaping-downtown-san-jose; https://www.cp-dr.com/articles/node-1303; http://www.metroactive.com/ papers/metro/10.09.97/montgomery-9741.html).

    Total construction costs for the original Fairmont Hotel towers, completed in late 1987, was $140 million, financed mostly through a $100 million loan arranged by the two developers. In addition, the RDA provided $38 million taxpayer dollars in subsidies toward original construction costs, as well as for ground floor retail operations during the hotel’s first decade of operation (https://www.spur.org/ publications/urbanist-article/2013-04-04/shaping-downtown-san-jose; http://www.metroactive.com/papers/metro /10.09.97/montgomery-9741.html).

    1987-1996: …and The Fall…
    For most of its first decade in business the Fairmont lost millions although, because it was held privately by the Swig family, exactly how many millions is not known. At its low point in 1991, the Fairmont property was valued at $61.5 million on the Santa Clara County Assessor’s rolls, suggesting significantly diminished valuation. In 1995, the Swig family decided to sell its controlling interest to Los Angeles-based real estate developer Maritz, Wolff and Company (represented by Lew Wolff) and partnered with Saudi Arabian investor Prince Alwaleed bin Talal.

    The new investors purchased the property in 1996 for $36.7 million at a time of rebounding hotel revenues, about one-quarter of the costs for developing the Fairmont property up to that point. The conditions of the sale included debt forgiveness from private banks and the RDA selling the new owners the land beneath the Fairmont towers for $3 million plus 16% of hotel profits after Wolff and Alwaleed bin Talal recouped their initial $36.7 million purchase price (https://www.bizjournals.com/sanjose/stories/1997/11/17/focus1.html; https://www.bizjournals.com/sanjose/news/2021/03/05/the-fairmont-san-jose-files-bankruptcy-downtown.html; https://www.mercurynews.com/2007/10/06/san-joses-gamble-on-fairmont-hotel-wins-praise-20-years-later/).

    1997-2018: …and The Rise…
    The Wolff-Alwaleed bin Talal partnership, with City support, added the 14-story Annex, completed in 2002 at a cost of $77.9 million, increasing hotel capacity from 535 to 805 rooms. The RDA provided an additional $9.5 million in subsidies for the addition in exchange for 16% of hotel profits after owners recouped their construction investment costs (https://www.emporis.com/buildings/ 118580/fairmont-hotel-san-jose-ca-usa; https://www.emporis.com/buildings/135246/ fairmont-hotel-annex-san-jose-ca-usa; https://www.mercurynews.com/2007/10/06/san-joses-gamble-on-fairmont-hotel-wins-praise-20-years-later/). The expanded hotel, therefore, initially cost the Wolff and Alwaleed bin Talal less than $112 million, a hotel they owned, operated, renovated and from which they profited for some 21 years.

    In early 2018, SJ SC Holdings, an investment group controlled by San Ramon-based Eagle Canyon Capital, whose primary executive is Sam Hirbod, paid $223.5 million for the Fairmont in addition to assuming as much as $16 million in debts on the property. At the time of sale, the hotel was officially assessed by the county at $123 million (https://www.hotel-online.com/press_releases/release/san-joses-iconic-fairmont-hotel-has-traded-hands-for-223-5-million/; https://www.mercurynews.com/ 2019/09/16/fairmont-hotel-in-downtown-san-jose-plans-wide-ranging-lobby-ground-floor-renovations/). Thus, the Wolff-led investment group profited from two decades of robust hotel operations and sold the property for about twice as much as they initially invested in it.

    2019-2021: …and the Fall…
    In 2019 SJ SC Holdings undertakes a significant, $10 million renovation of the Fairmont Hotel entry, lobby and ground floor restaurants, lounges, bars and amenities. The onset of the COVID-19 crisis in early 2020 resulted in a sharp decline in hotel stays nationwide and locally with the Fairmont incurring $18 million in losses for 2020 as a whole. Losses in 2021 are expected to be another $20 million. The ownership group of the hotel closed its doors and filed for Chapter 11 (reorganization) bankruptcy on March 5, 2021 seeking an extension of its mortgage debt and infusions of new money and new ideas from hospitality investors (https://www.mercurynews.com/2019/09/16/fairmont-hotel-in-downtown-san-jose-plans-wide-ranging-lobby-ground-floor-renovations/; https://www.bizjournals.com/sanjose/news/2021/03/05/the-fairmont-san-jose-files-bankruptcy-downtown.html).

