File photo
File photo

One of the city’s smaller, but more contentious developments is before the Planning Commission this coming Wednesday evening. It’s the granting of a conditional use permit (CUP) for alcohol service at the Palihouse Hotel (formerly Embassy Hotel and Apartments) at 1001 Third St.

Palihouse is in the middle of an R3 residential neighborhood at the intersection of Washington Avenue — surrounded by apartment buildings. There’s a senior living center across the street. The 38 guest room hotel has only one on-site parking space.

The owners of this boutique hotel (where rooms cost $300 per night and up) also own another hipster hotel in West Hollywood known for its “cool vibe.”

Santa Monica Palihouse owners (1001 Third Street, LLC) are requesting a CUP to allow “on-site sales, dispensing, and consumption of a full line of alcoholic beverages to hotel patrons and their guests in hotel common areas” which are described as a lobby/lounge area, a 6,500-square-foot front outdoor garden area, a rear outdoor patio and including room-service daily, between 6 a.m. to 2 a.m.”

A local CUP is necessary for a type 70 California Alcoholic Beverage Control license for general on sale alcohol services as well as a Type 66 license that allows in-room access (mini-bar) to alcoholic beverages for consumption within guest rooms.

Palihouse’s neighbors have complained that the recent conversion of a quiet apartment building into full-fledged hotel with virtually no on-site parking but with food services, valet and other hotel amenities has negatively impacted their quality of life.

Now, Palihouse’s owners want to add alcohol 20 hours a day. The nuisance situation will not improve when (or if) the booze starts flowing and will make things much worse for already impacted neighbors.

The site has a controversial history. The Embassy was built in 1927 as an apartment building. In 1979, its former owners registered all 38 units as apartments. Rent control fees were paid on them for 20 years.

In 1980, a request for a hotel exemption was denied by the Rent Control Board. The owners failed to provide any evidence units qualified as hotel rooms.

In 1995, an overlay was created that grandfathered “legally existing hotels” in the R3 zone. The Embassy was an apartment building at the time, however six rooms were illegally being used as short stay hotel rooms.

A dispute between City Hall and the then Embassy owners arose over the property’s status as a hotel in 1998. Both parties entered into settlement agreements in 2000 and again in 2011 which resulted in City Hall selling out residential neighborhoods for commercial activity by agreeing that the Embassy Apartments had a right to operate a hotel.

The city attorney should have instead told Embassy owners to “fly a kite” because they were illegally renting out apartments as hotel rooms without a hotel permit or business license. The settlement included a provision to allow the illegal conversion of 19 rent-controlled apartments into hotel guest rooms.

Even though the Embassy had no legal standing as a hotel, that didn’t stop City Hall from negotiating away the peace and quiet of a residential neighborhood without any public notice, process or review. Absolutely disgusting, but par for the course.

Another closed door “secret” settlement agreement was entered into in 2011. It totally ignored City Hall zoning codes which state that neighborhoods must be protected from commercial hotel businesses expanding into residential zones.

The present owners purchased the Embassy in 2012, and renamed it Palihouse, They renovated the property and added guest perks including a lounge, indoor and outdoor dining and other amenities. Three actual rent controlled apartments remain. And, because City Hall claims hotel activity is a “permitted use,” neighbors and residents were screwed, again.

As usual, anything hated by residents is supported by staff. This alcohol CUP is no exception although staff recommends conditions for CUP approval such as limited hours of alcohol service — 11 a.m. to 2 p.m. and 4 p.m. to 7 p.m. outside, extending to 9 p.m. inside.

These conditions and regulating the number of patrons/guests will never work. Hotel guests could host a reception in the front patio with 70 to 100 invitees in attendance. Most of the conditions staff recommends will never be enforced because everyone is a “guest of a hotel guest.”

Who’s going to monitor the hours when alcohol is permitted? Surely not city staff. And, City Hall has a miserable record of enforcing conditions such as these. Complaints will go un-penalized — and neighbors will suffer.

Bottom line: an alcohol CUP/license will exacerbate a non-conforming use, is inconsistent with the Land Use and Circulation Element (LUCE) of the General Plan that protects residential neighborhoods from commercial intrusion and sets a bad precedent for additional hotel conversions which is why it must be flat-out denied.

Residents are now acutely sensitive to threats to our unique quality of life as evidenced by the recent petition drive to overturn the massive Bergamot Transit Village (BTV) development. Because of rumors that three planning commissioners may run for City Council this fall, we’ll all be watching this closely.

A big shout out to neighborhood leaders Armen Melkonians, Kate Bransfield and all of you who circulated — and signed — petitions to overturn the council’s approval of the massive project.

A total of 13,440 signatures were collected. It’s an embarrassing repudiation of city management, Planning Director David Martin, planning staff and the four city councilpersons (out of seven) who support hideous, traffic generating, overly large or inappropriate developments like Palihouse.



Bill can be reached at

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