Virgin Hotels considers downtown Mountain View

BRANSON INTERVIEW

Virgin Hotels, the hotel brand founded by billionaire entrepreneur Richard Branson, could come to Mountain View.

The four-year old hotel company — which has yet to open its first property despite generating intense buzz — is talking to the city about developing a hotel project on city-owned parking lots near the downtown Caltrain station, according to public records. City council members are slated to discuss the proposal during closed session on Tuesday, according to a council agenda.

Much remained sketchy about the project, including its size, what the terms of a deal would look like with the city, and whether Virgin is working with a third-party development partner on the proposal. City and Virgin officials weren’t immediately available to comment.

Branson, the business mogul whose Virgin Group is in everything from a music label to airlines to a space-tourism company, has so far announced three locations for the hotel brand: New York, Chicago and Nashville. Of the three, Chicago is the furthest along, with a targeted opening this fall after being plagued by cost overruns and delays.

The Virgin Hotels website describes the concept as “contemporary style AND great functionality, an efficient yet personalized experience, ample communal space and a signature restaurant.”

Thomas Callahan, co-president and CEO of PKF Consulting USA in San Francisco, said the company’s lack of a track record has slowed the roll out of the brand because potential partners don’t have much on which to assess its prospects.

“That said, it’s got a great story, and there’s a certain cool factor with Virgin,” he said. “It’s always difficult for new companies until you get a few of them up and running.”

Indeed, analysts are still a bit unsure of what to make of the new brand. Alan X. Reay, CEO of Atlas Hospitality in Irvine, called Branson’s Virgin Group “one of the all-time greats when it comes to marketing and branding.” But he added, “when you’re asked to describe a Virgin Hotel, I don’t really know what it is.”

Some more concrete details of the Virgin approach are appearing. Last month, when Virginannounced a new hotel in Nashville, it said the 240-room property in the thick of the city’s Music Row would include “a cutting-edge recording studio.” That suggests Virgin intends to personalize its properties for each market, portending any Mountain View project would be particularly techie.

Callahan and Reay called jobs-heavy Mountain View a very profitable market for new hotels, and hospitality companies have proposed several projects there recently. Shashi Group is seeking to move forward with the first hotel in the city’s North Bayshore jobs district, home toGoogle, LinkedIn and Intuit. The city is also seeking developers for a project on city-owned land that is expected to include a hotel component.

Less clear is how the city’s downtown would fare for an operator like Virgin, they said, though the bustling startup demographic might be a good fit for Virgin.

“Mountain View is a very strong hotel market, and the ones that are there are doing very well,” Callahan said. “For a property like Virgin, I can see why they want to plant their flag on the Peninsula. If the demographics they’re going for are young millennials, it’s not surprising.”

Added Reay: “If they were up and running and had maybe five or six hotels up, I could see that making sense, but it’s still very early on in terms of development.”

While executives from Virgin didn’t return calls, the Mountain View project appears to be at the feasibility-assessment stage.

The city has an economic strategy of ground-leasing some of its land holdings (including two parcels to Google Inc.), and the effort has helped bolster the city’s general fund. Still, the city has not been actively marketing the sites Virgin is apparently interested in — two public parking lots on either side of Hope Street between W. Evelyn Avenue and Villa Street.

Parking is already at a premium in Mountain View, so any project at a minimum would probably have to replace the public lots’ capacity and create enough spaces for itself.

We’ll update this story if we hear back from the folks at Virgin.

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