The project will feature a market hall, restaurant, wine bar, flower shop, banquet hall and spa.

MORGAN HILL, CA—The Granada Hotel and Spa, a four-story boutique hotel with 60 guest rooms, has broken ground. This will be the first hotel to open in the downtown neighborhood.

The new hotel site is located at 17490 Monterey Rd. at the corner of Monterey Road and East First Street, and is slated to open in the summer of 2021. The mixed-use destination hotel and spa will feature many amenities including a market hall, restaurant, wine bar, flower shop, banquet hall, spa facilities, fitness center, pool and valet service.

KTGY Architecture + Planning was the architect/designer on the project.

“The long-awaited new development responds to the city's long-time goal to revitalize this southern Silicon Valley downtown neighborhood with hotel use and boost tourism so we are excited to see it finally move forward,” said Sean Martino, director in KTGY's Los Angeles office. “We expect that the Granada Hotel and Spa will fuel the addition of more restaurants and entertainment venues in the area. The hotel and adjacent theater will reinvigorate downtown Morgan Hill and will create a new anchor to the Main Street retail area, attracting both local residents and tourism.”

Granada Hotel's owner, Frank Léal of Léal Vineyards in Hollister, recently renovated the neighboring Granada Theater. Léal is also the owner of Sycamore Creek Vineyards and Willow Heights Mansion, both in Morgan Hill, which are popular wedding destinations and event facilities.

“We worked very closely with Frank Léal on the design of the Granada Hotel and Spa. This was a very important project to Frank and he had a lot of ideas that he wanted us to incorporate,” Martino tells GlobeSt.com. “We are thrilled that Frank can move forward with the construction of this new contemporary-style boutique hotel in the very heart of Morgan Hill's downtown district.”

A large kitchen on the ground level will serve the restaurant, wine bar and market area, which will be open to the public as well as hotel guests. On the second level, there is a catering kitchen to serve the events held in the banquet hall on that floor. The pool and deck are also located on the second level. The guest rooms (30 keys per floor) and suites are located on the third and fourth floors. There are also outdoor living room and lounge areas on the third and fourth floors. A rooftop garden will grow organic vegetables for the restaurant and market hall.

There are many indoor and outdoor flex spaces that can accommodate small to large parties including a turf lawn on the ground floor. The restaurant offers a private dining area with a glass wall that views the glass flower coolers. In addition, there is a glass walk-in wine cooler with views from the main space and private dining area.

“The use of bricks on the first two levels is in keeping with the traditional architecture and materials found in Morgan Hill. The third and fourth stories are more contemporary in design and were inspired by modern architecture found in California, New York and Portugal,” Martino tells GlobeSt.com.

According to the 2019 edition of Trends in the Hotel Industry by CBRE Hotels Americas Research, total operating revenue increased by 2.6% in 2018 for the average hotel in its survey sample. Managers were able to limit the growth in operating expenses to 2.8%, thus allowing for a 2.3% increase in gross operating profits at surveyed properties. The 2.8% growth in expenses is less than the long-run average of 4% during the past 40 years, however, it is greater than the 1.8% average annual growth rate achieved during the past two years, says CBRE.