City Council
Report
City Council Meeting: April 26, 2022
Agenda Item: 6.A
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Introduction and First Reading of an Ordinance Amending Santa Monica Municipal Code (SMMC) Section 9.08.020; and Appeals of Planning Commission's Denial of Two Conditional Use Permits to Allow Meal and Alcohol Service to the General Public at the Oceana Hotel’s Existing Restaurant
Recommended Action
Staff recommends Council take the following actions:
1. Adopt the determination that the proposal to open the Oceana Hotel’s existing restaurant to the public is exempt under CEQA Guideline Section 15301 (Class 1) for Existing Facilities, in that the project involves the operation, repair, maintenance, permitting, leasing, or licensing of an existing hotel to extend its guest-only meal and alcoholic beverage services to the public in its existing onsite restaurant;
2. Introduce for first reading a proposed ordinance to amend Santa Monica Municipal Code Section 9.08.020 to establish a Conditional Use Permit (CUP) requirement for an existing legal, nonconforming hotel restaurant located within the R2 and R3 zoning districts to request approval to provide meal service to the general public, provided that certain criteria are met;
3. Grant the appeals of Planning Commission’s denial of two Conditional Use Permits associated with the Oceana Hotel’s request to 1) provide meal service to the general public pursuant to the proposed text amendment; and 2) modify the hotel’s existing alcohol CUP to provide service to the general public;
4. Approve Conditional Use Permits 20ENT-0237 and 21ENT-0090; and
5. Approve the Statement of Official Action.
Executive Summary
City Council is being asked to approve a proposed Zoning Text Amendment (20ENT0236) and two Conditional Use Permit applications (20ENT-0237 and 20ENT-0091) in 2 of 36
response to applications filed by the owner of the Oceana Hotel, located at 849 Ocean Avenue
The Oceana Hotel’s Request
The Oceana Hotel is a 70-room hotel located in the R3 (Medium Density Multi-Family Residential District). At the time the hotel was built in 1958, lodging was a permitted use in the zone. Today, new hotels are not permitted in the R3 District, and the Oceana Hotel is classified as a legal, non-conforming use.
The Oceana Hotel has an existing restaurant with food and beverage services that can only be offered and available to the hotel’s guests and their visitors. The Oceana now proposes to offer food and beverage services in its existing restaurant to members of the general public. The restaurant would not increase in size or capacity.
As a legal nonconforming use, the City’s current regulations prohibit the Hotel from extending the existing restaurant’s services to the general public. The applicant has proposed a Text Amendment that would create the opportunity to extend its existing restaurant meal and alcoholic beverage services to the general public. The service enhancement would increase the economic viability of the existing restaurant and support one of the hotel’s goals of being a local and favorite dining option for the surrounding neighborhood.
The proposed Text Amendment, as modified by staff, would amend land use regulations in the Zoning Ordinance, specifically Santa Monica Municipal Code “SMMC” Section 9.08 (Multi-Unit Residential Districts), to allow an existing legal, nonconforming hotel restaurant located within the R2 and R3 zoning districts to provide meal service to the general public, subject to approval of a Conditional Use Permit (CUP). The text amendment would limit such requests to a legal, nonconforming hotel that has an existing restaurant that currently provides full sit-down meal service and has an existing alcohol CUP. Upon review of potentially eligible hotels, the Oceana Hotel is the only hotel currently in the R2 or R3 Districts that meet these criteria. The 3 of 36
CUP requirement will provide an opportunity for public review and input on the hotel’s request to ensure neighborhood needs are understood and addressed.
Consistent with the staff-recommended CUP requirement that would be established by the proposed Text Amendment, the applicant filed for new Conditional Use Permit 21ENT-0090 to open the Oceana Hotel’s existing restaurant to the general public within established indoor and outdoor dining facilities on the hotel property.
The applicant also filed Conditional Use Permit 20ENT-0237 to amend the hotel’s existing Conditional Use Permit 96CUP-009 associated with its current ABC Type 70 alcohol license to provide alcohol service to the general public with the hotel’s fullservice restaurant meal service with an ABC Type 47 alcohol license (On-Sale General – Eating Place).
The Planning Commission’s Consideration and Applicant Appeal On June 9, 2021, the Planning Commission held a public hearing to: 1) make a formal recommendation to the City Council on the proposed Text Amendment; and 2) consider the CUP applications. Staff outlined its support for the proposed Text Amendment and also recommended that the Planning Commission vote to approve the two CUP applications, with the express limitation that such approvals would only be valid upon City Council approval of the Text Amendment.
As discussed more fully in this report, the Planning Commission, by a vote of 3-3, did not recommend that Council approve the Text Amendment. The Planning Commission also reviewed and took a formal action to deny the Oceana Hotel’s requests for approval of the two CUP applications, primarily based on its failure to recommend that the City Council approve the text amendment necessary to allow the CUPs to move forward.
The applicant filed two timely appeals of the Planning Commission’s denial of the CUP applications, arguing that there is ample evidence in the record to make the findings for both applications. Moreover, the appeals state that the applicant fully supports the full 4 of 36
range of both the staff-recommended conditions and recommended conditions included in the Planning Commission’s denial of the CUPs that directly address project operations to ensure that the restaurant’s service to the public would be appropriately managed without creating impacts to the neighborhood.
The Planning Commission’s recommendation to deny the Text Amendment is not subject to appeal because the Planning Commission only provides a recommendation to the City Council for its consideration.
The Council’s Considerations
The City Council is being asked to consider whether to:
• Approve the Text Amendment based on the findings set forth in the proposed Ordinance provided in Attachment “A”; and
• Grant both appeals and approve both CUP applications based on the findings and conditions of approval provided in Attachment “B”.
The approvals for the CUP applications would not become effective unless and until the proposed Text Amendment is adopted by the City Council and the enabling ordinance becomes effective, 30 days after second reading.
The following issues that are addressed in this report should be considered by the City Council in its review of the proposed Text Amendment and CUPs:
• The appropriateness of the proposed Text Amendment to allow existing legal nonconforming hotels in the R2 or R3 Zoning Districts to apply for a CUP to expand its existing full-service restaurant to the general public, provided certain criteria are met.
