City Council
April 26, 2022
Oceana Hotel
Text Amendment &
Conditional Use Permit Appeals
849 Ocean Avenue
Item 6.A
Oceana Hotel’s Request
Oceana Hotel request:
Offer meal and beverage services to the public at existing onsite restaurant in R3 zone Increase economic vitality & support a local-serving dining destination for neighborhood Request requires new process: proposed Text Amendment to allow legal-nonconforming hotel to open existing restaurant to the public – staff-recommended new CUP requirement Two CUPs necessary for Oceana Hotel:
New CUP to open existing hotel restaurant to the public Modify hotel’s existing alcohol CUP to align with restaurant service Planning Commission failed to make an affirmative recommendation to Council on Text Amendment proposal; Commission denied two CUPs
Appeals filed – Council’s review of the two CUPs is de novo Item 6.A
Staff Recommendation
1. Adopt the determination that the proposal is exempt from CEQA Guideline Section 15301 (Class 1) for Existing Facilities;
2. Introduce for first reading - ordinance to amend the Zoning Ordinance:
Establish CUP requirement for existing legal, nonconforming hotel restaurant in R2/R3 Zones to request approval to provide meal service to the public, provided certain criteria are met.
3. Grant appeals of Planning Commission’s action & approve two CUPs for Oceana Hotel’s request to:
Provide meal service to the public
Modify existing alcohol CUP for service consistent with restaurant operations CUPs would only be valid if Text Amendment is approved
3. Approve the Statement of Official Action.
Item 6.A
Key Issues for Consideration
Whether proposed Text Amendment appropriately balances the following goals:
Promoting economic recovery
Supporting complete neighborhoods
Providing opportunity for public input in hearing process Appropriateness of extending existing guest/visitor-only alcohol service to the public with restaurant meal service
Effectiveness of recommended conditions of approval to minimize any potential impacts to the surrounding residential neighborhood
Item 6.A
Project Location
849 Ocean Avenue
• R3 (Medium Density Residential)
• Site is improved w/ a 3-story, 70-room hotel
(since 1958) above subterranean parking
(built in 1957 as an apartment)
• Surrounded by multi-unit buildings within the
same zoning district.
R3
Ocean Ave elevation Item 6.A
Site Context
A
B
C
A B
C
• Located within the Wilshire-Montana Neighborhood (Wilmont) and the City’s largest multi-family residential neighborhood. • Scale of hotel blends in with existing development. Item 6.A Site Plan
Ocean Ave
1st Court Alley
Idaho Ave
150’
200’
Courtyard/Pool
(E) Restaurant
Patio Dining
Courtyard design with guest
rooms surrounding the central
open space.
Restaurant has an interior
entry from courtyard.
Item 6.A
Three Applications for the Oceana Hotel’s request:
Text Amendment 20ENT-0236
• Amend SMMC Section 9.08 to establish a CUP requirement for an existing legal, nonconforming hotel restaurant in the R2/R3 Zones to provide meal service to the public, if certain criteria are met.
Conditional Use Permit 21ENT-0090
• Oceana Hotel’s new CUP application for the restaurant Conditional Use Permit 20ENT-0237
• Amend Hotel’s existing 96CUP-009 alcohol license to align alcohol service with proposed restaurant service (ABC Type 47 license).
Project is exempt pursuant to CEQA Guidelines - Section 15301 (Class 1) Project Applications
Item 6.A
Easement Conditions Overview of Text Amendment
• Proposed TA would amend SMMC Section 9.08 (Multi-Unit Residential Districts), SMMC Section
9.08.020 Land Use Regulations to establish and require a CUP for an existing hotel restaurant in the R2 and R3 Zoning Districts to request approval to provide meal service to the general public as a permitted limited (L) use if certain criteria are met.
• TA does not change the underlying identification of Hotels and Motels as a prohibited use in the R2 and R3 Zoning Districts.
Item 6.A
Easement Conditions Purpose of Creating New CUP
• Staff recommendation: to create a discretionary process • Establish a clear process for legal non-conforming hotel to request changes • Allow public participation to hear, collect, and incorporate feedback from the community in a public hearing
• Opportunity to impose appropriate conditions to mitigate potential impacts Item 6.A
Criteria for Requesting a CUP
1. The hotel use was established and in existence as of January 1, 1995;
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.