  26. Econoclast,

    OMG you did great homework. But what is striking is your homework disclosed how much PUBLIC money wound up going into the pockest of the Private developers. And that for the most part it ws not very successful as a business from the start.

    And that for some crazy reason, the Cioty and County kept paying the price for the failures of management. As a person with 2 Business Degrees I would never have continued to use public money for it. That was lost money given that most people using it just visited and were not members of the traditional customer base. It was a LUXURY hotel, with high income pricing, right?

    Time for REAL REFORM, lets never let public money EVER be used to in effect support a private FOR PROFIT business. It makes you wonder how many BILLIONS of dollars were lost in taxes or spent to in effect use the PUBLIC money to seed the PRIVATE businesses here in the bay area.

    The concept of the “Public/Private” cooperative model is really just a con job where the redistribution of wealth becomes rob from the poor and give to the rich. Again NO MORE. And again, I am a person that does believe in capitalisms, and the markets, and in disciplined business practices. But what we have here is nothing but a rip off of the public, and no discipline or intelligent business management.

    Let these groups use only private venture capital or investors, and if they fail, let them pay the price for the failure, but not the taxpayers

    WE MUST STOP TRYING THE SAME THING OVER AND OVER AGAIN EXPECTING A BETTER RESULT

  27. “As a person with 2 Business Degrees I would never have continued to use public money for it.” — Steven Goldstein

    I presented Mr. Goldtein’s analysis to two acquaintances, one of whom has three business degrees and lives in a homeless shelter, the other, who has only one degree, the owner of a thriving business. The former, known around town as Rusty, adamantly agreed with Mr. Goldstein, while the latter judged it to be lunacy.

    Until I find a stable person who possesses four or more business degrees it looks like a clear win for Mr. Goldstein, five degrees to one.

  28. PHU TAN ELLI you wrote:

    “I presented Mr. Goldtein’s analysis to two acquaintances, one of whom has three business degrees and lives in a homeless shelter”

    Please provide a name, the degrees, and the school. We have no idea if it is legitimate, or also if the person happened to either suffer a serious illness or worse perhaps a mental disorder like paranoid schizophrenia. The bottom line is that this comment has no context, and in fact does disrespect to your “acquaintance” You wrote:

    “the other, who has only one degree, the owner of a thriving business. The former, known around town as Rusty, adamantly agreed with Mr. Goldstein, while the latter judged it to be lunacy.”

    Again, please provide the name of the oner that has a “thriving” business, the degrees he has and the school he went to?

    I already provided my information, so you appear to be just making up a story to justify a personal attack, NAME CALLING all over again. You wrote:

    “Until I find a stable person who possesses four or more business degrees it looks like a clear win for Mr. Goldstein, five degrees to one.”

    WOW! It looks like to you only people that agree with you are “stable”? Again, my argument is clear. The public funds MUST NEVER be used to support a FAILING business, right?

    This is WHY we should not allow any ANONYMOUS postings on webpages like this. There should be methods that require AUTHENTICATION of a person’s identity PRIOR to granting them the privilege to post. Otherwise, you have people just making up stories to justify their conclusions. And in this case NAME CALLING instead of actually providing evidence to disprove my comment.

  29. WORK90

    This is the GAME that many so called “entrepreneurs” play.

    They NEVER use their OWN money. They use funds from the OPM account.

    Other People’s Money

    Then they say, if they get lucky to complete the sentence “Fake It until you Make It”

    But what is the rate of getting to the point of “Making It”

    This is the TOXIC side of Capitalism. Many actually only want to get the VC and maybe get to the point of IPO just so that where the business fails, they ran away with money they manage to skim off.

