Council OKs new home for Caffé Italia
Caffé Italia will have a new home at the former Denny’s diner on Chiles Road if the city successfully closes escrow on the property and the construction timeline goes as planned.
The city will buy the building at 4120 Chiles Road, which is adjacent to the Days Inn, and remodel and lease it to Caffé Italia, the Davis City Council decided in a unanimous vote Tuesday night. Councilman Stephen Souza was conflicted out of the discussion and vote.
Negotiations between the city, property owner Shri Kuber and Caffé Italia owners Kevin and Shar Katz continued over several closed-session meetings up until the start of Tuesday’s council meeting.
In open session, the council agreed to pay up to $990,000 for the property. Total project cost is estimated at $1.2 million to $1.4 million, which will be paid by redevelopment funds.
Talks about the relocation of Caffé Italia began in the spring when news broke that hotelier Ashok Patel planned to expand and transform his University Park Inn & Suites on Richards Boulevard into an Embassy Suites. The City Council enthusiastically supported the project, saying the bigger, better hotel with a conference center would generate needed tax revenues and attract tourism.
The council approved a $5 million redevelopment loan to help with the $15.5 million expansion project.
Redevelopment funding supports improvement projects in the city’s blighted areas — downtown, Olive Drive and most of South Davis.
But the expansion would require Caffé Italia, a local favorite, to leave its home of nearly three decades. The restaurant also has more than four years left on its lease, although construction on the Embassy Suites was expected to start in June 2012.
The City Council decided to help relocate the restaurant. Incidentally, the Katzes had been considering expanding and were contracted to buy the former Denny’s building earlier in the year, but the purchase was not completed.
The council voted Tuesday to buy the property and lease it to Caffé Italia after remodeling it to accommodate the restaurant, including a conference or meeting space, and provide expanded kitchen facilities for catering services.
City staff expects to complete the lease negotiations this summer. Construction may begin in the fall or winter, with Caffé Italia opening at the new location by next spring.
If the restaurant is successful, it will generate sales tax revenue and support the adjacent Days Inn hotel, according to staff. The hotel was formerly Stone Villa Hotel and, before that, a Howard Johnson.
The restaurant location has been vacant for years. Extensive remodeling was started, but never finished and the city has cited the property multiple times for code enforcement violations, according to staff. The building is “highly visible and very unsightly” and the owner has had a hard time finding a buyer for the property, according to city staff.
The Embassy Suites project will continue and city staff is working with the owner on the feasibility and environmental analyses. The makeover would include additional rooms, a new rooftop restaurant, underground garage and conference center.
Patel and city leaders say the Embassy Suites brand will draw customers from miles away, helping Davis snag hotel taxes that otherwise are captured by surrounding jurisdictions such as Woodland, Sacramento and even UC Davis, which opened the 75-room Hyatt Place on campus last March.
The university is already planning an expansion of Hyatt Place.
— Reach Crystal Lee at clee@davisenterprise.net or (530) 747-8057.
Short URL: http://www.davisenterprise.com/?p=64554
Posted by Crystal Lee
on Jul 20 2011.
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So the City is using taxpayer funds to overpay for one of the worst retail locations in town. Mr. Shri Kuber must be laughing all the way to the bank having sold this “white elephant” that he “had a hard time finding a buyer for” to the City of Davis.
No sane person would spend their own money on the property, but the City has no problem using other peoples money to buy this money-pit. No wonder cities, counties, and the state are in dire financial straits?
There has never been a successful business at this location. There is a reason for that. It’s a terrible location!! It’s a rundown beat up building that should have been torn down after the last tenant failed there. Jeesh.
Totally agree with Bob D. – That site has seen, what, 10 different restaurants in the 30 years I’ve live here; and all have quietly imploded due to the awful location So long, Caffe Italia, it was nice knowing you! Suggestion: Put the zipcar franchise there; we’d kill two birds with one stone!
It’s easy to spend other people’s money. Agredd with Bob D and John about the awful location. Can’t see CI lasting there, probably move on to another location within the year. At least the workers at Hanless can get some decent food once in a while.
It’s a no-brainer for Cafe Italia, they are risking very little. They get a lease (probably rent free for the first year) on a location that is remodeled to their specifications. They can expand their catering business, and if the restaurant doesn’t thrive at the new location they can just leave and move to a better one. My guess is they will be keeping an eye out for a better location as soon as they move in.
