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Santa Monica Planning Commission Wants More Commitment from Hotel Developer

Santa Monica Real Estate Company, Roque and Mark


Rusty's Surf

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

By Jason Islas
Staff Writer

July 26, 2013 -- The Planning Commission delayed its decision Wednesday on whether to recommend that the City Council approve two small hotels at the corner of Colorado Avenue and Fifth Street, asking the developer for a stronger commitment to community benefits.

The Planning Commission postponed its vote on the two six-story hotels proposed by OTO Development after a lengthy discussion that centered on labor issues, the projects' proposed environmental standards and a low financial commitment from the developer for the City's Esplanade project.

Commissioner Jim Ries -- who chaired Wednesday's meeting in Chair Gerda Newbold's absence -- said, “If it's a union hotel, that's a huge public benefit for us.”

The union issue has sparked much concern in a community known largely for its labor-friendly politics. ("Two Small Hotels in Downtown Santa Monica Spark Labor Concerns,” July 19).

“I talked to the applicant and about 100 other people about this,” said Planning Commissioner Sue Himmelrich at the top of Wednesday's meeting. “There was a lot of interest in this project.”

Much of that interest came from Unite Here Local 11, Los Angeles' chapter of the hospitality workers' union and its ally, Clergy and Laity United for Economic Justice (CLUE).

While both projects have a living wage -- $12.85 an hour -- and a local hiring provision written into the proposed development agreements (DAs), OTO Development has stopped short of entering into a neutrality agreement with Unite Here, a step which would lay the ground work for unionizing the hotels in the future.

Staff told the Commission that the living wage component was modeled after a similarly-sized hotel project at 710 Wilshire Boulevard, which the City Council narrowly approved more than a year ago. (“City Council Approves Living Wage for Proposed Santa Monica Hotel,” March 2012)

Mike Gallen, OTO's director of development for the west coast, said that OTO was not opposed to signing a neutrality agreement for the hotels in Santa Monica, but that the Unite Here was asking OTO to agree to union neutrality for their future developments in the Los Angeles region.

Gallen added that OTO is willing to take a proactive role in helping to unionize the two proposed hotels in Santa Monica.

When asked by the Commission to speak on that point, Unite Here representatives said that the negotiations were private.

Most speakers Wednesday were not opposed to hotels at these site, across the street from the future Expo Light Rail station, but wanted more from the developers.

“I think that the expansion of the Metro to Santa Monica is a great opportunity for our city and it's also a great opportunity for our workers,” said Jeremy Arnold, a recent New Roads graduate and fellow with Clergy and Laity United for Economic Justice (CLUE).

Commissioners were also concerned that the DAs did not provide a commitment to Santa Monica's revamped Cradle to Career initiative which includes a Hospitality Training Academy (HTA) through which local residents could train for careers in the hospitality industry.

Commissioner Richard McKinnon was nonplussed with a proposed $300,000 commitment in one of the DAs to help offset construction costs for the City's $10.7 million Esplanade project.

Staff recommended that the developer pay twice that figure.

“The contribution that's being asked from you is an extra $600,000.” McKinnon said. “Wouldn't that be a sensible thing to pay?”

McKinnon argued for the higher contribution, citing the fact that both hotels would benefit from the improvements to Colorado Avenue the City has planned, including wider sidewalks and a buffered bike lane.

He and other commissioners also pushed the developer for a higher sustainability standard. As proposed, the projects would achieve a silver rating in the Leadership in Energy and Environmental Design (LEED) rating system. Staff and the Commission called for the developer to try for a gold rating.

"The Planning Commission listened to the needs and concerns of the Santa Monica community and made the right decision to continue the hearing," said Rachel Torres, a research analyst with Unite Here.

"A project at such an important location should not move forward when there are so many unresolved issues," she said.

The Planning Commission will continue discussing the DAs in August.

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