For Palo Alto's elected leaders, the hotel boom that is transforming south El Camino Real is a trend to be embraced: a welcome boost to the city's revenue stream at a time of rising infrastructure costs and growing pension obligations.

The City Council signaled as much last year, when it voted to explore allowing greater density for new hotels, particularly in the downtown area.

But for residents of Palo Alto Redwoods, the promise of new riches comes at a high cost. On Dec. 21, a group from the 117-unit condominium complex came to City Hall to protest the latest entry into the crowded field: a 90-room hotel proposed for 4256 El Camino Real, site of Su Hong restaurant. From their point of view, the new project will cause traffic havoc, threaten the health of area redwoods and create parking problems.

The residents made their case to a largely sympathetic Architectural Review Board, which found the latest design for the new hotel to be lacking. Though the board did not vote on the project, members indicated at the Dec. 21 meeting that the developer, Mircea Voskerician, will need to revise the proposal to win approval.

The meeting was the board's second look at the project, which also faced neighborhood opposition when it was first presented last August. The developer's architect, Chek Tang of the firm Studio T Architects, told the board that since August, the project team has made some revisions to make the new hotel more amenable to area residents. This included reconfiguring the building to enable a larger courtyard.

Tang also noted that the project is consistent with all the zoning rules and is not seeking any exemptions.

"We have heard the comments and we have in good faith addressed all the comments, not just from the board but from the community as well," Tang said.

Palo Alto Redwoods residents didn't see it this way. Josephine Schuster, who has lived at the complex for 32 years, was one of several residents to complain about the proposed height and mass of the new hotel, which she said would overshadow many of the condos.

"I did not move to Palo Alto to live in a cave," Schuster told the board. "That's how I'd be living if this project is approved."

Sharlene Carlson, who also lives at Palo Alto Redwoods, agreed. Residents would like to welcome a new neighbor with whom they can "reasonably and comfortably coexist." But the latest proposal, she said, is "not acceptable to us."

"Nothing about the proposed benefit benefits our community," Carlsen said. "There are many things that present potential harm."

A major concern, for both residents and board members, is traffic. According to the latest design, hotel guests coming in from El Camino Real are immediately directed to a ramp leading to an underground garage. The new plan also includes a large porte-cochère in front of the hotel, as well as a loading area for deliveries.

Neil Murphy, who has lived at Palo Alto Redwoods for six years, argued that the layout would create safety hazards and worsen traffic circulation on El Camino Real. It will encourage illegal parking that will block traffic visibility, Murphy said.

"In reality, this proposal exacerbates a dangerous situation that no one will take responsibility for adequately mitigating after the fact," Murphy said.

Parking was another area of concern. The developer plans to rely heavily on mechanical lifts to provide the 96 parking spaces required by code. Ninety of these spaces would be provided through three-level parking lifts -- technology that has plenty of skeptics in the community.

If approved, the new hotel would occupy a stretch of El Camino that has become a magnet for hotels, big and small. These include two recently constructed hotels -- Hilton Garden Inn and Homewood Suites -- as well as Crowne Plaza Cabana, Palo Alto Inn, Americas Best Value Inn, Oak Motel and Dinah's Garden Hotel.

John Hutar, general manager of Dinah's Garden Hotel, was among the speakers who opposed the new hotel proposal -- partly because of the way it is handling parking and traffic. Hutar said he has spoken to a colleague in a Santa Cruz hotel that utilizes similar parking-lift technology and was told that the parking situation is by far the "biggest detractor" for hotel guests.

Hutar noted that when Dinah's opened in 1958, it won accolades from area architects for its design. Having a "massively dense structure" go up right across the street "would be just a shame for Palo Alto and everything we stand for in our values."

"We are open to competition -- that's everyone's right," Hutar said. "But to jam this much density on a parcel in a neighborhood that is currently lovely would really be a shame."

Board members largely agreed that the project still has a long way to go before it wins approval. Board member Robert Gooyer expressed misgivings about the proposed loading zone and parking layout, while board Chair Wynne Furth said she would not be able to approve the project unless she is convinced that all the trees on the perimeter of the hotel property can be preserved and protected.

Board member Peter Baltay told the applicants that the hotel needs to attractive, safe for drivers and accessible for guests to get around in before it can get his support.

"These are all basic things that just aren't happening," Baltay said.