Item 6.A
Oceana’s Eligibility Under Criteria
1. The hotel use was established and in existence as of January 1, 1995; • Oceana Hotel was established in 1958
• Deemed an allowed use
• Longstanding presence in R3 zone without negative impacts to neighborhood
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
• 96CUP-009 was approved in 1996 for Type 70 alcohol service to guests and their visitors in common areas, in mini bars
Item 6.A
Oceana’s Eligibility Under Criteria
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.
• Hotel is equipped with a full kitchen preparing meals for guests and their visitors • Restaurant/kitchen in existence for more than 15 years There are seven hotels/motels in R2/R3 zones and only one meet all three criteria.
Item 6.A
Easement Conditions
Analysis of Proposed CUP for Restaurant & Evaluation
of Neighborhood Impacts
The purpose of this CUP requirement
• to provide a public hearing process and hear public input • to provide an opportunity to consider operational conditions that may be necessary to protect neighborhood from potential impacts
• Contingent on Council approving Text Amendment
Discussion of potential neighborhood impacts
• Noise from patrons, garage door
• Competition for and availability of parking
• Commercial intrusion into residential neighborhood
• Intensification of a nonconforming use
Item 6.A
Easement Conditions
Analysis of Proposed CUP for Restaurant & Evaluation
of Neighborhood Impacts
Noise Concerns
• Restaurant entry is located internally from courtyard • Guest rooms surround courtyard, restaurant, and patio dining area – noise is contained within • Waiting area in lobby
• Eliminate likelihood of waiting and queuing outside building Item 6.A
Central Courtyard
& Pool Patio Dining
( E ) Restaurant
Restaurant Entrance
Waiting Area
Lobby
Hotel Entry
Restaurant Capacity
Dining Room: 1,072 SF / 49 seats
Patio Dining: 484 SF / 18 seats
________________________
Total: 1,556 SF / 67 seats
Ocean Ave
Analysis of Proposed CUP for Restaurant &
Evaluation of Neighborhood Impacts
Item 6.A
Easement Conditions Parking & Circulation
• The hotel provides 66 parking spaces (58 striped and 8 in drive aisles through valet service), • Based on SF of the restaurant (1,556 SF), 3 new spaces are required; however, - SMMC Section 9.28.020(B)(2) which waives the parking requirement for up to three spaces in conjunction with a change in use, and
• Preferential Parking Districts exist in the area – along Idaho Ave and on streets S and SE of the site • Parking studies conducted in 2006 & 2015 by Linscott, Law, and Greenspan support the applicant’s assertion that existing parking spaces are underutilized.
Item 6.A
Easement Conditions Restaurant Dining Areas
Photos of restaurant dining
and patio dining areas.
Item 6.A
Easement Conditions Analysis of Proposed Alcohol CUP Amendment • To amend existing CUP 96CUP-009 approved in 1996 which permits the hotel ABC Type 70 License (On-Sale General – Restrictive Service)
• Permits the onsite service and consumption of alcohol beverages by guests and their visitors in guest rooms (mini-bars) and certain common areas.
• Permits the restaurant to provide alcohol service in conjunction with meal service if the restaurant CUP is approved.
• Obtain and apply for a new ABC Type 47 License (On-Sale General – Eating Place), and will • Retain the existing Type 70 license
• Contingent on Council approving Text Amendment and restaurant CUP Item 6.A
Easement Conditions
Summary of Planning Commission Action &
Community Input
Planning Commission and the Community were divided:
• 31 email correspondence were received ( 15 in favor and 16 against proposal) • 26 callers expressed both support and opposition
Planning Commission voted 3:3 and raised the following issues:
• Appropriateness of CEQA Class 1 exemption determination • Whether or not Amendment constitutes “spot zoning”
• Policy discussion on expanding non-conforming commercial uses in residential zone • Clarification on staff-recommended conditions of approval – bike/micro-mobility valet • Frequency of annual compliance review
Item 6.A
Easement Conditions
Summary of Planning Commission Action &
Community Input
Neighborhood opposition cited:
• commercial intrusion into residential neighborhood.
