Marriott International, Inc. won''t be building its proposed upscale 151-bed residential facility for the elderly on a controversial Monterey street corner, at least until the company comes back to the Monterey City Council with a plan to include beds for low or moderate-income residents.

In a unanimous vote at its March 3 meeting, the council upheld a Jan.13 decision by the Monterey Planning Commission, which rejected Marriott''s proposal on similar grounds of affordability.

Marriott''s Monterey Oaks project, designed for the four-acre Doud property at 1110 Cass Street, has been through many incarnations since the property first became vacant in 1979. In December 1996, the city approved a 184-bed skilled nursing facility on the site, and approved the necessary water allocation, with the condition that 60 percent of those beds would be designated for low or moderate-income elderly.

Six months ago, property owner Jerry Holland brought in Marriott as the project''s new developer. Last November, Marriott came before the council with revised plans for a combination assisted living and skilled nursing facility. By December, they agreed to scale down the project to 151 beds to reduce water usage, which had been a main city objection. But none of the beds were to be "affordable."

"We welcome the addition of a high-quality facility as proposed by Marriott," Vicki Bamman, executive director for the county''s Ombudsman for Long-Term Care, told the council. Nevertheless, Bamman said she was disappointed that as proposed, the project would be inaccessible to the majority of Monterey''s aging senior population. "With the elimination of their affordability condition, the proposed facility will not effectively serve those seniors who have lived and worked and raised their families here," she said. There are currently no beds for low-income seniors in any assisted living facilities on the Peninsula, she said, meaning that low-income Peninsula residents must move to Salinas.

On Jan. 13, the planning commission rejected the Monterey Oaks proposal in a 5-to-2 vote, noting that its previous approval had been conditional on 60 percent of its beds being affordable. That affordability mitigated the bulk and density of the project, which posed traffic, parking and water usage problems. Commissioners noted that without the 60 percent affordability component, they would not have approved the project.

The first half of the heated three-hour city council review of Marriott''s proposal last Tuesday night centered on detailed water usage issues. But the heart of community opposition was revealed during the public comment session, when local after local urged the councilmembers to deny permission for the project because it did not address the needs of Monterey County''s low-income elderly.

"This project is not needed on the Monterey Peninsula," said Alan Samuels, administrator of the Carmelo Park residential care facility for the elderly (RCFE), which is located next door to the Doud property. Despite neighborhood opposition, which Samuels says was based on lack of need for a new RCFE and concern about the project''s density and water usage, he and most other opponents gave their approval when Monterey Oaks added the 60 percent affordability component 15 months ago. "They were doing it because they wanted to get federal HUD assistance, but regardless of their motivation, we saw it would provide a needed service," Samuels says. "Without the low-income component, the project was not needed. Most RCFEs on the Peninsula have vacancies."

In its proposal to the council, Marriott argued that some of its beds--six, to be exact--would be "affordable." But their definition of affordable differs from Bamman''s. She pointed out that those six beds would be Medicare beds, paid for by that federal program for a maximum of 100 days of medical care. "MediCal is the program that subsidizes low-income patients, and Marriott has not indicated they will apply for MediCal certification," she said.

In a phone interview before the council meeting, and at the meeting itself, Marriott development director Seth Bland played down the affordability issue and focused on the high quality of care Marriott would deliver to its elderly residents. He added that the 60 percent affordability clause had been abandoned before Marriott came into the project, once the previous developers found they could not get HUD funding anyway. "Now we''ve been tarnished by that brush," he complained. And, he added, the affordability component was tied to the city''s promise of financial assistance and water rights, both of which offers were later withdrawn.

As the March 3 meeting neared its conclusion, and it became clear the council was about to deny the proposal, Hollander''s attorney interrupted Mayor Dan Albert''s closing motion to suggest that Marriott would consider a last-minute compromise. "We''d like to see approval tonight, with a defined affordability component," he interjected, amid shouts of "sit down" and "you''re out of order."

The council voted unanimously against the project as proposed, but all councilmembers said they''d like to see Marriott come back with a revised plan, including a certain number of low- or moderate-income beds. Councilmember Clyde Roberson said he wouldn''t want to accept less than the original 60 percent low-income beds, but other councilmembers and the mayor indicated they would consider numbers ranging from 15-25 percent of beds designated as low- or moderate- income.

Bland said Marriott would probably return with a revised proposal, but he avoided making any commitment to MediCal beds. "I''ve put [the 15 percent affordability proposal] on the table now," he says. When asked whether that meant MediCal or Medicare beds, he would only say "across the board affordability."

"Our greatest concern continues to be affordable housing," Bamman concluded. If Marriott would commit to building a facility where 15 percent of the beds would be MediCal-eligible or otherwise affordable to the non-wealthy, she says, "we will welcome and applaud the project." cw