• The appropriateness of extending existing guest/visitor only alcohol service to the general public in conjunction with full-service restaurant meal service within an existing legal nonconforming hotel located within the R2 or R3 Zoning Districts. 5 of 36
• The effectiveness of the recommended conditions of approval in minimizing any potential adverse impacts to the surrounding residential neighborhood in conjunction with the proposed expansion of meal and alcohol service to the general public.
The City Council’s Consideration and Settlement
On November 23, 2021, the City Council considered the Text Amendment and the appeals of Planning Commission’s denial of the two CUP applications. A motion to introduce the Text Amendment for first reading failed by a 3-3 vote, with one council member absent. Without the Text Amendment, the proposed use would not be conditionally permitted within the applicable Zoning District. Because the Council did not introduce the Text Amendment for first reading, the two appeals could not be upheld, and the CUP amendments could not be approved. Thus, Council voted to deny the appeals and the CUP applications by a 5-1 vote, with one council member absent.
On February 22, 2022, the City Council, by a 7-0 vote, approved a settlement with the applicant that would result in termination of threatened litigation over alleged procedural irregularities in the City Council’s proceedings on November 23, 2021. Under the settlement, the City Council agreed to conduct a de novo hearing to consider anew the Text Amendment and appeals of the Planning Commission’s denial of the two CUP applications. The settlement requires the City Council to conduct the de novo hearing prior to June 30, 2022 with all seven City Council members present.
Background – Project Site Information
Zoning District Medium Density Residential (R3)
Land Use Element
Designation
Medium Density Housing
Parcel Area (SF)/Dimensions 30,000 square-foot rectangular lot / 200’ W x 150’ D Existing On-Site
Improvements
Approximately 62,200 square-foot 3-story, 70-room
hotel above subterranean parking level
Rent Control Status Exempt - Commercial Property
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Adjacent Zoning Districts &
Land Uses
North: R3 – Multi-Unit Residential
East: R3 – Multi-Unit Residential
South: R3 – Multi-Unit Residential
West: OS-BCH – Palisades Park
Historic Resources Inventory The building not listed on the HRI.
Site Location Map:
The Oceana Hotel is located at the northeast corner of Ocean and Idaho Avenues within the R3 (Medium Density Residential) Zoning District. The site is surrounded by multi-family residential buildings along its north, south, and east sides, but fronts Palisades Park and the ocean) along its west facade. There are preferential parking restrictions on Idaho Avenue between Ocean Avenue and 4th Street, and on other streets in the immediate area, which limit parking without a permit between the hours of 6pm and 8am daily.
Ocean Ave
Idaho Ave
Palisades Park
Oceana Hotel
2 nd St
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Background – Hotel Use and Zoning
The parcel at 849 Ocean Avenue was developed in 1957 with a 3-story, 192-room, 60 family apartment building above a subterranean parking garage within the R4 zoning district. In May 1958, the apartment began its transition into a hotel. Under the Hotel’s zoning designation at the time, both apartment buildings and hotels were permitted land uses.
Over a span of many years, the hotel use has been constant and continuous, but the underlying zone of the property has changed, along with associated regulations for those designations, resulting in the hotel identified at different times as a permitted use, a legal nonconforming use, and an allowed use (Limited Use authorized subject to certain limitations), as more fully explained in Attachment “H”.
Today, the 70-room hotel maintains a central courtyard with a pool that is the hotel’s primary public space. Entries to all rooms/suites are accessible from interior corridors. The building’s subterranean parking is accessible from the adjoining First Court alley at the rear. The building design and configuration minimizes potential noise impacts to within the hotel interior spaces and helps prevent noise from impacting nearby residential buildings.
As a boutique hotel, a range of amenities were established and incorporated into the existing menu of services and amenities to enhance guest experience, including an onsite restaurant, food service, alcoholic beverage service in common areas, in-room mini bar, pool, excursion/sightseeing packages, spa/massage services, event planning, transportation connection, among others.
For many hotels that have long been in continuous operation, these amenities predate specific zoning requirements, including the need for separate review, approval or entitlement applications, such as a CUP. The Oceana Hotel is no different. For example, the hotel possesses an onsite restaurant, an ABC Alcohol License Type 70, and Conditional Use Permit (96CUP-009) that allow the operator the ability to provide meal and alcoholic beverage services to its guests and their visitors in the restaurant 8 of 36
and in certain common areas, such as around the pool deck, including the ability to supply alcoholic beverages in refrigerators/mini bars, and in-room through room service. The existing alcohol service within the aforementioned areas will be maintained to hotel guests.
In addition to the Alcohol CUP noted above for the Oceana Hotel, other relevant permits and approvals include the following:
• 95ARB-185: façade remodel and interior renovation of hotel). • 95TA-005 & 006, 95ZC-001, 95GPA-001: associated with Ordinance 1832 (CCS).
• 06TA-003 & 06VAR-012 associated with Ordinance 2213 (CCS); o created seven additional guest rooms within the existing floor area; o Variance to waive the requirement to provide seven additional parking spaces.
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Figure 2: Site plan highlighting the existing onsite restaurant space and patio dining area and other features that are part of the hotel guest amenities. 10 of 36
Figure 3: Exterior Elevations along Ocean and Idaho Avenues (June 2018).
Project Analysis
The applicant’s proposal to open the Oceana Hotel’s existing full-service restaurant to the general public and to provide associated alcohol service with its meal service would require review and approval of the following three applications which are each discussed in this section of the report:
1. Text Amendment ( 20ENT-0236) to modify SMMC 9.08 and associated land use regulations to establish a new CUP requirement for existing hotels located in the R2 and R3 Zoning Districts to open its existing restaurant to the general public provided that the following criteria are met:
a. The hotel use was established and in existence as of January 1, 1995; 11 of 36
b. The Alcohol Conditional Use Permit allowing the onsite service of alcoholic beverages to hotel guests and their visitors in guest rooms and in certain common areas was approved by the City prior to July 23, 2015; and c. The hotel’s existing restaurant prepares meals to order from a set menu in an existing hotel kitchen for consumption on the premises; provides sit down meal service during restaurant operating hours for breakfast, lunch and dinner; and the hotel’s ancillary restaurant use has existed since prior to July 23, 2015.
