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Developer Rick Caruso wins Montecito hotel tax break

Santa Barbara County supervisors narrowly pass an ordinance that could be worth more than $15 million for developer Rick Caruso's Miramar Hotel project.

June 27, 2012|By Steve Chawkins, Los Angeles Times
  • A chic destination in its day, the Miramar Hotel in Montecito, Calif., is an eyesore whose boarded-up cottages and weedy lots have irritated neighbors for years. Its last guests left 12 years ago.
A chic destination in its day, the Miramar Hotel in Montecito, Calif., is… (Michael Robinson Chavez…)

High-profile developer Rick Caruso got his long-standing wish Tuesday: a tax break that could be worth more than $15 million for knocking down Montecito's dilapidated Miramar Hotel and building a luxury resort on the star-crossed site.

An eyesore whose boarded-up cottages and weedy lots have irritated neighbors for years, the Miramar was a chic destination in its day. Its last guests left 12 years ago; but even a string of celebrity owners, such as hotel mogul Ian Schrager and Beanie Baby billionaire Ty Warner failed to revive it. Caruso, developer of The Grove shopping center in Los Angeles and a possible mayoral candidate, has owned the property since 2007, shelving his development plans when the economy soured.

On Tuesday, Santa Barbara County supervisors sweetened the pot, voting 3 to 2 in favor of an ordinance exempting developers of high-end hotels from 70% of the county's bed tax for 15 years.

The ordinance leaves it to county officials and eligible developers to work out specific conditions for the rebate.

Its lack of specificity on issues such as paying prevailing wages and offering jobs to local residents prompted supervisors Doreen Farr and Janet Wolf to oppose it.

"This ordinance has more holes in it than my husband's workout T-shirt," said Wolf, who has called the measure a reckless giveaway of future public revenue. County voters overwhelmingly passed the 10% transient occupancy tax two years ago.

Matt Middlebrook, a spokesman for Caruso Affiliated, told the supervisors his company "fully expects" to hire locally and pay prevailing wages to an anticipated 1,000 construction workers.

A glitzy new 186-room hotel off Highway 101 could, over two decades, yield the county $130 million — more than 1,200% what the property would raise in its current state, officials said.

"If that's not the basic math, I'm just missing the boat," said Salud Carbajal, the supervisor who represents the Montecito area. "I want to see this happen yesterday."

steve.chawkins@latimes.com

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