    But

    They never get anything MADE.

    Solyndra is a good example, so is ENRON, WORLDCOM, THERANOS, and you see my point.

    At least Apple actually got something to market and it worked and did it right. But it did get into trouble when the systems got outperformed by others.

    Something to think about, right?

  30. PART II: What’s “Our” Cut of the Deal?

    As noted in PART I, through the San Jose Redevelopment Agency (RDA), San Jose residents subsidized at least 27% of the initial construction and operating costs of the privately-owned Fairmont Hotel during 1985-1995. Public funds also subsidized about 12% of the construction costs of the hotel Annex completed in 2002. In total, the City underwrote private accumulations of wealth with at least $47.5 million in direct taxpayer subsidies and was forced to sell a public parcel asset in the process. The City did retain ownership of the underground garage and the leasehold improvements on retail shops on the ground floor of the Fairmont Annex (collectively assessed at $5.7 million in 2010 https://www.sanjoseca.gov/home /showpublisheddocument?id=11319).

    RDA subsidies were conditioned on future distributions of hotel profits after initial private investments were recouped by the first two sets of owners. Such distributions only started flowing to the City in 2001, some 16 years after entering into the agreement with the initial investors/developers (Swig and Small). In the first 6 years of profit distributions, the City received a total of $4.2 million, about $700,000 per year, according to the RDA. In addition, income from the garage and retail space leases summed to about $1.8 or about $300,000 per year (https://www.mercurynews.com /2007/10/06/san-joses-gamble-on-fairmont-hotel-wins-praise-20-years-later/). That’s about $1 million per year in annual profit-sharing returns to the City during 2001-2007 or about $7 million in total.

    The RDA was disbanded in 2011 and data on any continuation of the profit-sharing arrangements could not be found. If we assume they did continue through 2019, the City would have collected an additional $12 million for a total of about $19 million (keeping in mind that the period after 2001 were characterized by good years as well as the very bad years of the Great Recession (2008-2011) during which the hotel industry was devastated (https://www.costar.com/article/619312263)).

    It therefore appears that the City’s subsidies of about $47.5 million over a 17-year period through 2002 were “rewarded” with about $19 million in dividends during the 19-year period 2001-2019, less than half the initial “investment.” Meanwhile, builder Kimball Small and his associates and the Lew Wolff and Alwaleed bin Talal partnership and their associates walked away with tens of millions in profits, underwritten by San Jose taxpayers. (Revenues from property taxes and from hotel room taxes are not included as “dividends” for the City as these would accrue regardless of any subsidization agreements with hotels or other businesses.)

    The meager returns to the City for its considerable contributions are, in reality, the dividends earned by private businesses from their cozy relationships with City officials over the years and, in this case, starting with former Mayor Thomas McEnery. More proof that investments in grooming and enabling pliable politicians usually pays off (https://sanjosespotlight.com/santa-clara-county-bracing-for-bruising-budget-decisions-next-year/#comment-31307), usually even more than investments in business assets and enterprises.

  31. Solyndra …

    The valley and lower Peninsula are full of boom town rats, digging for gold, with governments getting into the game for various (often self-serving) reasons. While a growth-choked center of the industry has its problems, think of other places that are in decline and especially suckered with false hope. Add corruption, too, and remember, so many Californians are fluffy compared to these eastern players.

    (Included is the Syracuse example featuring local company Soraa. And as with Buffalo, ask yourself if you could trust Sacramento and local politicians with any scheme to boost development in the Central Valley and elsewhere outside the major metros. At least Soraa’s successor, also local, has stuck around a while.)

    https://nypost.com/2018/07/13/cuomos-buffalo-billion-was-beyond-corrupt/

    https://www.investigativepost.org/2020/08/23/buffalo-billion-audit-shock-and-ugh/

    https://www.syracuse.com/business-news/2018/01/ny_taxpayers_built_90m_factory_in_dewitt_for_firm_that_walked_away_didnt_create.html

    https://www.syracuse.com/galleries/IQ7RMKKP2JE6PCHIAZHUUBDAIA/

  32. There is only one solution to prevent this insanity.

    In order for any “business” to get any “gifts” or “incentives” they MUST provide an up front account of the same money into an escrow account WITH interest. This account must be JOINT owned so that extraction must require consent by both parties, except if the private party is bankrupt or decides to drop out, the public entity retains ALL power over the account

    What does this do?

