The developers of a proposed 30-story Downtown Long Beach hotel were thrown a curveball this week when a City Council member appealed the project to the California Coastal Commission before abruptly pulling it early Thursday.
Councilman Roberto Uranga, who also serves on the Coastal Commission, signed onto an appeal late last month challenging some of the aspects of the proposed hotel, including how it affects pedestrian access to the coast, the cost to stay at the hotel and how the hotel’s valet parking would impact access to a public park.
The appeal was also signed by Coastal Commission Chair Steve Padilla.
Celina Luna, Uranga’s chief of staff, originally declined to comment on the appeal because it was still active and said that the appeal could be heard as soon as May. A few hours later, a Coastal Commission spokesperson confirmed the appeal had been pulled.
Uranga said in a text message that he still wants more “affordable visitor serving accommodations,” but said the project would provide thousands of high paying construction and hospitality jobs, “both industries which have suffered the brunt of the economic impacts of the pandemic.
“Long Beach has the largest number of affordable coastal accommodations in the urban Southern California region and I will work with my colleagues to ensure that we continue to make this a priority.”
The City Council had previously approved a tax sharing agreement in 2016 and 2017 as well as other parameters for the hotel once it opened, including it having a unionized workforce, its housekeepers having access to panic buttons and even a request that a local restaurant be recruited to operate a location at the hotel if the operators used a third-party purveyor.
The tax-sharing agreement was meant to make the project economically feasible as the developers said a nearly $50 million funding gap existed.
While the project was always touted as a four-star development, no members of the council, including Uranga, objected to what it might cost to stay at the luxury hotel.
Part of the appeal filed by Uranga pointed to the shrinking share of economy-priced rooms along the state’s coast and their replacements being luxury hotel rooms.
The commission has used in-lieu fees to mitigate this affect by requiring developers to pay millions of dollars in some cases to offset the construction of luxury buildings. In February, the commission considered requiring a boutique hotel developer to pay in-lieu fees equaling 25% of the project’s total units at $100,000 per unit.
If a similar approach was taken with the American Life project, it could add over $10.7 million to the cost of construction for the rooms alone.
The appeal also sought in-lieu fees for a pedestrian bridge to cross Pine Avenue as well widening of existing pedestrian walkways.
American Life president Greg Steinhauer said that he was in disbelief that Uranga would file an appeal against the project when he had previously voted to award American Life the RFP for the land and voted unanimously with the council to move the project forward in 2016.
“I don’t know what’s going on with that,” Steinhauer said, adding that an appeal at the Coastal Commission would not help the project.
The appeal by Uranga came less than a month after Steinhauer’s team received a lifeline from the Long Beach Planning Commission when it granted American Life a three-year window for it to break ground on the project. Without it, Steinhauer said the project would have died.
The vote by the Planning Commission in March appears to be one of the last obstacles outside of financing the project that’s expected to cost over $200 million. City officials said Thursday that because the project is consistent with city zoning laws, the Planning Commission is the decision-maker on the project, not the City Council.
Jeremy Harris, president and CEO of the Long Beach Area Chamber of Commerce, said that the bureaucratic environment of the state is part of why it’s hard for developers to make deals that pencil out.
Harris said the tourism and convention sector of the local economy is likely to be one of the last to fully come back online so he’s excited that the vacant lot at the corner of Pine Avenue and Ocean Boulevard looks like it will finally be activated.
“I think it’s going to be a big win for Long Beach and our local economy,” Harris said.
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