Downtown Napa will be putting on the ritz.

After a marathon meeting dominated by labor unions advocating a “living wage” and locals pleading for downtown rejuvenation, the Napa City Council approved a 351-room riverfront Ritz-Carlton resort shortly before 1 a.m. Wednesday.

A Florida-based development company will build a posh five-diamond tourist destination costing more than $200 million at the northwest corner of First Street and Silverado Trail, where not long ago garbage trucks parked at night.

Council members and business leaders bestowed accolades, saying the Ritz-Carlton Napa Valley would generate more than 500 jobs, millions in tax revenues and push downtown’s rebirth to a new level.

Councilman Peter Mott said he was initially disbelieving when he heard that Ritz-Carton, one of the globe’s most prestigious hotel brands, had eyes for Napa’s work-in-progress downtown.

“That’s kind of like the average guy being kissed by the prettiest girl in school. It doesn’t happen,” he said.

“I’m more proud than I can explain,” said Councilman Jim Krider, who said that years of planning and incremental improvements to downtown were finally paying off. “This is the best project I’ve ever seen.”

Harry Price, a long-time downtown developer, said the Ritz-Carlton had enough economic clout to boost downtown’ fortunes. “It will change downtown in a way that a lot of people here tonight have waited for for 20 years,” he said.

Environmentalists applauded the Ritz for promising to build to “green” standards and neighbors praised its quality. But the project was challenged by labor unions and social service agencies who wanted the city to mandate a “living wage” of $15 per hour and affordable health insurance for employees.

Napa lost high-paying blue collar jobs when Mare Island Naval Shipyard and Napa Pipe closed, with lower-paying service jobs taking their place, said Martin Bennett, representing Unite Here, a hotel workers union.

With this luxury project, the City Council has the opportunity to insist on wages and benefits that allow workers to live here without relying on welfare services, Bennett said.

The Napa Valley Coalition of Non-profit Agencies echoed the union position. The city should tell developers that “working families are our priority,” said Bob Orser, the coalition’s executive director.

In unanimously approving the project, council members accepted Ritz-Carlton assurances that its pay and benefits would be at the top of the hotel industry, with training and promotional opportunities that could launch careers.

Hotel representatives said the project would create the equivalent of 524 full-time jobs, with 75 percent of workers coming from Napa County. Some 95 percent of jobs will be full-time, with employer-subsidized benefits. Pay would be at the top of the hotel industry. Many of the lowest-paid workers earning $8.53 to $12.10 per hour will have their wages tripled by tips, Ritz officials said.

Council members showed no desire to negotiate wages as part of project approval. “I truly believe the employees will be well compensated,” Mayor Jill Techel said.

Attorney Kevin Teague, representing the developer, said one project should not have to solve a community-wide economic or social problem.

Of the 41 speakers who pushed the hearing past midnight, only a few were Alta Heights neighbors. Several raised traffic, lighting and noise concerns. The hotel will be required to work with the city and neighbors on plans to reduce traffic and prevent overflow parking in residential areas.

The developer, River House Land Company of Miami, will pay $33,441 toward future improvements to the “Five Corners” intersection of Third Street, Coombsville Road, East Avenue and Silverado. Hotel traffic will add seven seconds to the average wait at evening rush hour, a consultant said.

The developer will pay an additional $1.3 million in traffic mitigation to be used anywhere in the city as well as $15,691 toward the planned extension of Saratoga Drive to Silverado.

Concerns about the project’s impact on housing faded when the developer volunteered to pay an additional $500,000, on top of an original fee of $564,000, toward development of affordable rental housing.

Once open, the hotel will generate $400,000 in annual property tax for affordable housing, city officials said.

Francie Winnen, representing Friends of the Napa River, said the Ritz was a “gigantic leap forward” compared to a 351-room hotel approved for the site in 2002 but never built. The developer said the public will be invited to use Ritz pathways to get to a new length of river trail.

Sustainable Napa Valley and build-it-green advocate Bob Massaro gave the project their blessing after the developer agreed to build to national energy conservation standards. The project aims to be certified by Leadership in Energy and Environmental Design, or LEED.

Councilwoman Juliana Inman said the Ritz was a model project, meeting the city’s economic, environmental and social equity goals. “It covers all the bases in what we need from this project and it’s beautiful to boot,” she said.

“This will be a project that shines spectacularly bright for our community,” Councilman Mark van Gorder said.

The Ritz will be a “village-like” complex of a dozen buildings from one to four stories, with a contemporary Craftsman design, the developer said. Grounds will be lushly landscaped with mostly native plants, with an “art walk” open to the community.

The 2002 hotel project covered seven acres. The new developer acquired three additional acres along First, shifting the main entry to First, opposite Juarez Street. Retail shops and a restaurant will run along the south end.

Cars will be largely invisible, with 590 spaces underground and just 14 above. Valets will park all vehicles. The hotel will need to develop a plan for off-site site parking for the largest events.

Despite the recent infusion of new hotel projects, Napa has not seen anything like the Ritz-Carlton, which will be the city’s biggest and fanciest.

The Ritz-Carlton, which will charge around $500 a night, should generate $4.1 million to $5.9 million a year in taxes for the city when it opens in 2011, an economics study said.

Local building trades asked that the developer use local contractors, rather than bringing in workers from afar as some hotel projects have done.

A spokesman for Bell Products of Napa said his company had a chance to land a contract worth more than $20 million to install ducting and mechanical systems in the Ritz.

Construction will take two years with the possibility of earth moving as early as late fall. The start of construction hinges on the project getting financing in a deteriorating lending market. Although the project was billed as costing $200 million, Techel reported Wednesday that the latest cost estimate may be $270 million.

“These are tough economic times. Can you build it?” Krider said.

“Time continues to be our enemy,” said Brad Weiser, the developer’s managing partner. “Every day’s delay is extremely costly to this project.”

River House Land Company intends to partially finance the project by selling 201 of 351 units as hotel condominiums, which would give the buyer limited visitation rights. Hotel condos in premium locations continue to sell well, Weiser said.

Another unknown is whether Unite Here might attempt to mount a referendum campaign against the Ritz-Carlton as it did last month against a proposed Kimpton hotel on Solano Avenue at Wine Country Avenue.

The city is currently evaluating whether there are enough valid petition signatures to put the 196-room Kimpton on the ballot. The union submitted 5,200 signatures, more than the 3,630 required.

Owen Li, a Unite Here organizer, said his union had nothing to say for now about this possibility.