2. Conditional Use Permit (21ENT- 0090) to authorize the Oceana Hotel to open its onsite restaurant to the general public, subject to operational conditions of approval and contingent on Text Amendment approval; and
3. Conditional Use Permit (20ENT-0237) to amend the hotel’s existing alcohol CUP (96CUP-009) to provide alcohol service to the public as part of the hotel’s restaurant meal service, subject to operational conditions and contingent on Text Amendment approval.
Overview of Proposed Text Amendment
The applicant’s proposal to open its existing onsite restaurant to the general public would be considered an intensification of the legal nonconforming hotel use under SMMC 9.27.050(E). Intensification of a legal nonconforming use is generally prohibited; however, consistent with the principles set forth in SMMC Chapter 9.27, which sets forth the Zoning Ordinance’s Nonconforming Uses and Structures provisions, the City has the ability to determine whether a certain amount or type of intensification of use may be permitted. Accordingly, the proposed Text Amendment as modified by staff, provides an opportunity to extend the operations of an existing restaurant in a legal nonconforming hotel to the general public, but also includes a process to evaluate and impose operational conditions that may be needed to manage this type of proposed incremental expansion of the hotel’s existing restaurant meal service.
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The Text Amendment would not allow for an expansion of an existing restaurant, nor would it change the underlying identification of Hotels and Motels as a prohibited use in the R2 and R3 Zoning Districts. The proposed approach is designed to permit only a modest incremental change in operations, and stands in contrast to a more impactful scenario where an existing legal nonconforming hotel may seek to establish wholly new restaurant meal service and alcohol service where none historically has been provided on site.
Similarly, as noted in the Background section of this report, the Oceana Hotel was permitted to add/create seven guest rooms with the adoption of a 2006 Text Amendment that specifically allowed this expansion of the existing legal nonconforming hotel.
The draft Text Amendment presented in this report reflects staff-recommended revisions after evaluating the applicant’s original proposal, the overall goal and intent for the request, and considering the potential impacts and benefits of the request to allow the Oceana Hotel to open its existing guest-only restaurant to the public.
The proposed amendments to SMMC Section 9.08.020 and Table 9.08.020 regulating land uses within the Multi-Unit Residential Districts is provided in Attachment “A”.
Purpose of Creating a New Conditional Use Permit Requirement The Text Amendment proposes a new Conditional Use Permit requirement to provide a discretionary process to review the necessity of special conditions to manage potential impacts to the surrounding neighborhood. The proposed Text Amendment would amend SMMC Section 9.08 (Multi-Unit Residential Districts), specifically SMMC Section 9.08.020 – Land Use Regulations – to establish a Conditional Use Permit requirement for an existing hotel restaurant located within the R2 and R3 Zoning Districts to request approval to provide sit down meal service to the general public provided that certain criteria are met.
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The new CUP application requirement recommended under the proposed Text Amendment requires the hotel’s request to be reviewed and approved by the Planning Commission in a noticed public meeting. If adopted by Council, the new CUP requirement would create a clear process for a legal non-conforming hotel to request changes that involves public participation in order to hear, collect, consider, and incorporate feedback from community members at large and from those who live in the neighborhood.
The input raised by residents and the neighborhood is important to consider in the context of a public hearing. For this reason, requiring a new CUP to open the existing restaurant to the public is a sensible requirement in addition to the standard requirement for amending an existing alcohol CUP when a change in license type or a substantial change in mode or character of the alcohol service is proposed. The CUP process allows for public input during a public hearing regarding proposed hotel operations. Moreover, the CUP process provides an opportunity for the Planning Commission to impose additional operational conditions as necessary in order to mitigate potential commercial-related impacts and protect the integrity of the residential neighborhood. Staff-recommended conditions are presented for consideration later in this report.
Criteria for Requesting a Conditional Use Permit
The Text Amendment provides three criteria that must be met in order for a hotel property to be eligible to apply for a CUP to open an existing hotel restaurant to the general public in the R2 and R3 Zoning Districts. These criteria are recommended in order to ensure that such a request is an incremental expansion of an existing, ancillary hotel amenity versus a request to initiate a broader expansion of brand new food service activities that could result in greater impacts to the neighborhood:
1. The hotel use was established and in existence as of January 1, 1995; 14 of 36
2. The Alcohol Conditional Use Permit allowing the onsite service of alcoholic beverages to hotel guests and their visitors in guest rooms and in certain common areas was approved by the City prior to July 23, 2015; and
3. The hotel’s existing restaurant prepares meals to order from a set menu in an existing hotel kitchen for consumption on the premises; provides sit down meal service during restaurant operating hours for breakfast, lunch and dinner; and the hotel’s ancillary restaurant use has existed since prior to July 23, 2015.
Proposed Criterion 1: The current Text Amendment proposal aligns with the general construct established in 1995 that acknowledged hotels that were in existence as of January 1, 1995 were deemed to be an allowed use and differentiated from a new hotel use which remained a prohibited use in the R2 and R3 Zoning Districts. The purpose of this criterion is to establish parameters for applicability that are tied to the historical evaluation of lodging in the multi-unit districts where the continuation of this use has been deemed to be appropriate based on having a longstanding presence in the neighborhood without causing significant or adverse impacts to the area.
Proposed Criterion 2: The requirement to have an alcohol CUP that was approved prior to the adoption of the 2015 Zoning Ordinance Update, when hotel uses in the R2 and R3 Districts were deemed legal nonconforming, reinforces the incremental or modest nature of the requested expansion of alcohol service at the property subject to a discretionary public hearing, in contrast to allowing the potential for initiating brand new alcohol service where no alcohol service is currently authorized on the property in any form. Hotels and motels with existing guest-only alcohol service would be required to amend its existing CUP in order to permit the extension of alcohol service to the general public in conjunction with its existing restaurant meal service.
Proposed Criterion 3: This criterion requires that a hotel’s existing restaurant prepares meals to order from a set menu in an existing hotel kitchen for consumption on the premises; provides sit down meal service during restaurant operating hours for breakfast, lunch and dinner; and the hotel’s ancillary restaurant use 15 of 36
has existed since prior to the effective date of the 2015 Zoning Ordinance Update, and is similarly designed to reinforce the incremental or modest nature of a requested expansion of restaurant service to the general public.
