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Development

Napa Council OKs sale of parking lot to serve a hotel on post office site

From the Series: Downtown Napa Post Office Recovery Timeline series

A small parking lot at Second and Randolph streets may end up playing a big role in the redevelopment of the adjacent, quake-damaged downtown post office into a boutique hotel.

On Tuesday, the City Council signed off on the sale of the 55-space surface lot to James Keller, a Napa developer who needs parking to make his hotel project feasible.

The lot, located at the southeast corner of Second and Randolph is bordered by Billco’s Billiards and Darts, a U.S. Postal Service annex and the 3 Palms hotel.

Keller intends to expand the lot into a multi-story garage with more than 220 vehicle slots served by automated parking equipment. The garage would accommodate guests at an 80-room boutique hotel Keller plans to carve from the Franklin Station building, which the U.S. Postal Service has sought to sell since the August 2014 quake ripped cracks through its brick façade and forced its immediate closure.

Keller, who also owns the Main Street Exchange and the Young Building downtown, is offering the city $1.71 million. The price includes a $557,000 discount of its market value for keeping 65 spaces free to the public, 10 more than the current capacity.

The multistory automatic garage would stack vehicles above a new ground level with about 7,000 square feet of retail space.

The sale gives Keller more than two years, through at least March 30, 2019, to close the deal, conditioned on his gaining building permits for both the garage and the hotel. Keller affirmed after the meeting that he expects to acquire the Franklin Station at 1351 Second St. from the Postal Service around the middle of March.

Although Councilman Scott Sedgley was concerned with the two-year wait, he eventually voted for the parking lot sale along with three colleagues (Peter Mott was absent) after assurances the surface lot will stay open until its garage replacement breaks ground.

“I guess we have nothing to lose, since we don’t lose parking until the permits are issued,” he said.

Keller has not disclosed the cost of buying the post office building, but said in December that rehabilitating the structure would be his main expense, costing possibly $8 million or more.

Opened in 1933, the tan-brick Art Deco post office was added to the National Register of Historic Places in 1985. The Postal Service’s original plan to tear down the structure, which it said would require only $500,000 compared to millions for repairs, aroused an outcry among many Napans, and postal officials eventually agreed to attempt a sale instead.

An earlier sale effort stalled in 2015 when the prospective buyer dropped out during the due-diligence period, opening the way for Keller to start talks with the Postal Service last October.

Since the earthquake, downtown postal operations have moved farther west, to a storefront at 1436 Second St., across from City Hall, that once housed a UPS Store.

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Public Safety Reporter

Howard Yune covers public safety for the Napa Valley Register. He has been a reporter and photographer for the Register since 2011, and previously wrote for the Marysville Appeal-Democrat, Anaheim Bulletin and Coos Bay (Oregon) World.

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