    It means that upon failure of any “project” or “proposal” or any “pullout” by the company the City, County, State has the money to replace the money lost.

    Thus the community cannot LOSE their shirt on the false promises of any business.

    ABOUT TIME THIS WAS DONE RIGHT?

  33. WORK90,

    Only if they are accompanied with the proper ESCROW account. Because the “incentives” end up being skimmed into the pockets of the developer/owner groups, which either mismanage their business to such a degree that they don’t turn the profits required to return the value of the “incentive”

    This has been an abused system since the 1970s in CA and also perhaps in the Country.

    Having said “reserve” insurance on the public “incentive” must be created from NOW ON.

    No more promises that can easily be broken. RIGHT?

  34. Dear Steven Goldstein:

    You keep harping that business people who didn’t have insurance are “losers“ because they didn’t adequately plan. To follow your logic, shouldn’t all the people who have been laid off be classified as losers as well? Shouldn’t they have had cash reserves and food stored in case of an emergency? Shouldn’t they have hired financial planners with gobs of degrees to advise them? Are all the workers who lost their jobs losers as well because they failed to plan?

  35. HB you wrote:

    “You keep harping that business people who didn’t have insurance are “losers“ because they didn’t adequately plan. To follow your logic, shouldn’t all the people who have been laid off be classified as losers as well?”

    The answer is NO, WHY?

    Because they were in fact EXPLOITED by being constantly underpaid. They are just EMPLOYEES, they aren’t “INVESTORS”. The reality is that when a person “owns” their OWN business, they explicitly are taking responsibility of the business decisions of that company. In effect an employee is not a business. You wrote:

    “Shouldn’t they have had cash reserves and food stored in case of an emergency? Shouldn’t they have hired financial planners with gobs of degrees to advise them? Are all the workers who lost their jobs losers as well because they failed to plan?,”

    NO the workers are not the “LOSER” because they worked and got paid because they did their jobs. Their “BOSSES” are the LOSERS for making a work contract, and terminating it because of NO FAULT OF THE EMPLOYEE! RIGHT?

    At least this is why there is so much being done regarding extensions and enhancements of the “UNEMPLOYMENT INSURANCE”.

    Remember these people “laid off” are or “fired” are not being laid off or fired for cause. They did their jobs and were not fired because of “incompetence”, or “failure to perform”, or even “misconduct”. This is simply not an appropriate comparison. The fact is they lost their jobs because their “BOSSES” made terrible business decisions including NOT HAVING A BUSINESS INTERRUPTION CONTINGENCY PLAN.

    You again are trying to just be distracting from the responsibility of a “BUSINESS OWNER”.

  36. PART III: Alternate Pasts
    In the mid-1980s, housing affordability in San Jose and the region was already a problem (https://www.mercurynews.com/?returnUrl=https%3A%2F%2Fwww.mercurynews.com% 2F2018%2F09%2F06%2Fsan-jose-tops-list-for-least-affordable-housing-in-u-s%2F%3FclearUserState%3Dtrue). When the Fairmont project was initiated in 1985, and for nearly a decade after it was completed, the City’s Redevelopment Agency (RDA) owned the land beneath the hotel (see Part I above). As a condition of the sale of the financially-stressed hotel to its second set of owners/investors in 1996, the RDA sold that land to the new investors for $3 million plus a one-sixth share of hotel profits (see PART I above). The city could have used its land assets and the upwards of $50 million in public revenues it ultimately gave to private hotel investors to build city-owned, affordable.

