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Planning Commission Blocks Liquor License for Palihouse Santa Monica

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By Jason Islas
Lookout reporter

March 21, 2014 -- Palihouse Santa Monica -- a boutique hotel in the bayside city’s wealthy Wilmont Neighborhood -- can’t serve alcohol, the Planning Commission ruled Wednesday.

After about three hours of mixed -- and sometimes impassioned -- public testimony the seven-member Commission voted unanimously against allowing the 38-room hotel, located on Third Street, just north Downtown, to serve alcohol to guests.

“I don't think under any circumstances these guys have proved themselves worthy of a liquor license,” said Commissioner Richard McKinnon, who argued that the owners of the property had not made a sufficient effort to work with the neighbors in the community.

He said that giving them a license to serve alcohol to guests would be “rewarding them for bad behavior.”

Commissioner Amy Anderson argued, however, that the issue wasn’t the owners’ behavior but that serving alcohol would be “too commercial an activity to be accommodated” in the neighborhood.

Commissioner Jim Ries agreed, saying alcohol service is “not compatible with the land use in the area.”

While many who turned out to speak at Wednesday’s meeting lived near the hotel -- which formerly operated half of the 38 rooms as hotel rooms and the other half as rent-controlled apartments -- the region’s powerful hotel workers’ union, UNITE HERE Local, also made a showing.

Melanie Luthern, an organizer with the union, questioned the non-union hotel’s “lack of community engagement.”

In a statement issued days before the meeting, Luthern said the hotel’s owners had not responded to the union, which “had hoped to discuss with them how we might be able to offer training to employees and outreach to the community.”

At Wednesday’s meeting, representatives of the hotel’s owners -- hotelier Avi Brosh and Lighthouse Investments -- said that they had, in fact, held several “well attended” community meetings with nearby residents.

Brosh and his partners took over the 87-year-old building -- formerly the Embassy Hotel and Apartments -- in 2012 and began remodeling it, much to the chagrin of some of the neighbors.

“Since we've been in operation, we've been under tremendous scrutiny by the City of Santa Monica,” said Matt Fisher, a principal with Paligroup, the company that operates the hotel.

Fisher also pointed to the company’s other two hotels in West Hollywood and on Melrose Avenue, which he said have coexisted peacefully with neighbors for years.

Despite “myriad” code compliance calls to Palihouse Santa Monica, Fisher said the City never found the hotel operators in violation, a claim that drew jeers from the audience Wednesday.

When the Commission cast its vote in the early hours of Thursday morning, the chamber erupted in applause. Palihouse Santa Monica’s owners can appeal the Commission’s ruling to the City Council.

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