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Ban on Luxury Beach Hotels Sent to Governor : Legislation: An ongoing battle over Michael McCarty's proposed project in Santa Monica sparked the bill. Gov. Wilson is undecided whether to sign it.


COASTAL — A bill sponsored by state Sen. Herschel Rosenthal (D-Los Angeles) to ban luxury hotels on state beaches passed the Legislature last week and is awaiting action by Gov. Pete Wilson.

"Hotels that belong on 'Lifestyles of the Rich and Famous' are inappropriate for state beaches," Rosenthal said in a statement after the measure passed the Senate on Wednesday on a 21-13 vote.

The Assembly approved the bill earlier in the week on a 44-34 vote. A spokeswoman for Wilson said he has not decided whether to sign the measure.

Rosenthal's legislation was sparked by an ongoing battle over whether a luxury hotel should be built at 415 Pacific Coast Highway in Santa Monica, the former site of the membership-only Sand and Sea Club.

After sinking millions into a hotel project and getting City Council approval, restaurateur Michael McCarty lost his bid in the November, 1990, election to build a luxurious, 160-room hotel and community center. Santa Monica voters rejected his--or any--new hotel on the sand.

McCarty tried to circumvent the local vote by appealing to the Legislature last year to take back operating control of the property. He contended that Santa Monica wasn't managing it properly as a moneymaking venture, according to its agreement with the state.

The state has ultimate control over Santa Monica's beaches, which are run by the city under a long-term operating agreement.

In sponsoring an amendment providing for state intervention on McCarty's behalf, State Sen. Robert Presley (D-Riverside) said Santa Monica had acted illegally in putting a matter involving state land before local voters.

Presley's amendment was approved without debate in the chaotic closing hours of the legislative session last fall. When Santa Monica officials and residents learned of the measure, they vigorously pressed Wilson to veto it.

Without commenting on the merits of the amendment, the governor eventually vetoed the entire parks appropriations bill, to which Presley's measure was attached.

Shut out again, McCarty filed a lawsuit against Santa Monica, saying the city reneged on a contract with him to build the hotel.

McCarty has filed for bankruptcy protection in New York, the location of one of his restaurants. Joseph Lawrence, assistant city attorney in Santa Monica, said the lawsuit is on hold pending resolution of the bankruptcy case.

Santa Monica City Atty. Robert M. Myers has said McCarty's suit against the city is weak because McCarty agreed to put his hotel project to a popular vote.

An attorney for McCarty contends, however, that local voters do not have jurisdiction on matters involving state-owned property.

Rosenthal aide Colleen Beamish said the senator proposed the bill in case a court rules that Santa Monica had no right to vote on the hotel project. "Our fear is that would open a window of opportunity for a similar project to rear its ugly head," Beamish said.

The city of Santa Monica took no position on Rosenthal's bill because officials believe a local ordinance is sufficient to protect the beach from hotel development, said City Manager John Jalili.

Had McCarty's hotel been built, an estimated $3 million in taxes and fees would have flowed to Santa Monica each year, including $1 million for the fund used to maintain and improve the beaches.

Until the Sand and Sea Club was evicted from the property after a long tenancy, it brought in $250,000 a year in rent to the Santa Monica treasury.

Since the city of Santa Monica took over management of the property, it has been an overall drain on resources, initially costing about $300,000 to renovate.

It has been open to the public this summer, drawing an average of just 120 paying customers a week in July, but it has been attracting 800 a week this month.

Assistant City Manager Lynne Barrette said that the facility will be able to cover its expenses if it can sustain that level of patronage. Overall figures for the year on the costs and revenue from the club were not available.

Admission to the facility is $2 for adults and $1 for children during the week and double that on weekends. The fees entitle a visitor to use the showers and restroom facilities at the club.

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