• Intensification of nonconforming use is precedent setting • Noise impact from patron, valet, garage door
• Parking spillover in neighborhood
Neighborhood support cited:
• Oceana Hotel is a positive business in the neighborhood • Proposal creates a walkable community and is local-serving use • Facilitates economic recovery
• Operational conditions will address neighborhood concerns Item 6.A
Easement Conditions Appeal Analysis
Reasons for Planning Commission’s denial of the CUPs:
• Primarily based on inability to agree on a positive recommendation to Council on Text Amendment • Concern for long-term implications/policy due to hotel’s location in residential zone • How to strike balance between LUCE policy goals for a complete neighborhood and neighborhood preservation
Reasons for appeal:
• Sufficient evidence to support proposal
• Planning Commission denials were not supported by appropriate findings Council’s review of CUPs is a de novo hearing.
If approved, CUPs would not become effective unless and until Text Amendment becomes effective.
Staff analysis:
• Extending meal & alcohol service to public is a modest/incremental expansion of existing operations that have had a long-term presence in neighborhood
• Thorough set of operational conditions included with CUPs Item 6.A
Easement Conditions Hotel Restaurant and Alcohol CUP Conditions Staff-recommended conditions include:
• Hours of Operation
• Valet service
• Operate as a full-service restaurant
• No bar permitted
• Alcohol service with meals only to non-hotel guests
• Prohibition on becoming a standalone restaurant
• Limitation on special/private events
• Restricted delivery to 3 days/week b/t 9am-6pm
• Incentive program for patrons who walk, bike…etc.
• Requirement to provide report on compliance with conditions • Sign posting to minimize noise
• Parking spaces/area to be used for parking not storage Item 6.A
Easement Conditions Hotel Restaurant and Alcohol CUP Conditions Planning Commission modified conditions, include:
• Limit Hours of Operation limited to 10:00 PM Sunday-Thursday and 10:00 PM daily in patio • Remove staff-recommended condition on regarding limitation on special/private events • Provide valet service for bicycle and other modes of transportation • Require hotel to provide a multi-year report on compliance with conditions • Planning Commission will receive report; community notification Item 6.A
Easement Conditions Applicant’s Proposed Modified Conditions Additional and modified conditions proposed by applicant in response to recent comments • The restaurant will close at 10:00 PM on Friday and Saturday.
Previously: Hours of operation for the restaurant will be from 7:00 a.m. to 10:00 p.m. Sunday through Thursday; and 11:00 p.m. on Friday and Saturday, except that meal service in the outdoor patio dining area shall end at 10:00 PM. • Deliveries in the alley will be limited to three days a week on weekdays only (Monday, Wednesday and Friday) with no weekend deliveries. The delivery hours will be limited to 10:00 AM to 4:00 PM.
Previously: 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. • For any members of the general public arriving by car to the restaurant after 7:00 PM, the carports located adjacent to the north garage entrance will be used first before parking spaces in the garage to minimize the use of the garage door to access parking after 7:00 PM.
Item 6.A
Neighborhood Compatibility
• Hotel is a long-standing use among its residential neighbors • Zone changes through the years intended to strike a balance to support long-standing hospitality business while protecting residential neighborhood • Hotel has been good neighbor over the years; complaints were corrected promptly • Site-specific operational conditions will ensure neighborhood protection and the restaurant is a benefit to residents
Item 6.A
LUCE Consistency
• This neighborhood seeks to protect and preserve its character-defining features. • Goal LU3, Policies LU3.3 and LU4.2 and Goal N3, Policies N3.1 seek to focus on creating localserving 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. • Goal N3.2 seeks to allow small-scale retail uses in neighborhoods with a land use designation of Low-Density Residential, Medium-Density Residential or High-Density Housing.
Oceana Hotel is located in the Medium-Density Residential neighborhood.
Item 6.A
Environmental Analysis
CEQA Exemption under Section 15301 (Class 1) for Existing Facilities • Operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use.
There are no exceptions to the use of the Class 1 exemption, such as unusual circumstances.
Examples include:
• Additions to existing structures provided that the addition will not result in an increase of more than:
(1) 50 percent of the floor area of the structures before the addition, or 2,500 square feet, whichever is less; or
(2) 10,000 square feet if:
(A) The project is in an area where all public services and facilities are available and consistent with General Plan, and
(B) The area in which the project is located is not environmentally sensitive.
