Negotiations between the city and a group intending to build a hotel and office complex near the Civic Center have foundered over a proposal that the city become part owner of the hotel in return for undertaking construction of a parking garage.
The City Council rejected the proposal, which would have given the city a 6% share in the hotel. Council members said the city has no business owning a hotel.
Christian Frere, president of Gestec Properties, said in an April 1 letter to City Administrator John Dangleis that it would impose too much of a financial burden on the hotel if his company were required to build a parking garage. The original agreement, signed in February, 1986, between the city and Gestec Properties and Muller Co. required the developers to bear the cost of constructing a garage.
The agreement, which called for escrow on the property to close Feb. 27, has expired and the city may rebid the project, according to City Atty. Glenn Watson.
The council directed Dangleis to contact Frere and return with his response in a month.