As far as I can tell, the city has established no public process whatsoever to involve the neighborhood. They are holding a "pre-bidder's conference" on Tuesday, January 15 at 11 am at the northeast corner of the parking lot. They have not advertised the meeting at all to local residents, but it's open to the public. I urge any interested neighbors to show up and make clear that the city needs to include us in the land disposition process.
I found these two documents on the city web site:
Request for Proposals RFP #13-53: Davis Square Hotel Project
Legal Notice: RFP #13-53 = Davis Square Hotel Project
Also, here's an earlier City of Somerville page about a Davis Square Hotel, from when the city last tried to interest hotel developers in 2009. This page includes a Hotel Demand Study written in 2007.
[My own personal position: this could be good for Davis Square, but it needs to be designed sensitively, not tower over the rest of the neighborhood, and not present a blank wall to either Day or Herbert street. It's also essential to find a new nearby location for the farmers' market.]
ETA: An earlier discussion of this topic from February 2007.