Item 6.A
Environmental Analysis
CEQA Exemption under Section 15301 (Class 1) for Existing Facilities Proposed project is eligible for a Class 1 Exemption based on the following:
• Does not involve construction or expansion of the existing building; • Would not result in any proposed or future expansion of the existing kitchen, dining room, or seating capacity (interior or exterior);
• Proposal utilizes all existing features and functions of existing restaurant, kitchen, and wait staff; • Proposal would not increase restaurant and seating capacity beyond the limits of the existing restaurant under submitted plans;
Per the City’s adopted Transportation Thresholds for review of projects subject to CEQA (adopted June 2020):
• Up to 50,000 SF of commercial use is presumed to have a less-than-significant impact and shall not be subject to further vehicle miles traveled (“VMT”) analysis.
Item 6.A
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 • located in the Wilmont Neighborhood and Citywide and LUCE neighborhood goals seek to protect and preserve character-defining features consistent with Goal LU3, Policies LU3.3 and LU4.2 and Goal N3, Policies N3.1 which seeks to create local-serving uses that serve residents’ daily needs within walking distance and Goal N3.2 seeks to allow small-scale retail in Low – High Density residential neighborhoods.
2. The proposed amendments to the text of the Zoning Ordinance are consistent with the purposes of the Zoning Ordinance to promote growth of the City in an orderly manner and to promote and protect the public health, safety, and general welfare in that… • amendments create a new discretionary CUP process to allow incremental expansion, allowing for public input, and inclusion of appropriate conditions to protect and ensure compatibility with surrounding uses.
Item 6.A
Recommendation
1. Adopt the determination that the proposal is exempt under CEQA Guideline Section 15301 (Class 1) for Existing Facilities;
2. Introduce for first reading the ordinance provided as Attachment “A” approving the proposed Text Amendment to allow an existing legal nonconforming hotel in the R2 or R3 Zoning Districts to apply for a CUP to open its existing full- service restaurant to the general public;
3. Grant the appeal and approve Conditional Use Permit 21ENT- 0090 to allow the Oceana Hotel to open its existing restaurant to the general public, subject to the staff-recommended findings and conditions; and
4. Grant the appeal and approve Conditional Use Permit 20ENT-0237 to amend the Oceana Hotel’s existing CUP for alcohol service to align with the hotel’s restaurant operations, subject to the staffrecommended findings and conditions;
5. Approve the Statement of Official Action.
Item 6.A
Comments
Questions
Item 6.A
Easement Conditions Background - Hotel Use & Zoning
1948-1990: R4 Zone > Hotels are permitted use – Apartment was built in 1957 > converted to hotel in 1958 1990-1995: R3-NW Zone > zone change prohibited hotels
1995-2015: R3-NW / R3 Zone > Hotels existing as of January 1, 1995 are determined to be an Allowed Use:
a Limited Use subject to Zoning requirements.
2006-2015: R3 Zone > Hotels existing as of January 1, 1995 are an Allowed Use (a Limited Use) and may increase room count.
July 24, 2015 – Present: R3 Zone > Hotels and Motels are not a permitted use in the R2 and R3 Zoning Districts and are permitted after review and approval of a Conditional Use Permit in the R4 Zoning District.
Item 6-A
Text Amendment Applicability
Name Zone
Existing Hotel in
Operation as of
January 1, 1995
Hotel’s Ancillary
Restaurant Use
Established prior to
July 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 3rd Street
R3 Yes No No
Pavilions Motel
2338 Ocean Park Blvd
R3 Yes No No
Item 6-A
Preferential Parking Network
Oceana Hotel
Item 6-A
Easement Conditions
Revised Conditions of Approval:
11. 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.
Amended Condition # 11
Easement Conditions Corrected Condition #32
32. Liquor bottle service shall be prohibited. Wine and beer bottle service shall not be available to patrons unless full meal service is provided concurrent with the bottle service. For purposes of this paragraph, ”bottle service” means the service of any full bottle of liquor, wine, or beer of more than 375 ml, along with glass ware, mixers, garnishes, or other items used for the mixing of drinks, which patrons are able to then use to make their own drinks or pour their own wine or beer. All food items shall be available from the premises’ full-service menu.
Easement Conditions
Revised Conditions of Approval:
15. Pursuant to 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 21ENT0090, 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.
Amended Condition # 15