Oceana’s Eligibility Under Criteria
Staff has reviewed the Oceana Hotel’s permit history and operations to confirm that the property meets all three criteria:
1) Oceana Hotel was established prior to 1995;
2) The hotel serves alcoholic beverages to guests and their visitors under ABC Type 70 and an approved CUP as of July 23, 2015. The Oceana Hotel currently holds an ABC Type 70 alcohol license which provides the ability for the hotel to supply alcoholic beverages in refrigerators in guest rooms and serves alcoholic beverages within specified common areas within the hotel’s property.
The associated Conditional Use Permit 96CUP-009 was approved by the Planning Commission on August 7, 1996 and places limitation on alcohol service only to registered guests and their visitors.
3) The hotel is equipped with an existing kitchen that currently prepares meals for breakfast, lunch and dinner service as part of their onsite guest amenity as of July 23, 2015. Based on permit record review, the onsite restaurant and kitchen has been in existence in one form or another on the hotel’s property for at least 15 years.
Eligibility of Other Hotels in the R2 and R3 Districts
The implications of the proposed Text Amendment on other existing hotel located in the R2 and R3 Zoning Districts was raised by Wilmont Neighborhood Group members and residents during a meeting with City staff prior to the Planning Commission hearing and also during public testimony. Staff has compiled a list of hotels/motels in the R2 and R3 Zoning Districts as provided below. The proposed and qualifying criteria 1-3 were applied to the seven hotels/motels identified in the chart. Only one hotel meets 16 of 36
all three criteria and therefore qualifies to apply for a Conditional Use Permit to open its existing onsite restaurant to the public.
Name Zone
Existing
Hotel in
Operation as
of January 1,
1995
Hotel’s
Ancillary
Restaurant Use
Established
prior toJuly 23,
2015
Existing
Alcohol
CUP
Approved
prior to
July 23,
2015
Palm Motel
2020 14th Street
R2 Yes No No
Rest Haven Motel
815 Grant St
R2 Yes No No
Oceana Hotel
849 Ocean Ave
R3 Yes Yes Yes
Cal Mar Hotel
220 California Ave
R3 Yes No No
Sea Blue Motel
1670 Ocean Ave &
28,36 Arcadia Terrace
R3 Yes No No
Palihouse Hotel
1001 3
rd Street
R3 Yes No No
Pavilions Motel
2338 Ocean Park Blvd
R3 Yes No No
Table 1: Existing legal nonconforming hotels/motels in the R2 and R3 zones (May 2021).
Analysis of Proposed CUP for Restaurant Service & Potential Neighborhood Impacts Although the Oceana Hotel existed briefly as an apartment building, it has been in continuous operation as a hotel since 1958. In its 63-plus years, the hotel has developed and implemented a range of guest-related services and amenities typically available at a boutique hotel of this kind, including an onsite restaurant. Because these services and amenities are generally viewed as customary and since the hotel is an older establishment, many of these services/amenities predate coderelated requirements.
The Oceana filed a similar proposal and application in April 2015 to open the restaurant to the public, but the application was withdrawn in August 2015. Although 17 of 36
the processing of this application was not completed, this demonstrates the ownership’s long-standing interest in opening its restaurant to the public and is responsive to the consistent inquiries the hotel has received from nearby residents who have expressed interest in having this dining experience in their own neighborhood. 18 of 36
Figure 4: Images of the dining room and patio dining area in courtyard.
As was shared by the applicant, the purpose of the Text Amendment and CUP application is to allow the restaurant to become a local- and neighborhood-serving amenity that can offer residents a new dining option and experience. Similarly, the restaurant is permitted to offer meals for takeout, which is customary and considered ancillary to the established use.
Also expressed by the ownership, like so many other hotels and businesses in the hospitality industry, the Oceana Hotel has been financially impacted by the Covid-19 pandemic since its success is directly linked to the traveling public. Opening the restaurant and extension of its services to the public would assist in its economic recovery effort.
On the other hand, the hotel is located within the R3 Residential District surrounded on three sides by mostly two- to four-story multi-unit apartment or condominium buildings and faces Palisades Park. The neighborhood is located a couple of blocks north of Downtown Santa Monica. For this reason, the proposal to open the hotel’s existing restaurant to the public may be seen as another layer of 19 of 36
commercial intrusion into a residential zone. The applicant team reached out to immediate neighbors to gauge the level of support or opposition and on April 6, 2021, the applicant team met with the Wilmont Neighborhood Group to share the details of the proposal, hear concerns, and gather input from the community.
In summary, there is both support for the request from the community and also concern over commercial intrusion and impacts associated with potential noise, traffic/circulation, parking, deliveries, and other commercial activity-related matters, including the concern that this proposal would create an authorization for other existing hotels in the R2 and R3 Zoning Districts to create new restaurant and alcohol service where none currently exists.
Figure 5: Dining Room and Patio Dining Layout – Combined Dining Area 1,556 SF / 67 Seats Restaurant/Dining Room Patio Dining (in courtyard)
1,072 SF / 49 seats 484 SF / 18 seats
The existing restaurant dining room is approximately 1,072 SF and accommodates up to 49 seats. An outdoor dining patio located next to the pool and in the courtyard is also available for restaurant dining. This space is about 848 SF with 18 seats. Both 20 of 36
dining spaces and layout are shown above in Figure 5. The combined restaurant dining space totals 1,556 SF and 67 seats. A restaurant waiting area is also shown in the lobby.
The restaurant is located along the front primary façade next to the lobby facing Ocean Avenue and by extension Palisades Park across the street and can be seen from the public right-of-way. Its entry and access to the dining patio can only be achieved internally by going through the hotel lobby and turning right into the courtyard. This layout seemingly prevents restaurant guests from waiting or entering on the exterior street facade of the restaurant or queuing in the public right-of- way and potentially generate noise impacts to adjoining residential buildings.
