Switch the hotel lot with the "phase 2" lot. The developers would have more design freedoms with both the main entrance and the interior, encounter less resistance form demolition opponents, and have no demolished surface area to deal with. Make Soledad St. a two way street for that area, have the city redo the sidewalk, maybe put in some landscaping, more and better lighting, clean up the facades of the existing buildings on either side, a couple of taxi stands, and voila.
Save the "Phase 1" lot for office, retail, & residential. They can take advantage of federal and state historic tax credits. I think the existing buildings would be better suited for those purposes anyway. But I suppose if I was the owner/developer, I would want to know how far I can go with a design before I encounter any resistance.
