Gerry Kehoe isn’t back. The Florida-based developer who was stripped of his exclusive right to develop property in the 100 block of Main Street last August hasn’t crept back into Salinas, quietly closed escrow on new property, and scurried off to work up a new scheme for a 14-story behemoth in Oldtown.

In fact, Kehoe never left. The current 14-story building plan looks a lot like Kehoe’s other proposal. It simply moved up half a block and hung a right.

But this time, Kehoe says, his “pipe dream” will become a reality.

Last December, the Salinas City Partnership, a group of agribusiness investors, won the right to negotiate to develop the Oldtown property, across from Maya Cinemas. Kehoe had held that exclusive right for years, and had wowed city officials with his plans to build a huge hotel-condo complex, which would include a Hilton Hotel. He failed to mention that Hilton never signed on.

In March 2005, a Hilton VP told the Weekly that Kehoe was “a nice dreamer,” but “there’s just no way Hilton would ever lend their name to something doomed for failure.”

So, five months later, pushed out by the Salinas City Council, Kehoe handed the new partnership hundreds of thousands of dollars worth of building studies: an environmental impact report along with noise, parking, and shadow studies. They’ll need to be updated, but that’ll cost the partnership a fraction of the time and money Kehoe spent.

Then, on Feb. 17, Kehoe closed escrow on the Greyhound bus station at West Gabilan and Salinas streets. This new property is a piece in Kehoe’s larger development plan for Oldtown, which also includes the old Wells Fargo Bank building Kehoe owns, located at the corner of Gabilan and Main streets.

Kehoe wants to put a 14-story condo complex on the Greyhound bus station property, virtually the same complex he had hoped to erect across from the Maya Cinemas. The new plan is a collaboration between Kehoe’s Berkley, Inc. and Barry Swenson Builders out of San Jose.

Kehoe also says he plans to convert the old bank building at 201 Main St. into a restaurant and nightclub.

“We’re focused on bringing one of the leading executive chefs from Monterey to Salinas to setup a first-class Italian restaurant,” Kehoe says, declining—like the Kehoe of days past—to give the identity of the chef.  

While Kehoe waits for the perfect time to disclose the chef’s identity, he’s busy playing landlord, recently entering into an agreement to rent office space in the bank building to Salinas Mayor Anna Caballero’s 28th District State Assembly campaign. Caballero’s campaign will pay Kehoe $2,000 a month for the 900-square-foot office.

Not everyone is convinced the deal isn’t just a self-serving move by Kehoe and a risky one by Caballero, considering Caballero as mayor stands to make some hefty decisions that could affect Kehoe’s—and Salinas’—financial future. Even if she wins the Assembly seat in November, Caballero will serve as mayor for the rest of the year, and will play an influential role in what is built in Oldtown.

Caballero’s campaign manager, Rick Rivas, says Caballero’s choice of office space is not political.

“Rick Phinney [Kehoe’s local property manager] gave us a call and told us they had space available,” Rivas says, “so we ended up renting it through Rick Phinney. There was no office space really available downtown.”

Kehoe insists it was Rivas who called Phinney looking for property.

And Caballero’s campaign already has an office in the heart of downtown. In addition to the space Caballero is renting from Kehoe, the campaign has an office in the CHISPA building, at 295 Main St.

Rivas explains that the CHISPA office is too small. “The mayor’s been so successful at revitalizing the downtown that she couldn’t find a place to rent to run her campaign,” he says.

At press time, however, according to the Oldtown Salinas Association’s Web site, there is nearly 15,000 square feet of office space for rent in at least 10 different downtown sites.  

Kehoe says whatever tension may have existed between Caballero and him when the City Council nixed his hotel plan is nonexistent nowadays. “I may have rejected my plan too, if I was in her seat,” Kehoe says.

Within the next couple of weeks, Kehoe says he’ll ask Caballero and the rest of the Council to approve his restaurant/nightclub project in the old bank building where Caballero is a tenant. His goal is to open the restaurant by November.

Greyhound’s lease expires in 2008, but Kehoe hopes the bus station may move out earlier so that he can get started on his new hotel and condo project.

“I’m committed to Salinas,” Kehoe says. “Despite people taking potshots at myself and my vision, a lot of people have begun to say, ‘He’s not half as crazy as he sounds.’”