Janet Lyman,

I saw your letter in the Palo Alto Daily News today on the closing
of Hyatt Rickey's.

Your attack on Deborah Ju and the Charleston Meadows Neighborhood
Association (CMNA) is based upon information that the Palo Alto Daily
News continues to print despite knowing that it is false.

At no point did Ms. Ju and the CMNA oppose the hotel or its renovation
and repeatedly made clear that they supported the hotel.
The decision on the closure of the hotel was made in stages by the Hyatt
Corporation for business reasons unrelated to the redevelopment of
the site.  First, they eliminated the conference and meeting rooms that
were such a plus to the community (as you note in your letter).
In announcing this, Hyatt stated that there had been a substantial
downturn in conferences and other meetings in the wake of 9/11, and
that these facilities were not economically justifiable.
  Note: I have heard similar comments from another local hotelier,
  so this statement is likely to be the truth and not a cover story.

Some time after this, Hyatt announced that it was canceling plans to
renovate hotels in several cities with the Hyatt Rickey's being one of
them.  The reason again was economic - these hotels were located in
areas that had an excess supply of rooms.
  Confirmation: I run into several local hoteliers in the course of my
  other activities and asked them about this.  The two I talked to
  independent said that they were glad to see Rickey's close for two
  reasons.  First was that Palo Alto had a glut of rooms and many of
  the hotels were operating well below normal and desirable occupancy
  rates.  The glut was putting serious pressure on the prices they
  could charge for rooms.  One complained that her margins had become
  so thin that she was having to reject business because people were
  demanding such steep discounts that she lost less money by leaving
  the room empty (remember, it costs money to service a guest).
  The second reason was related: When people from outside the area looked
  up room rates, they saw the Hyatt name and expected much higher class
  accommodations than what Rickey's offered.  These listings then set
  the expectations for other brand-name hotels, and this is much lower
  than what they would otherwise be able to charge.  The expectations
  game means that Hyatt Rickey's (as a Hyatt) charges more than it
  should be able to (relative to facilities) and the other hotels have
  their rates dragged down.

The Daily News has repeatedly made the claim that Palo Alto will lose
$1M in tax revenue from Rickey's.  They know this is false: They have
been presented with the explanation and have asked no questions or made
any counter argument.  When Rickey's closes, most of the customers will
transfer their business to other local hotels, most of them in Palo
Alto (for example, the Cabana across the street).  Also, average room
rates across all Palo Alto hotels will likely rise, partly from the
the reduction of excess capacity, partly by eliminating distorted
expectations on what are reasonable rates (above), and partly because
Rickey's dragged down the average by having below-average rates.
One hotelier guestimated Palo Alto tax receipts from hotels to rise after
Rickey's closes.

The analogy that I use is Starbucks.  Suppose they saw a downturn in
business and decided to close their most worn-out and lowest-performing
store in town.  Would this result in all the customers of the closed
store no longer buying coffee?  Of course not.  They would simply
transfer their business to another store, probably only a few blocks
away.

So that is what Ms. Ju and CMNA did NOT do.  What DID they do?
They were concerned about many of the same concerns that you expressed
in your letter.  Hyatt originally proposed to build over 300 houses
on the property in addition to the hotel, and Ms. Ju expressed the
concern that Charleston would not be able to handle the increase in
traffic from this and other projects along the corridor.

As a result of the efforts she led, the City finally did a long-promised
study of traffic capacity and safety issues for the Charleston-Arastradero
corridor and documented that it needed substantial improvements, but
that the improvements would allow those developments.

Concern about traffic and safety of children going to school was not a
ploy.  The City has approved the development, but is dragging its heals
on the safety improvements.  Ms. Ju has organized a meeting for this
weekend (which I am attending as a representative of the Barron Park
Association) so see what we can do to push the City to meet these
improvements.

Ms. Ju and CMNA had other objections that I agreed with.  For example,
the City has an uncontroversial formula for amount of open space needed
for various types of housing.  Hyatt proposed that the ornamental
plantings associated with the hotel be included in the amount needed
for the housing, thereby shorting the children of space to play.
Similarly, Hyatt made fallacious arguments to try to reduce the parking
provided.

After the City had determined how Charleston could be improved to
adequately handle the 300+ housing units at the Rickey's site, the
Hyatt Corporation decided to close the hotel, replacing that portion
of the site with housing and changing the type of housing from a
very high density of smaller units to a lower density with much larger
(and presumably more expensive) houses.  I have seen no claim that this
change was driven by anything but economics - a response to the market
conditions for various categories of houses.  They dropped it first to
200 units (1/3 the original density) and then to 185 units.  I don't
know what the current proposal is.

Your letter's claim that Ms. Ju and CMNA wore Hyatt down with "grinding
and insect biting" is another myth propagated by the Daily News and
its allies.  I have been in a variety of meetings where the failure of
the Rickey's project was discussed.  The near consensus of the local
developer community seems to be that it was an entirely self-inflicted
defeat, with all the conversation focusing on whether the key mistakes
were made by the local team, by people in the Chicago headquarters or
by a dysfunctional relationship between the two.
An interesting public discussion of this can be found in a Guest Opinion
in the 2004-May-26 edition of the Palo Alto Weekly.  It is entitled
"Hyatt needs to learn more about 'horse whispering'" and was written by
Jim Baer, a top local developer.  It is online at
  http://www.paloaltoonline.com/weekly/morgue/2004/2004_05_26.guest26baer2.shtml

Your complaints about losing the garden court style hotel and the problems
with construction are ill-founded - Hyatt always planned to tear down the
existing hotel and rebuild the whole site.  The replacement hotel would have
been a conventional design.

If you have questions about this information, please feel free to call me
to discuss it.  And if people congratulate you on your letter, I would
appreciate your passing on any of the above additional information that
you find appropriate.

Thank you,
Doug Moran