The Gilroy City Council looked at conceptual plans for a development that could add a hotel, gas station and restaurants on 10th Street between Chestnut Street and Highway 101.
The Feb. 10 council meeting was a study session for the proposal. Formal plans have not yet been submitted.
Evergreen Development Company said it is looking at a six-acre property that currently houses Chestnut Square. Businesses currently on the property include O’Henry’s Donuts, Super Taqueria, Gilroy Market and others, as well as ASI Trucking.
The Gilroy Fire Department’s Chestnut Station and Gilroy Tire & Brake, also located within the same block, are not part of the project.
A conceptual map of the proposal shows seven structures, anchored by a four-story, 124-room hotel. Rogg Collins of Evergreen said a number of tenants have expressed interest for the development, including Chick-fil-A, Smashburger, 7-Eleven and Starbucks. Collins added that the developers are working with a Morgan Hill-based operator for the hotel.
A car wash proposed for the property drew concern from some members of the council, although Collins said such a facility is needed to make the project feasible financially.
“A big part of retail today is affordability and economics,” he said. “It’s very hard to make things pencil from a retail standpoint. We have users for every one of the pads who are willing to pay a good price to be there.”
Collins added that the developers moved the location of the car wash from its original location near the entrance based on feedback they received from the council at a previous meeting in early 2019.
Mayor Roland Velasco said he liked the idea of the hotel from the city’s perspective, but he wasn’t convinced a car wash would be beneficial.
“If you pushed hard enough, you might be able to find another tenant for that space that will truly benefit the city,” he told Collins.
Councilmember Fred Tovar suggested the developers consider an electric vehicle charging station for the space rather than a car wash, citing the demand for such facilities, as seen at the Gilroy Premium Outlets.
Collins said Evergreen will now begin the entitlement process for the property.
“We’re really excited about this project,” he said. “It sounds like if we can get over the issue of the car wash and have further discussion on that, we have something that will be a huge benefit for the city.”
