Ashley Napier, Special to the Daily Press

City Planners have approved plans for a micro-hotel project at the existing Shore Hotel property that will include 34 beds inside a 14 room concept as part of an ongoing settlement issued by the California Coastal Commission due to the unpermitted construction of the original building.

In 2008, Sunshine Enterprises L.P., the development company owned by the Farzam Family, obtained a permit from the California Coastal Commission to construct a low-cost hotel, with room-rates as low as $165 per night. The permit to construct the low-cost hotel expired in 2011, when Sunshine Enterprises failed to fulfill the special conditions of their Coastal Development Permit (CDP). The development firm then constructed the 164-room, boutique, luxury Shore Hotel with rooms going between $300-$800 per night. Sunshine Enterprises received a fine of $15.5 million from the California Coastal Commission over the work.

The Commission’s directive is to protect fair and equitable access to the coast and one method is to ensure moderately priced hotel options are available. The Commission took issue with the fact that The Shore marketed themselves as a “luxury” hotel, instead of a low-cost operation. Sunshine Enterprises also paid a $1.2 million mitigation fee to the city of Santa Monica to remove the city-mandated requirement of the low-cost lodging and accommodations.

The Commission granted after the fact approval, on the condition that the Shore Hotel provide 72-moderate cost rooms, with the inclusion of a 14-room 34-bed “micro-hotel” and a youth-lodging program “to assure access for disadvantaged/underserved youth by providing the opportunity for non-profit organizations and other outdoor educational programs to bring these community members to the coast and stay at no-cost overnight in the micro-hotel for a minimum of 12 nights per year” according to the city Staff Report.

Last week’s Planning Commission meeting included discussion of the micro-hotel and additional requests by the Hotel to add a café, restaurant and spa services.

Sunshine Enterprises requested approval of a 4,000 square foot micro-hotel and asked for flexibility in design standards related to ceiling height. The proposal also asked to convert 580 square feet of existing floor space to create an ancillary nine-seat Café with a patio and alcohol service, convert 800 square feet into a breakfast room with an ancillary 80-seat restaurant with a bar, patio and live entertainment, as well as expand the hotel amenity to include a personal on-site masseuse.

Staff recommended the Commission approve the micro-hotel, believing that it is a “fairly unique concept” that will “incentivize unique lodging” in and around the downtown area, according to Senior Planner, Scott Albright, as well as approve the modifications to the CUP. However, they denied approval for the additional amenities.

Commission discussion focused on the possibility that new amenities would reclassify the hotel as “luxury,” whether the Commission can regulate prices in a private business and whether they can trust an organization that has a history of being a “bad actor.”

The Commission received nearly three hours of public comment from a divided city. Daniel Wilson, a representative of Unite Here, Local 11 — a union that represents hospitality workers, urged rejection of the proposals stating that “it is extremely elusive to regulate what is and is not lower cost,” and that per the terms of the original approval, the Commission should “protect affordability.”

The original permit states that the hotel “does not include a restaurant, bar, conferencing facilities, spa, florist, lounge or similar amenities typically found in more upscale or luxury hotels.”

Some local organizations agreed with Unite 11’s stance, including Downtown Santa Monica who wrote a letter to the commission saying they support the micro-hotel, but “oppose, however, CUP amendments to permit the property to operate additional on-site food and beverage outlets or to offer other luxury services, such as massage or spa treatments,” and “encourage the Planning Commission to deny these requests.”

The Commission did receive calls in support of the project.

Natalie Hubbard, who called to represent the Surf Bus Foundation — a non-profit organization whose mission is “to empower people to have a healing connection with the sea” and is partnered with The Shore Hotel.

Hubbard said to the council that without the approval of the micro-hotel, they would not be able to take advantage of the youth lodging program set out in the conditions of the after-the-fact 2020 CDP and urged the Commission to “give underserved youth access to the coast.”

After five hours of discussion and deliberation, the Commission went to a vote. In a four-to-two vote, the commission adopted the flexibility in design to allow a height variance, with Commissioner Raskin and Commissioner Fresco dissenting. Commissioner Raskin dissented on this, and all following proposals on the basis that he is “not convinced that the environmental impacts of this have been adequately studied under the EIR [Environmental Impact Report] for the DCP [Designated Coastal Project].”

The Commission rejected the café, restaurant and spa services proposal.

The 14-room micro-hotel was approved four-to-one, with the conditions that rooms cannot be enlarged and that for five years, the project’s Emission Reduction Plan and Coastal Commission compliance report be posted to a Planning Commission agenda once per year. Lambert was absent from the final vote, after seemingly becoming frustrated with the Commission’s slow-pace and Raskin dissenting.

Planning Commission’s votes were not the final approval for the proposals as City Council has ultimate authority over the proposed changes to construction and as the adjudicating agency if the developer appeals the Commission’s rejection of their expanded amenities.