Noise generated from the interior of the restaurant, and particularly the outdoor dining patio will be contained within the central courtyard and will be minimized to nearby buildings. Further, the location of the primary entry for hotel and restaurant guests is located approximately midway on the front façade and away from the periphery of the building closest to the north and south residential buildings and by design will help limit noise impact to those residents. The hotel’s primary facade fronting Palisades Park is also a benefit as it ensures that no residential buildings or residents will be impacted by the restaurant.
The hotel, as a commercial entity, has continually existed next to and among its residential neighbors for over 63 years without creating significant adverse quality of life impacts on the surrounding neighborhood. In past years, there have been some violations relating to exceeding construction hours or some aspects of the valet service, but all were resolved in a timely manner. The hotel property is fully built out and is legal, nonconforming with respect to aspects such as setbacks, building height, and parcel coverage. It is unlikely that other significant improvements are possible or will be pursued in the future within the envelope of the existing building. Nonetheless, a variety of qualify of life concerns were expressed by nearby residents and the surrounding neighborhood relating to potential noise impacts generated by additional restaurant guests as well as competition for limited parking and circulation in and 21 of 36
around the hotel. The Planning Commission’s recommended conditions of approval are intended to address and are reflective of these concerns.
Parking and Access
The 70-room hotel provides 66 parking spaces (58 striped and 8 in drive aisles through valet) in its subterranean parking garage. The existing onsite restaurant in its current operation with meal service limited to hotel guests is a hotel amenity. It is not considered a separate stand-alone business. Parking at the facility is exclusively valet operated. A Mobility Division-approved valet plan (20AVP-0005) is on file for this property. The combined square footage of the existing restaurant, including patio dining is 1,556 square feet. In terms of opening the existing restaurant to the public, additional parking would be calculated at 50% of the rate of one space per 300 square feet. This would result in a total of 2.5 spaces, which is rounded up to 3 spaces.
Additional parking is not required for this proposal pursuant to SMMC Section
9.28.020(B)(2), which waives the parking requirement for up to three spaces.
However, from a practical standpoint, in order to assess whether the applicant’s proposal would be impactful to the neighborhood, staff evaluated the earlier parking analyses prepared for the property associated with prior applications and requested additional information to assess parking utilization prior to March 2020 and now, as lodging and hospitality activity is on the rise. Based on this review, while additional parking is not required by code, the hotel’s existing parking supply can satisfactorily accommodate an incremental increase in activity at the property associated with opening the existing restaurant to the public based on a substantial decrease in parking demand generated by the primary lodging use due in large part to the prevalence of ride-hailing/transportation network companies like Uber and Lyft that serve visitors and tourists in destination communities like Santa Monica.
In 2006, the Planning Commission approved a parking variance (06VAR-012) and Text Amendment (06TA-003) to allow the addition of seven guest rooms (from 63 to 70 rooms) without providing additional parking based on a parking demand study prepared by Linscott, Law & Greenspan, which concluded that with 70 guest rooms, 22 of 36
the hotel would generate a peak parking demand of 49 parking spaces (measured at 1 a.m.); thereby, 17 spaces would remain unoccupied. This demand is below the 66 onsite parking spaces that can be provided in the subterranean garage in conjunction with valet parking operation. At that time, staff verified that the parking spaces are never fully occupied even when the hotel is fully booked, and it was noted that the hotel does not offer banquet facilities or meeting rooms that could generate parking demand beyond the level that can be accommodated by the onsite parking facility.
A more recent parking count conducted in 2015 also by Linscott, Law & Greenspan found that from Thursday, May 7, 2015 through Saturday, May 9, 2015 between the hours of 6:00 AM and midnight, it was observed that the peak parking demand was 29 spaces. During the same time period, it was also noted that the hotel occupancy ranged between 93% and 100%. Between the 2006 and 2015 parking study, the advent and increased popularity of ride hailing services such as Uber (founded in 2009) and Lyft (founded in 2012) have significantly decreased guests’ reliance on the hotel’s onsite parking. Both parking studies were completed prior to the pandemic under the same condition further ensuring their accuracy.
In the intervening years since the 2006 and 2015 parking studies, the hotel has remained unchanged in terms of the number of rooms and the guest services/amenities it provides. It is reasonable to anticipate that opening the existing restaurant to the general public has the potential to generate additional parking demand, however, the applicant maintains that over the past five years, the hotel’s parking garage has been typically less than 50% utilized, which is consistent with and supported by the Linscott, Law & Greenspan 2006 and 2015 parking studies.
Regarding anticipated parking demand associated with a restaurant opening to the public, although additional parking is not required for the proposed change of use from a guest- serving restaurant to a restaurant that will open to the public, it is also worth noting the following:
• Hotel guests can be restaurant guests.
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• The hotel is located in close proximity to downtown and will benefit from the “park once”, many destinations approach to parking generally employed by visitors to downtown.
• The hotel is located in a residential neighborhood and is likely to attract nearby residents who can walk or bike to the restaurant.
• The surrounding neighborhood is generally regulated by preferential parking with the exception of Montana Avenue further north and Ocean Avenue where there are metered parking spaces across the street adjacent to Palisades Park.
These preferential parking districts further safeguard the neighborhood from new and potential impacts relating to noise, parking and circulation. • There has been decreased parking demand at the hotel due to the advent and popularity of ride hailing services such as Uber and Lyft and bikeshare programs and scooters.
• The hotel is located near/along a protected bike path making restaurant easily accessible.
Based on an evaluation of the hotel property configuration, it does not appear that additional onsite parking can be accommodated. The hotel’s parking supply can be managed to support opening the existing onsite restaurant to the public.
Furthermore, as presented in the next section of the staff report addressing staffrecommended conditions, the hotel would be required to implement an incentive program for customers to walk or bicycle to the restaurant from the surrounding neighborhood and maintain a valet service to continue to manage its existing parking resource effectively. Please see Attachment “G” for background information about parking at the hotel.
