By Michael Feinstein.
Tonight the Planning Commission will consider the renovation proposed for the famous Miramar Hotel. The proposal has a lot to recommend it — and could lead to a truly great resource for the community.
Among the major issues still under debate – perhaps the most controversial is the proposal to build 60 multi-million dollar luxury condominiums on the top floors of the hotel. This condo proposal needs to be unpacked carefully, because there are a lot of moving parts.
Residents or absentee owners
According to the City’s Staff Report, the proposed condominiums are meant to address one of the housing goals identified in Santa Monica’s Downtown Community Plan (DCP), which governs development in the area, i.e. to
“Encourage…the addition of ownership housing to enhance the district as a stable residential neighborhood.”
But far from stable neighbors, many community members fear these new ‘residents’ will be absentee owners of the super-rich. If that turns out to be the case, do the condos actually address the DCP ‘stable neighborhood’ housing goal?
The developers say that 70% of people who have already contacted the hotel to indicate interest in purchasing a condo are Santa Monica residents. Putting aside the extraordinary heights involved (on the top floors where the condos would be built), one could make a valid public policy argument to allow existing Santa Monica homeowners to sell their homes, downsize and stay in the community by buying one of these condos. Because of this, the Planning Commission should ask Staff to explore tools the City has in promoting local ownership, and the latitude to include them in the Development Agreement governing the project.
But what if not all 60 condo owners end up as stable neighbors — especially after resale(s) — but turn out to be absentee owners? In these situations, the hotel has asked for the right to rent out vacant condos as if they were hotel rooms, and pay the same Transit Occupancy Tax (aka ‘hotel bed tax’) to the City as it would for a hotel room of the same price.
City Staff has correctly stated this would conflict with Santa Monica’s Home-Sharing Ordinance, which requires owners to be living on site when renting out part of their unit, and doesn’t allow homeowners to rent out their homes like hotels. Making an exception for these residents, therefore, would grant them a special privileged status under the law.
Condo advocates respond that these units would be part of a commercial hotel site, not on a single-family, residentially-zoned parcel, so they aren’t the same. Miramar hotel staff are already scheduled to service the condos owners when they are living on-site; and under this additional proposal, would also service ‘guests’ renting the otherwise vacant condos. This is great for more quality union jobs, but further blurs the line of what these units really are.
And if vacant condos can be rented out, isn’t there a financial incentive for the hotel to sell to absentee owners so the hotel (and the City) can make more money renting their vacant units? If we truly want stable neighbors, City Staff needs to also analyze disincentives to absentee ownership – like a vacancy tax – before the plan gets to City Council. It should also explore dedicating such funds received – as well as the real estate transfer taxes from condo sales – to future affordable housing.
Who gets high at the Miramar?
Some say, ‘if these rooms are going to be rented like hotel rooms, why not just make the whole project a hotel?’ The property owners bristle at this suggestion, because selling high-rise luxury condos is a major financing tool for their project. So what makes these condos so valuable? Part of it are the amenities of being on-site at a beautiful hotel. But a big part of it are also the views.
Prior to the passage of the DCP in 2017, the City’s height limit was 84 feet, going back to 1984. The DCP allows for developments on three unique Established Large Sites to go to 130 feet – if they meet specific public policy goals for each site. For the Miramar site, those are affordable housing, public open space, and historic preservation.
The proposal provides land and financing for building up to 42 units of affordable housing across the street from the Miramar. It also retains the historic Palisades building on the Miramar site as part of the hotel – although there remains discussion about how much additional restoration beyond basic preservation of the building should occur.
The proposal also meets the DCP requirement of more than 50 percent open space on the site. The DCP requires a minimum of 25% on ground level and allows for an additional 25% above. The proposal provides for 51% on the ground level – including what will be an incredible new public space around the Landmark giant Moreton Bay Fig Tree. It then has three inviting public spaces above – a Bungalow deck on the second floor at Wilshire and Ocean, an outdoor terrace for the new Fig restaurant location on the second floor at Ocean Avenue and a pool bar and grill on the third floor deck that will also be open to the public – all with ocean views.
Buy the sky and sell the sky
But what the project doesn’t propose are public views and spaces at the top. Those newly created spectacular views on the upper floors are privatized for sale to the very wealthy — whether they are full time, absentee or short term occupants. In return we commoners get truly great public spaces at the lower levels, and a great hotel that generates a lot of tax income for the City.
Is that tradeoff OK? To justify going to 130 feet, the top floor of the proposed project at 5th/Arizona – also one of the three Established Large Sites in the DCP – provides a restaurant/bar and viewing deck open to the public on its top level. Why not a top level public open space at the Miramar to justify its extraordinary proposed height?
Clearly the Miramar wants to dedicate the top floors to the luxury condo-owners – its the most financially profitable to them and the easiest to design. But from a community standpoint, there are only so many times when we will create new spectacular views of our ocean, mountains and sky – some of the very elements of nature that define us as a community. Are we really that desperate that we must sell off this newly created asset in its entirety, and not retain the right to partake in it? Do we really want to look up from Ocean Ave. and say those new great views are only for the super-rich?
In retrospect, the DCP should have been written to specify that Established Large Sites should include at least some public open spaces on the higher levels. But all is not lost. The opportunity to build above 84 feet under the DCP is still a discretionary decision by our public policy makers, and they can insist upon such access and views as a condition of approval for any project that seeks to build so high.
The Planning Commission should ask the developers to find a way to create public access at the top, and the Miramar should do it before it comes to City Council. On such an important project for our community, the Miramar owners should not give the City Council a reason to vote ‘no’. By providing public access to share in these newly created views, they would be providing a big reason to vote ‘yes’.
Michael Feinstein is a former Santa Monica Mayor (2000-2002) and City Councilmember (1996-2004). He can be reached via Twitter @mikefeinstein. ‘Inside/Outside‘ is a periodic column about civic affairs Feinstein writes for the Daily Press, that takes advantage of his experience inside and outside of government.