OCEANSIDE —- Local businessman Shantu Patel says he wants to put a
new face on the downtown GuestHouse Inn, but is worried that hefty new
fees being considered by the California Coastal Commission could be a
death knell for the project.
Patel plans to demolish the 80-room inn and the Flying Bridge
Restaurant at 1105 N. Coast Highway and replace them with a 127-room
Hyatt hotel, overlooking the nearby harbor.
The Hyatt would increase occupancy rates on the property because it
would offer an upscale hotel that is more consistent with recent
condominiums and time-share developments in Oceanside, he said.
But a recent proposal by the staff of the California Coastal
Commission would require developers who want to revamp downtown
properties to pay up-front “in-lieu fees,” — money that the proposal
says should be used for projects that would promote more affordable
lodging options along the coast.
Patel says that, if approved, the proposal would add an estimated $1
million to his $25 million project.
At its Dec. 12 meeting, the commission killed a similar fee proposal
that targeted new hotel and motel projects in Oceanside’s downtown
redevelopment area. But the panel stalled on how the fees should be
applied to renovations such as Patel’s.
Patel said if he has to pay the fees, he’ll have to shelve his
project. And, he said, if such fee proposals spread, it could lead to
the demise of smaller hotels and motels on the California coast.
“In the long term,” he said, “it will just cause the decay of those
hotels and the coast will be littered with them. Whoever came up with
this idea is not thinking it through. It may be a short-term tax to
fund their projects like parks and hostels, but in the long term, it
is definitely a negative.”
Jim Abrams, president and chief executive officer of the California
Hotel and Lodging Association, said last week that his organization is
drafting a letter to the commission, challenging the fees.
The association has 1,800 member properties throughout California and
represents the lodging industry in government matters.
Abrams said the commission has no legal authority to impose in-lieu
fees and added that, in Patel’s case, if such fees mean he can’t
develop his property, they would constitute the unlawful taking of
private property.
“If you’re going to take my property or make it unusable, then that’s
basically eminent domain. You can’t just willy-nilly do things to
people’s property,” he said.
Under the recent proposal, developers who plan to demolish and rebuild
a hotel or motel in Oceanside’s downtown redevelopment area would have
to pay fees of $30,000 per unit for half of any new rooms.
The money would be set aside to build campgrounds, RV parks and
hostels to ensure there is still affordable lodging near the beach.
The Coastal Commission defines affordable as $100 a night or less.
Abrams said the commission’s staff has made it clear that while
they’re focusing on Oceanside, they’re trying to come up with a policy
that would cover the coastal zone for the entire state. If that’s the
case, he said, there are procedures that must be followed or the
commission is breaking the law.
Abrams also questioned how the Coastal Commission determined that $100
a night constituted a low-cost hotel room, how it arrived at the
$30,000 in-lieu fee and why the fees wouldn’t be used to help
developers build lower-cost hotels, rather than hostels and campgrounds.
The other side Coastal Commission Executive Director Peter Douglas said last week
that, in regard to a plan for the entire state, Abrams is right.
That’s why the commission is focusing on Oceanside and has addressed
other similar situations on a case-by-case basis, Douglas added.
He said that at the Dec. 12 meeting, the commission approved two
projects on the Central Coast that included in-lieu fees for hotels.
“We’ve been imposing in-lieu fees for over 25 years,” Douglas said,
pointing to a number of lower-cost accommodations that have been built
with such fees, including two hostels in Santa Monica, and cottages at
Crystal Cove State Park, which he said were preserved using in-lieu
monies.
“We can’t adopt a statewide policy except by regulation,” he said,
“but Oceanside’s local coastal program was before us. We decided we
didn’t want the fees to apply to new hotels in that area because the
commission agreed with the city that there are sufficient lower-cost
accommodations available.”
However, if the lower-cost hotels are renovated into pricey new
properties, the affordable options diminish, Douglas said.
That’s why the panel did not waive the in-lieu fee for remodeling
projects, he added. By: MARGA KELLOGG - Staff Writer
Officials working to maintain number of lower-cost rooms