    For contextual and comparative purposes, consider the three-tower Campus Village project was completed in 2005 on the San Jose State University (SJSU) campus at a cost of about $205,000,000. That complex houses about 2,320 people yielding an average cost of $88,362 per living space in 2005 (https://www2.calstate.edu/csu-system/transparency-accountability/audit-reports/Documents/construction/2006/ConstructionSanJoseCampusVillage.pdf; https://www.housing.sjsu.edu/docs/HousingBrochure_2020.pdf).

    In 2019, the per person monthly rental fee in that Campus Village complex was about $1,200 inclusive of off-street parking, furniture, kitchen appliances, all basic utilities (including wi-fi internet and internet-based TV) and access to common areas and amenities and services within short walking distances (see PART I). That comes to about $14,400 per year or about one-sixth of the construction costs of the average living space in the Campus Village complex. In about six years, plus or minus, SJSU could basically recoup its initial outlays in the original housing, excluding inflation, maintenance and upkeep.

    In the same way that the city and SJSU entered into a joint agreement to build and operate the Martin Luther King, Jr. Library in the mid-1990s (https://www.sjlibrary.org/), the city could have contracted with SJSU to build and manage housing units similar in quality, efficiency and convenience as those on campus in the mid-1980s. Construction costs were much lower in the mid-1980s when the Fairmont project was initiated. A generous estimate of the construction cost of a living space like those built for the SJSU community would be $80,000 in those days. Thus, a $50 million investment on city-owned land back then could have produced more than 600 quality living spaces for both students and non-students with ample amenities and conveniences. With steeply rising land values and rents over the subsequent decades, leasing such units even at a 25% discount relative to the market rates would have produced a steady stream of revenues to recoup costs, maintain and improve the housing and amenities and to generate surpluses to expand such housing outside the orbit of money-grubbing, profit-seeking real estate operators and landlords.

  37. HB you wrote:

    “Steven, I guess that we will just have to disagree on this one.”

    ARE you really saying that your employees DESERVED to be fired because of the business owners’ mistakes? REALLY?

    Actually, your approach is that there should be NO MORE EMPLOYEES. You want everyone to be a “contractor”. Thus, they then become a “business”. But that is not possible, because a contractor must be allowed to in fact work for multiple businesses, and even worse work for your competition after their contract ends.

    And since the contractor OWNS any intellectual property that is acquired, they can use that knowledge against you.

    So that is WHY we have employment versus contract.

    The bottom line is you have thrown so much at the wall and nothing sticks. It must be a non-stick wall will plenty of oil on it.

  38. PART IV: Alternate Futures
    The Chapter 11 bankruptcy of the Fairmont Hotel last week offers the City of San Jose an opportunity to regain land and taxpayer resources it has frittered away on this project since the mid-1980s (see PARTS I and II above). As the successor to the now-defunct Redevelopment Agency (RDA), the City still owns the underground 500-car parking garage and the leasehold improvements on retail shops on the ground floor of the Fairmont Annex that were collectively assessed at $5.7 million in 2010. The Fairmont owners also have an outstanding debt of about $1 million to the City (https://www.mercurynews.com/2017/12/15/fairmont-hotel-in-downtown-san-jose-slated-for-250-million-sale/; https://www.sanjoseca.gov/ home/showpublisheddocument?id=11319; https://www.mercurynews.com/ 2021/03/08/bankrupt-fairmont-hotel-spur-downtown-san-jose-rebound-covid-tourism/). And, of course, the City can rightfully claim that the entire project would not have been possible without the financial largesse and political backing they have provided consistently since the mid-1980s.

    It’s now an excellent time for the City to invoke and leverage its rights, property and prerogatives vis-à-vis the Fairmont owners to expand affordable housing in the city. In particular, the City should pursue taking ownership of some portion of the 22-story hotel tower and convert it to city-owned housing. The hotel has sleeping room, ballroom, meeting room and ground level facility and amenity space of upwards of 500,000 square feet, about 90% of which is sleeping space. (This excludes the ample common areas like the pools and fitness rooms (https://www.fairmont.com/san-jose/; https://teneohg.com/ member-hotel/fairmont-san-jose/#overview).