Mark my words, in three years that building will be empty again and the city will probably turn it into a “Teen Center” or a Library.
Just like with Zip Car, the negotiators at the City got the short end of the deal again.
Hard to ignore the fact that so many resturants/hotels have failed there. I enjoy Cafe Italia but don’t see myself going to the new location, it’s just not an inviting spot. If this is the first step in the bigger picture to make that whole area more “davis” then maybe? I think the better solution would be to make Cafe Italia the rooftop resturant in the fancy new Embacy Suites! If we are going to allow a cookie cutter hotel into town then we should at least give it a Davis twist.
This is either the dumbest deal ever done by the city or the fishy-est.
I’d love to have been a fly on the wall when that was being worked on.
I like SamK’s idea, let Italia take a downtown property where there is a lot of walk-in traffic. But there’s another problem. They are using redevelopment money to buy the new property. Remember, such monies are currently under a spend-it-or-maybe-lose-it edict, with Mr. Brown having proposed termination of the program. I guess that means just dump it whether there is ‘blight’ or not, and whether there is a decent plan or not. The spend this on something…it doesn’t matter what…or the State won’t give us more, is just what’s wrong with State Government. It’s a shame that the Council behaves this way.
I think everyone in town should go by Caffe Italia and see all the blight the city is cleaning up with the huge loan and buying a building for Caffe Italia. That location is just filled with filth and vermin and really need taxpayers money to clean it up.
A longstanding, successful business owned and operated by proven community partners who are willing to cope with what would otherwise be continued blight deserves the benefit of the doubt. Thanks City Council.
What blight???
I agree with the majority of the commenters. This is ridiculous. Distorting the definition of “blight” to funnel subsidies to private entities? It sounds like Jerry Brown was spot-on.
The hideous Davis blight is out of control! Has anyone seen those red balls in front of Target? They’re kind’ve in bad taste. We need to funnel redevelopment cash to Target so they can turn them into cubes.
The hideous Davis blight is out of control! Has anyone seen those red balls in front of Target? They’re kind’ve in bad taste. Get some of that redevelopment cash to Target so they take those blighted balls and turn them into cubes.
One of the things that RDA’s are supposed to do is to provide the initial investment needed to turn an area around.
From a net revenue point of view, hotels and auto malls are, unfortunately, about the only enterprises that bring significant new net revenue to cities these days. A high-end hotel, like the one proposed at Richards, would bring a huge amount of hotel-occupancy tax (the city get to keep 10 percent of the hotel “sales” tax (TOT) versus 1% at a retail store), high property tax and the conference/event center would generate more business for downtown.
Cafe Italia has only a few years left on an extraordinarily low long-term lease. They will have to move anyway, but not in time for the city to assure that the hotel gets built (at least one hotel in different adjacent jurisdiction is currently being planned, and this is a highly competitive business).
The entire council believes that this potential purchase could serve two very important goals at once. We would be paying appraised value for the building, and appraised value takes into account a building’s location.
First, kudos to Sue Greenwald for her excellent all-around work on the council and for exercising leadership on the water project (… Davis needs more work encouraging xeriscape, greywater systems, cisterns tho).
Second, I can see why the hotel is desirable financially etc., but what’s the deal with the “blight”? Is there a legal definition that is at odds with the common understanding of the word? I’ve seen plenty of what I would call urban blight, but not in Davis, unless we’re saying a building that’s difficult to rent out is blighted.
As a South Davis resident, I drive by the future Italia location most days. So do I 80 travelers. It’s a Davis eyesore and an invitation for vandalism, not to mention potentially more serious crime. This particular stretch has been ignored long enough. In addition, Italia’s customers are often I 80 travelers looking for good family meals with visible, short distance from the freeway. This location continues that tradition and maintains a valuable tax base. It’s a win-win.
To R.C.’s concern about the RDA and the definition of blight: The blight standard factors in when the RDA is established. Once established, RDAs pay for infrastructure, economic development and affordable housing. As prop 13 eroded city’s revenue, RDA revenue did step in to help fund infrastructure and economic development.
I agree that the legislature should have formally recognized that RDAs experienced a de-facto but unfortunately necessary mission creep with the erosion of property tax revenue after prop. 13, and tried to shape and regulate that new mission more successfully.
A hotel conference center is estimated to bring over half a million dollars a year in new revenue to the city. If you have been following our budget problems, you can understand how badly we need that revenue. Helping Cafe Italia to relocate is part of that project.