The upscale lodging chain that planned a large, controversial hotel in downtown Healdsburg has decided not to pursue an alternative, smaller project.
Representatives for the Florida-based Kessler Collection informed city officials they are dropping plans to pursue any hotel at the site just south of Healdsburg Plaza.
"It's a great site and a great city and Kessler would love to come back and find a deal that works. But for now, the timing is just wrong," Owen Smith, director of real estate development for the hotel group, said Thursday.
"We looked at scaling it down, and it didn't make sense," he said.
It was supposed to make a grand statement, but the luxury, four-star hotel never got to square one.
It would have been the tallest building in the city, with sweeping views from the rooftop restaurant and swimming pool.
The boutique hotel included plans for an art gallery and cafe on the ground floor, a health spa, state-of-the art meeting rooms and a fitness center.
The company touted its track record — a portfolio of 10 "exclusively designed and artistically inspired boutique properties," each filled with "unique artwork from internationally acclaimed artists."
But opposition began to form as soon as details leaked out about the number of rooms and 59-foot height, exceeding the city's 50-foot-tall limit.
Critics said it was out of scale, or that it represented a tipping point, a threat to the small-town character that too much tourism can bring.
Soon after the hotel application was filed in late September, city planning officials questioned the density of the $22 million project, saying the structure needed to be smaller, or a general plan amendment would be needed along with expanded environmental studies.
Last month, Kessler representatives withdrew their application, but said they would go back to the drawing board. But a smaller hotel didn't pencil out.
"It clearly won't work for the formula we have," Smith said, adding that the city's parking requirements are "in flux" and expected to become more stringent before the hotel could gain approval.
"They got off on the wrong foot," City Councilman Gary Plass said Thursday. "I'm sorry to see them go. I think they're a reputable company. Their intentions are good."
He said that "others will learn from their mistakes."
The lessons didn't appear to be lost on another group of developers who are proposing a smaller, 39-room hotel on a parking lot almost directly across the street, at 227 Healdsburg Ave.
Those developers, the Sher family and Paolo Petrone — who also built Hotel Healdsburg and h2hotel — made sure to vet the project in informational meetings, prior to formally submitting anything to the city.
They've met with individual council members, business leaders and even members of Healdsburg Citizens for Sustainable Solutions, a group that wants to restrict the size of new hotels, possibly with a ballot measure next year.
After meeting with the citizens group, they agreed to scale down the size from 43 rooms to 39.
And so far, community response to the smaller hotel, nicknamed h3, has been positive.
John Holt, one of the owners of the site at 230 Healdsburg Ave. where Kessler wanted to build, said Thursday that the hotel group's option to purchase the the property expired today. But they had the possibility to extend it until May if they had chosen to pursue a hotel.
Kessler representatives early on struck a tentative deal for parking requirements with the city to provide 33 on-site parking spaces for the hotel. They also pledged more than $1 million to create more parking downtown.
"I understand his frustration. He had a feeling he had an 'in' with the city and he would be able to do what he wanted," Holt said of CEO Richard Kessler.
"He explored how to match what the city wanted and he couldn't come up with enough reality to make it pay."
Holt said it's possible in the future that the site could serve as a smaller hotel, developed by a different group than Kessler.
"I'm perfectly happy to sit on it for awhile," he said of the 12,500-square-foot lot. "Nobody is going to pursue it, at least in the near term."
You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.
UPDATED: Please read and follow our commenting policy: