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[whitespace] Ghosts of Hotels Past

By Dan Pulcrano

San Joseans can thank developer Lew Wolff for this latest culinary attraction. Wolff is an investor in both The Grill's parent company, the publicly traded Grill Concepts Inc., and the Fairmont Hotel's management company, along with Saudi Arabian Prince Alwaled Bin Talal Bin Abdulaziz Al Saud.

Wolff and the prince, with the encouragement of the city's redevelopment director, want to build a second Fairmont tower across the alley from The Grill. The city would give the Fairmont group an acre of downtown land on easy terms, build parking and, according to Wolff, underwrite any toxic cleanups on the site. In a gesture of appreciation to a city that has been good to him, Wolff donated $400,000 last year to one of Mayor Hammer's favorite projects, the new San Jose Repertory Theatre, where a rooftop garden will be named in his honor.

There is more than a little irony in the whole situation. The Fairmont's new tower will destroy an irreplaceable piece of the very Americana that its new restaurant celebrates: the Montgomery Hotel. Built 88 years ago by T.S. Montgomery, the hotel was the product of a visionary who, like Wolff, was a prolific developer and innkeeper that shaped downtown San Jose. When it opened in 1910, it was the city's first Class A hotel and one of the West Coast's most elegant. According to preservationists, it's one of just three remaining historic buildings on the San Antonio blocks between Fourth and Market streets.

Wolff and the Redevelopment Agency argue that unless the Montgomery comes down, the Fairmont expansion will be "economically unviable." In December, Wolff wrote the city that alternatives advocated by preservationists would drive construction costs to an unacceptably high $217 to $230 per square foot. No sooner had the ink dried on the memo than Park Center Plaza sold for $205 a square foot, and this week, San Francisco's Embarcadero Center sold for $325 a foot.

In today's go-go market, perhaps the historic hotel could be saved and the economics can work. Wolff won't go there. "Our cost of construction has gone up substantially," he says. "There is no possible way. ... We wouldn't have any choice but to not do our project."

Not Over Till It's Over

Last week the City Council voted to allow the Montgomery's demolition. Nonetheless, Monty might get a stay of execution. By the time this article appears, preservationists say they will have amended a lawsuit challenging the demolition of the Jose Theater to include the Montgomery.

And Federal Real Estate, the company that's behind plans to rebuild the Town & Country shopping center, says Redevelopment's Frank Taylor approached them about building a retail mini-mall under the Fairmont annex if they would cut the size of their Town & Country retail project by half. Taylor thinks the Federal project will queer downtown's retail future. Federal's John Richman begs to differ. He thinks downtown retail has a lot of potential and is willing to put Fed's money where his mouth is. He'll build at Winchester and Stevens Creek and downtown. "We are definitely interested in that site," he confirms and adds that Federal is drafting a letter to Taylor proposing a full-blown downtown mixed-use retail complex--not a hotel-style row of boutiques. "We don't believe in urban mini-malls," he says. "They have not had a good history."

Richman also prefers to keep the Montgomery standing. "I think it's better to keep more of the urban fabric if we can," the developer says. "We would look at keeping it in place."

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From the May 14-20, 1998 issue of Metro.

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