The Gilroy City Council unanimously supported a plan to add restaurants, a hotel and other businesses at the corner of East Tenth and Chestnut streets.
The Sept. 20 decision paves the way for future council approvals required for the project. The planning commission gave its recommendation on Sept. 2.
Evergreen Development Company is working to bring the Laurel Square project to a nearly seven-acre property that currently houses the Chestnut Square shopping center, built in the late 1970s. Businesses on site include O’Henry’s Donuts, Gilroy Market, Coast Auto Insurance and others, as well as Trans Valley Transport behind the center.
The proposal outlines six business pads on the property. A gas station and convenience store is located at the corner of 10th and Chestnut streets. Three drive-thru restaurant buildings are also in the plans, with Chick-fil-A and Starbucks being two of the confirmed tenants.
A car wash operated by BlueWave and a five-story, 120-room Hyatt hotel are the other tenants. Rogg Collins of Evergreen said the company is currently negotiating with an “upscale hamburger establishment” for the third and final restaurant pad.
Collins said he appreciated the city’s support of the project, adding that Evergreen anticipates pulling building permits by June.
Responding to a question by Councilmember Carol Marques, Collins said the Gilroy project will not have the problems facing Evergreen’s development underway in Morgan Hill.
In mid-2019, Evergreen broke ground on a 20-acre commercial development at the corner of Butterfield Boulevard and Cochrane Road. However, two years later, work has stalled, with only a building for 7-Eleven having been constructed while the rest of the lot is vacant.
Collins said when Evergreen closed escrow on the project, only half of the development had confirmed tenants. But those tenants started pulling out when Covid-19 hit, according to Collins.
He added that activity is starting to return at the Morgan Hill site.
“With the project here in Gilroy, we have five of the six pads spoken for, and we are pretty far with the last pad,” he said. “It’s not going to be another Morgan Hill. We’ve got all the users lined up.”
Guadalupe Arellano said some residents along Eighth Street, behind the proposed development, did not receive notice of the project. Many of them were concerned about the hotel, as well as the traffic the project could generate, according to Arellano.
“They are ready to learn what’s happening there, but they just feel like they’re being overlooked,” she said.
