S ome railroad tracks are still visible along the rec trail in Monterey, but it’s an unassuming stucco building at the base of Wharf II on Del Monte Boulevard that still clearly marks Monterey Railroad Company’s original 1880 route from Castroville to Monterey.

The city spent $58,000 in December sprucing up the old passenger train depot, taking its white exterior to yellow, but it still needs a major investment to its interior to become a usable space.

The City Council narrowed down a list of five prospective tenants to two; at its March 5 meeting, it’s expected to decide between two competing proposals for commercial tenants in this slice of prime real estate—even as city staffers claim the process for soliciting bids has gone awry from the start.

“The marketing and promotion of the Southern Pacific Passenger Depot has unfortunately fallen short of minimum industry standards,” city real estate analyst Sam Rashkin wrote in a Feb. 3 letter to the city’s Waterfront Master Plan Subcommittee.

He’s referring to the prospective tenants—neighboring Monterey Beach House and high-end auto auctioneers Russo and Steele—who say they never even got a chance to bid on the property.

But in January, the council agreed unanimously to narrow the list of contenders to two: a marketplace, proposed by Salinas agribusiness giant Tanimura & Antle; and Trailside Cafe, which proprietor Sean Allen is looking to relocate from its current Cannery Row spot.

The council punted the decision back to the waterfront subcommittee, which voted 4-1 on Feb. 4 to recommend Trailside, because the appraisal shows a restaurant would yield higher sales, and therefore pay higher rent.

But advice from City Manager Fred Meurer and Foothill Partners developer Doug Wiele, who built the Trader Joe’s shopping center, might bend the council’s ear.

Until negotiations failed this week, Wiele’s had been working on a proposed Alvarado Street marketplace, a junior-sized version of San Francisco’s famed Ferry Building, and told City Council there’s not room for two.

T&A meanwhile has the support of Cannery Row Company partner Ted Balestreri (owner of the neighboring Sapporo building), and the Fisherman's Wharf Association, which argues there’s no room for yet another restaurant.

“I don’t think I’d be competition for them at all,” Allen says. “They’re competing against each other. Nobody on the wharf serves eggs Benedict or huevos rancheros.”

In a Jan. 23 email to Meurer, Wiele recommended going with Trailside: “I’m up against a very entrenched Wharf constituency which does not want restaurant competition and which is clueless as to The Ferry Building and how to pull off a fresh market,” he wrote.

“Doug—An excellent treatise! You should be a Professor,” Meurer wrote in response.

That was before Wiele’s plans fell through, but Meurer insists he’s not swayed by market saturation arguments. “Things ebb and flow,” Meurer says. “I remember a time when every other storefront in Monterey was a bookstore, then a Mexican restaurant, then a foot massage.”

Clarification: An earlier version of this story suggested Ted Balestreri and the Fisherman's Wharf Association each believed the waterfront could not support additional restaurants. This is only the Wharf Association's opinion, not Balestreri's.