Analysis of Proposed Alcohol CUP Amendment
The applicant proposes to amend the existing Conditional Use Permit 96CUP-009 that has been integrated with the hotel operation and services since 1996. This alcohol CUP and related ABC Type 70 License (On-Sale General – Restrictive Service) permitted the hotel establishment to serve alcoholic beverage to its guests 24 of 36
and their visitors in certain common areas, such as around the pool deck, including the ability to supply alcoholic beverages in in-room refrigerators/mini bars, and in guest rooms through room service. The existing alcohol service within the aforementioned areas will be maintained for hotel guests. The proposed alcohol CUP amendment only proposes to authorize alcohol service to the general public in the areas shown on the plans, specifically, the restaurant and outdoor patio dining area in conjunction with meal service.
The amendment to the existing CUP is necessary in order to allow the hotel the ability to extend alcohol service to the public and to align with the proposed meal service in its restaurant, and any approval would be contingent on Council also approving both the Text Amendment and CUP for opening the restaurant to the public. If approved, the Oceana Hotel will apply for an ABC Type 47 (On-Sale General – Eating Place) license. As this is a customary alcohol license for restaurants, staff supports the proposed CUP amendment of 96CUP-009 subject to the operational conditions presented in the next section of this report.
Summary of Planning Commission Action and Community Input On June 9, 2021, the Planning Commission conducted a public hearing and considered Text Amendment 20ENT-0236 and Conditional Use Permits 20ENT-0237 and 21ENT-0090. Following an extensive policy discussion about the Text Amendment and review of the operational parameters for the restaurant in conjunction with the Conditional Use Permit applications, the Commission was split, as was the public sentiment about the project. A total of 31 emails were received and 15 were in favor, while 16 were against the proposal. During the hearing, 26 callers registered to speak and provide public comments that supported and opposed the proposal for a variety of reasons noted below.
During the deliberation, several key issues were raised, including:
• Discussion regarding whether the project qualifies for a CEQA Class 1 Exemption;
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• Whether the proposed Text Amendment constitutes “spot zoning” since it may only benefit one property, or whether the applicability criteria are appropriately narrow in order to ensure such requests represent incremental expansion of activity;
• Policy discussion regarding legal, non-conforming uses and whether such uses should be allowed to expand/increase activity, in particular commercial uses in residential zones; and
• Clarification on staff-recommended conditions of approval, particularly, the requirement for annual compliance review and valet parking of bicycle and other micro mobility devices.
The following is a brief summary of the key points raised during public comment during the hearing and provided in writing.
Concerns were expressed by nearby residents and the Wilshire Montana Neighborhood Coalition (Wilmont):
• The Text Amendment would allow more commercial intrusion into a residential neighborhood;
• Allowing the intensification of a nonconforming commercial use sets a precedent;
• Noise impacts from patrons, the valet operation, and noise from the garage door accessed from the alley; and
• Concern over potential parking spillover into the neighborhood.
Residents provided support for the Oceana Hotel’s proposal:
• The Oceana Hotel has been a long-standing and positive presence in the neighborhood;
• The Oceana Hotel should be able to open its restaurant to the public because it would help create a more walkable community and be a neighborhood-serving use in an area that lacks dining options that are within walking distance; • The proposal would facilitate economic recovery; and
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• The request is being proposed in a careful manner that will not create impacts to the neighborhood.
A motion to recommend that the City Council approve the Text Amendment was made on the basis that the project facilitates economic recovery, provides a process for public input and creates a neighborhood-serving use where there are none presently.
This motion resulted in a 3-3 vote, which resulted in a technical denial of the Text Amendment.
While the Commission discussed several alternative motions, such as to continue the Conditional Use Permit applications until the City Council has made the determination on the Text Amendment, the Planning Commission believed that a vote of denial for the CUPs would be a more efficient decision as it would allow the applicant the opportunity to appeal the decisions to the City Council and, at that point, the City Council would consider the Text Amendment and appeal of the Conditional Use Permits at the same time.
Through its denial of both CUPs, the Planning Commission articulated the rationale for its decision and a list of modifications to the staff-recommended conditions that should be included as part of the staff recommendation to the City Council:
• The Commission did not pass a motion to recommend approval of the Text Amendment to the City Council; therefore, there is no basis for approving the CUPs to permit the restaurant to provide meal and alcohol serve the general public;
• Conditions should be modified to address the following:
o Hours of operation that include a 10:00 PM closing hour on Sunday; o Valet service that includes bicycle and micro-mobility device valet; o Requirement for multi-year annual review for evaluating compliance with conditions of approval that also includes a clear process for public 27 of 36
participation, including an assessment of parking operations and parking demand generated by the restaurant; and
o Removal of a condition addressing a limitation on private events.
This motion passed by a vote of 6-0. The Planning Commission’s adopted Statement of Official Action (STOA) is provided as Attachment “D”.
During Commission discussion, a concern was also expressed that the Class 1 CEQA exemption could not be supported due to lack of empirical data or evidence to determine a baseline condition to support a finding that the project is a negligible expansion of the existing facility. However, no CEQA determination was made by the Commission since CEQA does not apply when a project is denied. A discussion on the project’s eligibility for a Class 1 exemption is set forth in the Environmental Analysis section below.
The Commission’s recommendations for CUP conditions of approval have been incorporated as part of the staff recommendation for City Council’s consideration.
Appeal Analysis
The appeals of the denial of Conditional Use Permit applications 20ENT-0237 and 21ENT-0090 were filed on June 17, 2021. In the appeal statement, the applicant/appellant asserts that the Planning Commission should have followed staff’s recommendations for approval of both Conditional Use Permit applications and the Planning Commission’s denial of these applications was not supported by evidence or appropriate findings. Moreover, the appellant stated that they accept the proposed conditions discussed by the Planning Commission.
The proposed Text Amendment and Conditional Use Permit applications, as a matter of policy and precedent, presented challenges to the Planning Commission due to the potential long-term implications resulting from a broader code amendment given the hotel’s location within a residential zone. The Commission also discussed a desire to strike a balance between the policy goals identified by the Land Use and Circulation 28 of 36
Element (LUCE) regarding complete neighborhoods and neighborhood preservation, as well as the needs borne out of the current economic hardship on businesses from the COVID-19 pandemic.
