Some say the rentals should pay a hotel bed tax
CITY HALL — The fate of so-called mini hotels in Santa Monica is no closer to being resolved after officials this week formally agreed to disagree on the matter.
Planning Commissioners split 3-2 over whether new mini hotels should be allowed to set up shop in Santa Monica, if they apply for and receive a special permit from City Hall. The matter now will go before the City Council.
Mini hotels earned their namesake because they offer rooms with hotel-like amenities, including maid service, gyms, shared offices and valet parking. But unlike hotels, mini hotels require a minimum 30-night stay. What’s more, they don’t charge a 12 percent bed tax.
That difference is a sticking point for some local hoteliers, who are required to pay the tax. One spoke to the Planning Commission at this week’s meeting.
“These type of short-term rental housing units are in direct competition with the lodging, hotel rooms in Santa Monica,” said John McKee, who works for the company that owns the Hotel Oceana at 849 Ocean Ave. McKee said his hotel paid $576,000 in bed tax fees last year, making it the company’s second largest expense behind labor.
Suzanne Frick, the city’s top planner, explained to commissioners that the mini hotels, formally titled “short-term rental housing units,” can be a nuisance to residents because tenants are often here for a short time and aren’t vested in the community. Frick recommended that new mini hotels be allowed, but that they be limited to certain commercial corridors and required to apply for a special permit.
“We do not want to lose the more permanent housing stock to this form of rental housing,” she said, later adding that banning them outright may be unwise. “We do know there is a demand for this type of housing.”
Planning Commissioner Jay Johnson was the most verbal opponent of mini hotels. He said the commission should recommend no new mini hotels be allowed in Santa Monica.
“This is a solution searching for a problem. I don’t see the need for this in this city,” he said. “This is tourist serving … We’re just creating, in effect, mini hotels and a very questionable authority to enforce rules we do create.”
“This is a solution searching for a problem. I don’t see the need for this in this city.” — — JAY JOHNSON Planning Commissioner
Though Johnson had the support of two other commissioners, he could not gather the necessary four votes to push forward his motion.
Planning Commission Chair Darrell Clarke said he approved of Frick’s recommendation, adding that it’s unlikely a large influx of mini hotels will set up shop in Santa Monica and pointing out each case will be reviewed by the commission before it is approved.
As the meeting dragged into the early Thursday morning hours, only four commissioners were left on the dais. After a series of other failed motions, commissioners agreed to disagree on the matter, prompting what’s called a “technical denial.”
Any commissioner can appeal the denial. Officials said an appeal sends the matter directly to the City Council. But with a temporary law banning mini hotels set to expire June 19, the matter was headed in that direction anyway.
City Councilman Kevin McKeown, who acts as a liaison to the Planning Commission, said he expects the issue to be heard at the March 11 meeting of the City Council. McKeown said he’ll need to be convinced of the value of mini hotels before he votes for them.
Originally published in the Santa Monica Daily Press print edition on February 7, 2004. Read the original PDF.