    The City should use all the legal, financial and political leverage to take, say 200,000 square feet of sleeping space to convert into 200-300 affordable housing units. This could be done through a joint ownership and management arrangement with San Jose State University (SJSU) using the Martin Luther King, Jr. Library joint City-SJSU ownership/management agreement as a basis (https://www.sjlibrary.org/). SJSU has a 60-year history in building, maintaining and managing affordable student, faculty and staff housing in an efficient and cost-effective manner (see Part III above).

    The City should take full advantage of this opportunity to reassert its rights and prerogatives vis-à-vis the real estate interests who, with the help of successive City Councils, have walked away with benefits enabled by the City while saddling residents with the burdens of increasingly expensive housing.

  39. HB

    Arguing with an broke, unemployed lifetime renter who hasnt paid rent in a half a year isnt worth five minutes of your time. Actually some of these other authentic communists have far better insight and research skills, better to engage them to expand your thinking and sharpen your arguments.

  40. ECONOCLAST

    You are right this is a great time for the city to exert its rights, call back these loans, and get its equity out. If the state was as competent, forceful, self directed as you fantasize it is, it would. It’s not competent because it exists to only to serve those who pull the strings. This is why your entire world view is absurd. Government is and has always been in the interest of those in power and their corruptors. Not in the interest of its citizens, residents, or “status” inhabitants

    USA
    USSR
    Iran
    Venezuela

    The only solution is to starve the state, not feed it.

  41. Steven: Are you on drugs or just high on hate? You try to put words in my mouth and wonder off into areas that no one has brought up. I would wager that you like to hear the sound of your voice so much that you wouldn’t take yes for an answer.

  42. HB you wrote:

    “Steven: Are you on drugs or just high on hate? You try to put words in my mouth and wonder off into areas that no one has brought up. I would wager that you like to hear the sound of your voice so much that you wouldn’t take yes for an answer.”

    When you said you DISAGREE with “this one” that was an ALL INCLUSIVE statement regarding what I said earlier, which was:

    “NO the workers are not the “LOSER” because they worked and got paid because they did their jobs. Their “BOSSES” are the LOSERS for making a work contract, and terminating it because of NO FAULT OF THE EMPLOYEE! RIGHT?

    At least this is why there is so much being done regarding extensions and enhancements of the “UNEMPLOYMENT INSURANCE”.

    Remember these people “laid off” are or “fired” are not being laid off or fired for cause. They did their jobs and were not fired because of “incompetence”, or “failure to perform”, or even “misconduct”. This is simply not an appropriate comparison. The fact is they lost their jobs because their “BOSSES” made terrible business decisions including NOT HAVING A BUSINESS INTERRUPTION CONTINGENCY PLAN.

    You again are trying to just be distracting from the responsibility of a “BUSINESS OWNER”.”

    Thus I simply said:

    “ARE you really saying that your employees DESERVED to be fired because of the business owners’ mistakes? REALLY?

    Actually, your approach is that there should be NO MORE EMPLOYEES. You want everyone to be a “contractor”. Thus, they then become a “business”. But that is not possible, because a contractor must be allowed to in fact work for multiple businesses, and even worse work for your competition after their contract ends.

    And since the contractor OWNS any intellectual property that is acquired, they can use that knowledge against you.

    So that is WHY we have employment versus contract.

    The bottom line is you have thrown so much at the wall and nothing sticks. It must be a non-stick wall will plenty of oil on it”

    As far as HB writing:

    “Arguing with an broke, unemployed lifetime renter who hasnt paid rent in a half a year isnt worth five minutes of your time. Actually some of these other authentic communists have far better insight and research skills, better to engage them to expand your thinking and sharpen your arguments.”

    I have paid my rent as required under the law. And again, the unemployed problem was caused by COVID when the country shut down on ME too. His again is nothing but NAME CALLING and not even a constructive conversation. You also wrote:

    “You are right this is a great time for the city to exert its rights, call back these loans, and get its equity out.”

