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City Council Approves Redevelopment of Historic Miramar Hotel

September 30, 2020 10:44 AM

City Council Approves Redevelopment of Historic Miramar Hotel

SANTA MONICA, Calif. – After nearly a decade of community engagement and planning, the Santa Monica City Council approved, by a vote of 4-2, a project for redevelopment of the Miramar Hotel that builds on the historic identity of the 4.5-acre landmarked property, designed around the iconic Moreton Bay Fig Tree and the historic Palisades Building. The project will improve circulation by bringing all parking on site and will provide funding and land for a minimum of 42 deed-restricted affordable apartments located in a 100% affordable housing building to be developed by a nonprofit housing provider on an adjacent site that currently serves as a parking lot. 

The project, which was substantially redesigned at least three times based on community feedback and complies with the City’s Downtown Community Plan, is estimated to produce:

  • Approximately 3,060 union jobs and $418 million in economic output during construction;
  • Approximately 675 total union jobs (214 net new jobs) and $122.6 million in annual economic output ($41.8 million additional) once in operation; and
  • $15.4 million ($8.1 million net new) in annual fiscal impact to the City’s General Fund to support City services.

To ensure that the hotel’s closure during construction does not disrupt City revenues, the developer will make advance payments of anticipated transient occupancy taxes (TOT) in the form of a one-time advance payment of $2 million at the time of plan check submittal and additional quarterly payments totaling $10 million beginning once the building permit is issued or the hotel closes in anticipation of construction. Once the redeveloped hotel reopens, the developer will receive credits against TOT for the advance payments in the event that monthly TOT exceeds $567,000.

In addition to the land and funding for the deed-restricted affordable apartments, community benefits include:

  • 14,000 square feet of publicly accessible open space at the corner of Wilshire Boulevard and Ocean Avenue.
  • An enhanced transportation impact fee of $1,400,000 to be used for transportation and mobility infrastructure improvements.  
  • A $1,000,000 contribution to early childhood initiatives.
  • A $720,000 contribution for affordable housing.
  • A $500,000 contribution towards equity and economic opportunity initiatives.
  • A $350,000 contribution to support services and programs for seniors.
  • $200,000 in funding for the park ambassador program with a focus on nearby Reed Park.
  • Public art, an historic preservation interpretive feature, community meeting space availability, and open space programming.
  • Local hiring and internship programs.
  • Support for core City programs, local parks and schools, and community-wide economic recovery through jobs and tax revenue.

“This project will reinvigorate a beloved historic property at the northern edge of Downtown Santa Monica as we rebuild our local economy while also creating new affordable housing, public open space, and resources to address homelessness, provide child care, and support seniors in our community,” said Interim City Manager Lane Dilg.

The project will include 60 condominiums, which will be permitted to be rented as hotel rooms provided that the hotel provides, in addition to standard TOT, a fee equating to 5% of the nightly room rental with half of the proceeds supporting affordable housing and equity and economic opportunity initiatives and the other supporting efforts to address homelessness with a focus on the Downtown area. 

In the event of any ownership transfer prior to issuance of a building permit that would not trigger a reassessment for property tax purposes, the developer has agreed to pay the difference between the fair market value and assessed value of the property at the time of the transfer.  Should such a payment be made, the City, Santa Monica-Malibu Unified School District, and Santa Monica College would each be allocated a pro rata share based on standard tax revenue rates. 

Located at 1133 Ocean Avenue, the project follows the zoning regulations outlined in the Downtown Community Plan (DCP). After the DCP was adopted, the applicants reduced the height of the project from 262 to 130 feet, a requirement that was the result of significant community feedback.

It will increase the size of existing hotel rooms and will raise the total room count by eleven. It will add 60 condominium units and substantial onsite parking to accommodate hotel guests, visitors, and employees on site. The project will be LEED Platinum or higher and will improve water efficiency by 20% and energy efficiency by 15% compared to the existing hotel’s usage. There will be extensive solar infrastructure and on-site rainwater capture and a greywater reuse system for all on-site landscape irrigation.

The project was approved in a 4-2 with Councilmember Sue Himmelrich and Mayor Kevin McKeown voting no, citing the inclusion of condominiums in the project. Councilmember Gleam Davis recused herself from the item.

The next step is for the developer to seek approval by the California Coastal Commission. Anticipated reopening is in 2026.

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