For these reasons, the Commission was divided, as was the public input. The denial of both CUP applications was primarily due to the Commission’s inability to make an affirmative recommendation on the proposed Text Amendment to the City Council, following a 3-3 vote. Instead of continuing the CUP applications to a future hearing date following potential approval of the required Text Amendment by the City Council, in the interest of simplicity and efficiency, creating a clearer record of decision, the Planning Commission denied both Conditional Use Permit applications.
This action allows the City Council to act on both the Text Amendment and CUP applications in one de novo hearing where there is the opportunity to provide all the background and context for consideration at the same time.
While the order and/or timing of review for this Text Amendment and CUP appeals is not common, it is not legally infirm to review and take action on the Text Amendment and CUPs in the same public hearing. The CUPs, if approved by the City Council, would not become effective, and the Oceana Hotel could not commence operations in accordance with the CUPs, unless and until the Ordinance implementing the Text Amendment becomes effective.
Staff-Recommended Conditions of Approval
In evaluating the applicant’s proposal to open the Oceana Hotel’s existing onsite restaurant to the public, the staff-recommended Conditional Use Permit process provides an opportunity for community feedback and the imposition of conditions of approval to ensure that the restaurant operates in a manner that does not create impacts on the surrounding neighborhood. This section of the report provides an outline of the staff- recommended project-specific conditions of approval addressing both the restaurant and its proposed alcohol service in the dining room and interior 29 of 36
patio seating area. The Planning Commission’s recommendations are incorporated in staff’s recommendation.
Hotel Restaurant CUP Conditions
1. Hours of operation for the restaurant will be from 7:00 AM to 10:00 PM Sunday through Thursday; and from 7:00 AM to 11:00 PM on Friday and Saturday, except that meal service in the outdoor patio dining area shall end at 10:00 PM.
2. Food must be available at all times and at all public places where alcohol is served, including at any counter seating during the restaurant operating hours.
3. Deliveries of supplies and provisions in direct support of the hotel and restaurant operation shall occur no more than three (3) days per week between the hours of 9:00 AM – 6:00 PM.
4. The existing onsite restaurant shall only be associated with the hotel by ownership and shall not become a standalone restaurant, leased, owned or operated by a separate entity, including a chef not employed by the hotel.
5. The hotel restaurant shall develop and maintain an incentive program (such as offering free appetizers, a free nonalcoholic drink or similar promotion) to any neighborhood patron who walks, bikes, or uses another form of micromobility (e.g., shared bicycles and scooters) to the restaurant.
6. The existing restaurant shall be maintained and operated as a full-service restaurant with set menu and waitstaff.
7. Dining services associated with the hotel restaurant to the general public shall be conducted within the restaurant dining room and specified common areas as identified by the submitted plans dated April 19, 2021. 30 of 36
8. Valet parking shall be provided for hotel and restaurant guests arriving by personal vehicles, including bikes and other modes of transportation. The existing approved valet service plan shall be maintained to accommodate hotel and restaurant guests.
9. There shall be no queuing associated with valet parking on or along Idaho Avenue. Valet and associated queuing shall be conducted in front of the hotel along Ocean Avenue in accordance with the Mobility Division-approved valet plan on file.
10.Parking spaces shall not be occupied by or used for storage of items other than vehicles.
11.Signs shall be posted to remind guests to minimize noise/conversation while outside.
12.Consistent with the purpose of SMMC Section 9.41.080(B), the applicant shall file a compliance report for three consecutive years, with the first report filed within one (1) year after the effective date of this Conditional Use Permit 21ENT-0090, to review the effectiveness of and level of compliance with the terms and conditions of this Conditional Use Permit approval. After submittal of this compliance report, staff shall either set the matter for a public hearing which is noticed in the same manner as the original permit application or submit the compliance report to the Planning Commission as an information item to enable the Planning Commission to determine whether a public hearing is necessary.
The information item will be posted on the City’s website and notice shall be given by any additional means deemed appropriate by the Director. Upon review of the compliance report at this public hearing, if any, the Planning Commission may add or revise terms and conditions to the extent necessary to ensure effective conditions of approval.
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Alcohol CUP Amendment Conditions
1. There shall not be a bar within the restaurant or in any public or common areas on the premises that exclusively serves alcoholic beverages. The existing bar shown on the floor plan dated April 19, 2021 shall be available for all meal service during all operating hours.
2. Alcoholic beverages service and consumption shall only be provided and served to patrons in conjunction with meal service or food to non-hotel guests.
Neighborhood Compatibility
The hotel has existed among its residential neighbors since 1958 as a permitted use, allowed limited use, and legal nonconforming use as a result of changes in its underlying zone from R4, R3 within the North of Wilshire Overlay District, and at present, R3 Zoning District. The changes to the land use designations over the years reflects the balance that has been sought to both support long-standing hospitality businesses while also protecting the residential neighborhood that is also characterized by its adjacency to Ocean Avenue, a prominent boulevard with public open space amenities located directly to the west.
While the hotel use is decidedly commercial in nature, and with the limited exceptions of some reported complaints relating to construction hours and valet service that have been resolved, the hotel ownership and operation have over the years been generally a good neighbor. No adverse impacts have been reported. However, as a result of the proposal to open its existing restaurant to the public, new and site-specific operational conditions are proposed for consideration for both conditional use permits to ensure that the hotel and its restaurant will continue to be good neighbors and a benefit to the residents in the area.
More specifically, as noted in the preceding section of this report, staff has proposed to further limit delivery days and hours compared to what the Noise Ordinance permits for businesses within 100 feet of residentially zoned properties; restaurant hours are proscribed with additional limitations on weekend evening hours outdoors; a 32 of 36
commitment to implement an incentive program is required to encourage residents to walk or bicycle to the restaurant; and a requirement to submit a compliance report one year after the effective date of the CUP for opening the Oceana Hotel’s restaurant to the public.
Land Use and Circulation Element (LUCE) Consistency
According to the LUCE, the Oceana Hotel is located in the Wilshire-Montana (Wilmont) Neighborhood and recognizes that neighborhood-specific goals and strategies are essential in preserving and enhancing neighborhoods throughout the city. The Wilshire-Montana neighborhood is the City’s largest multi-family residential neighborhood. In addition to the highest concentration of multi-unit housing, the district includes a number of restaurants, hotels, and motels.