    What equity, the owners ran the business to the ground, and thus actually DEPRECIATED the property value so much, the PUBLIC loss is in the hundreds of millions of dollars. You wrote:

    “If the state was as competent, forceful, self directed as you fantasize it is, it would.”

    It can’t, because the contracts and other agreements in effect gave these PRIVATE scam artists millions of dollars on what has been a damaged asset. They do not have a property worth the amount it was when it was built (it is underwater). You wrote:

    “It’s not competent because it exists to only to serve those who pull the strings. This is why your entire world view is absurd. Government is and has always been in the interest of those in power and their corruptors. Not in the interest of its citizens, residents, or “status” inhabitants.”

    So you are the one that has been PLAYING the STATE with your corrupted business models and management right? You have all the evidence in your files or closet. In any case, you wrote:

    “The only solution is to starve the state, not feed it.

    Actually NOW that you got your cash and you got your “benefit” you now are “cutting bait and running away” and leaving the SUCKER government that you corrupted holding the ticking grenade. This is what you really did, didn’t you?

  43. HB,

    As both a Domestic and Internationally recognized expert on Business Continuity Practices, even recognized in COURT. That is the REAL WORLD and you KNOW IT. I simply just need to say, you really are in no position to claim I have no knowledge or experience in the matters.

    I presented a link to a great IMPARTIAL OBJECTIVE analysis regarding Business Interruption Insurance. The idea that I MADE it up is complete trash.

    All you do is try to make EXCUSES for the lack of best practices regarding a small business. Too bad, because it just means that your advice will get other people more likely to go out of business. And if anything else I worked a SMALL BUSINESS regarding scientific research and development in the northeast for 7 years in the 1980s. My father was the Engineer, I was the Business Process Manager, taking care of purchases, charging the fees, and maintaining inventories and writing proposals. We only had a staff of 10 people, all highly educated engineers and scientists. Of course I did not tell you. My work ended up being certified by the EPA for Clean Air Act measuring devices that are still used today.

    Why is it you try to put anyone down that doesn’t agree with you?

    You just want to do your NAME CALLING game.

    Just a follow up

    And here is a copy of the EPA rules regarding CO monitoring (https://ofmpub.epa.gov/eims/eimscomm.getfile?p_download_id=523412)

    Dr. Jack Goldstein was the one that established the standards for Gas Filter Correlation Spectroscopy for Carbon Monoxide in 1977, But I started work with him in 1983 and when he introduced the FIRST microprocessor controlled and operated unit, which is called the Dasibi Model 3003. I also was working on the Dasibi Model 4108 Sulfur Oxides unit, another microprocessor controlled unit.

    He worked as a engineer in 6 devices, and I was in effect his Project Manager during that time. It was fun to travel to California from Massachusetts multiple times a year and present the equipment at the trade shows. I even had travel miles and my own credit card prior to my 17th birthday.

    My work required me to be part time while I was going to high school. But because of that work, I eventually was the President of the Business Club (yes my high school had one) It was weird being the only student in school caught always wearing a business casual outfit with a tie. And when I went to college, I carried a beeper in 1986.

    It gets tiring to hear people like yourself trying to assume what I do an do not know

  44. The former Fairmont is an ideal candidate for a Project Homekey conversion to affordable housing. Let’s face reality, business travel is not going to return to downtown San Jose in the quantity necessary to sustain so many expensive hotels. Trade shows and conventions may eventually return in some limited form, but San Jose is not a destination that convention organizers are attracted to. The two hotels attached to the convention center, along with several nearby hotels, are sufficient for conference and trade-show attendees.

    Adding small kitchens to the hotel rooms would be pretty easy, just with a microwave, a refrigerator, and a small two burner induction stovetop.

    The banquet business could continue and provide jobs for the new residents.

    The last time the hotel was sold, in 2018, it was for $223.5 million, and it’s certainly worth less than that now. 800+ studio apartments would cost about $500 million to build from scratch. For probably $40 million the hotel rooms could be converted to apartments.

  45. Mr. Devlin,

    Very good points and true, far more effective use of funds than new development. And they could rent out spaces in the underground garage to pay for services.

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