ZENIQUE HOTELS’ PLAN to build an upscale select-service property in a California city known for its wineries continues to hit road bumps – the latest is a lawsuit that threatens the project.
The company’s original proposal to raze a 65-year-old roadside motel on two acres in Paso Robles to make way for a 133-room Hyatt Place was first stalled in 2017 when historic preservationists protested the loss of the 22-room River Lodge Motel.
The El Paso de Robles Area Historical Society and Paso Robles Downtown Main Street Association lobbied for the structure to be saved as it is an example of Googie architecture prevalent in post-World War II America. The motel has most of its original architectural features, including the sign, said the historical society in a May 2017 letter to the city.
Some city residents and officials wanted to see the old motel razed as they consider it an eyesore that sits at Highway 101 and State Route 46, one of the gateway intersections to Paso Robles.
Preservation won out. An environmental impact report labeled the River Lodge Motel “an historic, cultural resource.”
As a result, Rupesh Patel, president and CEO of Zenique Hotels in Burlingame, California, and Paso Robles City Council in June agreed to a land swap. In this case, Patel is doing business as Zen Paso Robles LLC, which acquired the motel in 2016.
In exchange for the River Lodge Motel and surrounding land, the city gave Zen Paso Robles a three-acre site at a nearby corner along Route 46. The negotiations involved discussion of the value of both sites, reported the Paso Robles Daily News. The value of each site is reportedly about $2.8 million.
The city hopes to sell the River Lodge Motel to be re-purposed as a tourist attraction.
In July, the project faced another roadblock when Kevin Bierl of Pacific West Development filed suit in San Luis Obispo Superior Court seeking an injunction, claiming the swap is illegal. The suit claims the city violated open-meeting and state environmental laws in negotiating the deal.
Bierl owns the Hampton Inn and Suites and an independent hotel called La Bellasera that sit between the old motel site and the land that Zen Paso Robles got in the swap.
Bierl also claims the city had once promised him if the land came up for sale, he would be notified and have an opportunity to bid on the acreage “on an equal footing with other potential buyers,” says the suit. Bierl had previously attended city meetings to voice concern that a four-story Hyatt at the River Lodge Motel site would block the roadside view to his hotels.
Patel and Zen are not defendants in Bierl’s suit, but it does name them as “real parties in interest.” Patel said the lawsuit is delaying construction of the Hyatt Place until at least the third quarter of next year.
The city on Aug. 23 filed a response to the suit, denying Bierl’s claims. A case management conference was held on Aug. 27 and a second one is scheduled for Oct. 1, with a court hearing scheduled for Jan. 7, said a superior court spokesperson.