This neighborhood seeks to protect and preserve its character-defining features, and among its citywide and neighborhood goals, include Goal LU3, Policies LU3.3 and LU4.2 and Goal N3, Policies N3.1 seek to focus on creating local-serving uses, particularly uses that serve residents’ daily needs and are located within easy walking distance in order to reduce the frequency and length of trips. While Goal N3.2 seeks to allow small-scale retail uses in neighborhoods with a land use designation of LowDensity Residential, Medium- Density Residential or High-Density Housing.
The Oceana Hotel was developed among and prior to the construction of other apartment or condominium buildings in the area when the use was permitted in the R3 Zoning District. The hotel has become a fixture in the Wilmont neighborhood and a familiar feature in Wilmont. Currently, the existing onsite 1,556 SF restaurant is an amenity serving only hotel guests, the proposal to open the restaurant and its food and drink services to the general public meets and is supported by the abovementioned citywide and neighborhood goals.
Environmental Status
The proposal to open the Oceana Hotel’s existing restaurant to the public is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA 33 of 36
Guideline Section 15301 (Class 1) for Existing Facilities, in that the project involves the operation, repair, maintenance, permitting, leasing, or licensing of an existing hotel to extend its guest-only meal and alcoholic beverage services to the public in its existing onsite restaurant which is a negligible and incremental expansion of the existing on-site restaurant use. The proposal does not involve new construction, expansion of the existing building, and does not involve the demolition of any structures over 40 years old. The subject property is not listed on the City’s Historic Resources Inventory. More specifically, the project would not result in any proposed or future expansion of the restaurant’s existing kitchen, dining room, and seating capacity in the dining room or outdoor dining patio. The proposal utilizes all features and functions of the existing onsite guest-serving restaurant, including kitchen and wait staff, while extending the same dining service to the general public. Further, the proposal would not increase or expand the capacity beyond what the existing restaurant and its seating capacity/occupancy is able to accommodate under the plans submitted with the applications providing the general layout of the physical indoor and outdoor dining space.
Zoning Ordinance Text Amendment Findings
1. The proposed amendments to the text of the Zoning Ordinance are consistent with the General Plan and any applicable Specific Plans in that the Oceana Hotel is located in the Wilshire-Montana (Wilmont) Neighborhood and the LUCE recognizes that neighborhood-specific goals and strategies are essential in preserving and enhancing neighborhoods throughout the city. The WilshireMontana neighborhood is the City’s largest multi-family residential neighborhood.
In addition to the highest concentration of multi-unit housing, the district includes a number of restaurants, hotels, and motels. Citywide and neighborhood LUCE goals seek to protect and preserve the character-defining features as set forth in Goal LU3, Policies LU3.3 and LU4.2 and Goal N3, Policies N3.1 which seek to create local-serving uses, particularly uses that serve residents’ daily needs and are located within easy walking distance in order to reduce the frequency and length of trips. While Goal N3.2 seeks to allow small-scale retail uses in neighborhoods with a land use designation of Low-Density Residential, Medium- 34 of 36
Density Residential or High-Density Housing. The Oceana Hotel has existed in this neighborhood since 1958 and was developed among and prior to the construction of other apartment or condominium buildings in the area when the use was permitted in the R3 Zoning District. Through its 63 years in operation, it has become a fixture in the Wilmont neighborhood and a familiar feature in Wilmont. Currently, the existing onsite 1,556 SF restaurant is an amenity serving only hotel guests, the proposal to open the restaurant and its food and drink services to the general public meets and is supported by the above-mentioned citywide and neighborhood goals.
2. The proposed amendments to the text of the Zoning Ordinance are consistent with the purpose of the Zoning Ordinance to promote the growth of the City in an orderly manner and to promote and protect the public health, safety, and general welfare in that the amendments create a new discretionary Conditional Use Permit process that both supports a longstanding Santa Monica business by allowing a managed, incremental expansion of its existing meal service to the public and ensures that appropriate conditions of approval would be required to protect the residential neighborhood via a permit process that provides an opportunity for input in order to ensure compatibility with surrounding uses.
Conclusion
The Oceana Hotel has been operating in the residentially-zoned neighborhood on the corner of Ocean Avenue and Idaho Avenue since 1958. The applicant requests approval for the hotel’s existing, guest-only restaurant to serve the general public with a priority on being a neighborhood-focused dining option. Staff supports this Text Amendment application and the associated Conditional Use Permits because the creation of the new discretionary CUP process supports a longstanding Santa Monica business, allows public participation in the decision-making process, ensures that appropriate conditions of approval are included to protect the residential neighborhood, and incorporates important community input on the request.
Accordingly, staff recommends that the City Council take the following actions:
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1. Adopt the CEQA findings in this staff report under “Environmental Status”;
2. Introduce for first reading a proposed ordinance to amend Santa Monica Municipal Code Section 9.08.020 to establish a Conditional Use Permit (CUP) requirement for an existing legal, nonconforming hotel restaurant located within the R2 and R3 zoning districts to request approval to provide meal service to the general public, provided that certain criteria are met;
3. Grant the appeals of Planning Commission’s denial of two Conditional Use Permits associated with the Oceana Hotel’s request to 1) provide meal service to the general public pursuant to the proposed text amendment; and 2) modify the hotel’s existing alcohol CUP to provide service to the general public;
4. Approve Conditional Use Permits 20ENT-0237 and 21ENT-0090; and
5. Approve the Statement of Official Action.
Financial Impacts and Budget Actions
There is no immediate financial impact to the City or budget action necessary as a result of the recommended action.
Prepared By: Beth Rolandson, Administrative Services Officer Approved Forwarded to Council
Attachments:
A. Draft City Council Statement of Official Action
B. Ordinance Oceana Text Amendment Council 4-26-2022
C. Correspondence provided to the Planning Commission, June 9, 2021 D. Planning Commission Statement of Official Action, June 9, 2021 E. Public Notification
F. Project Plans, Rendering, and Neighborhood Context Photographs 36 of 36
G. Background Parking Information
H. Table of Relevant Zoning Designations and Regulations I. Written Comments
J. Written Comment
K. PowerPoint Presentation