Lido House Hotel wins Coastal Commission OK for former Newport City Hall site

A 130-room boutique hotel that is slated to replace the former Newport Beach City Hall at the entrance to the Balboa Peninsula cleared one of its final hurdles Wednesday.

The California Coastal Commission voted 10 to 2 during a meeting in Long Beach to approve plans for the Lido House Hotel, which some residents and officials have billed as a key element in a years-long effort to revitalize the peninsula from what some call a "war zone" to a family-friendly residential and commercial destination.

The commission also approved a land-use amendment that allows the property to be used for commercial and hotel purposes. It previously was zoned only for public facilities.

"This is one of those projects that is truly a win-win for our community and visitors alike," said Mayor Pro Tem Diane Dixon.

The City Council approved the four-story, 98,725-square-foot project last year. The plan calls for the hotel, meeting and retail space, a spa, restaurants, a pool and recreation area and a rooftop bar.

The council will have to sign off on the plans again before construction can begin. The project could break ground in early 2016, according to city staff.

The city plans to lease the 4-acre site to Olson Real Estate Group for the project. For decades, the property housed Newport Beach's City Hall complex until new municipal offices opened near Fashion Island in 2013.

The project's design is modeled after historic buildings like the Balboa Pavilion and draws inspiration from Cape Cod-style architecture, according to developer Bob Olson.

"The architecture is timeless," he said. "It will be relevant 100 years from today."

The plan also includes a 148-space parking lot and reconfiguration of public parking along 32nd Street to add one spot and improve traffic flow, according to a Coastal Commission staff report.

Guest rooms are to include a king bed or two queen beds, extended-stay suites and villas and a presidential suite. Prices would average about $212 per night.

As a condition of the Coastal Commission's approval and in an effort to provide low-cost activities and shelter for visitors, Olson Real Estate Group and the city plan to bring as many as 420 students annually from schools in low-income areas to camp at the Newport Dunes Waterfront Resort for an educational program known as Fostering Interest in Nature. The students would spend several days at Upper Newport Bay to learn about marine ecosystems and experience activities such as kayaking and surfing.

Olson dedicated $1.4 million to run the project for 10 years. Traditionally, developers put a set amount of money into a Coastal Commission fund that is used to eventually build hostels or other low-cost shelters for lower-income visitors.

Several commissioners spoke in favor of the Fostering Interest in Nature program, saying it is an innovative way to use funds that may otherwise be untouched for years.

"To see this in front of us today is heartening for me and a positive sign from the city of Newport Beach to their commitment to the principles of the Coastal Act and bringing lower-cost visitors to Newport Beach," Commissioner Mark Vargas said.

Other commissioners took issue with the idea that the program would be in place only 10 years.

"It's a program that should be funded for the life of the project," Commissioner Mary Shallenberger said.

City Manager Dave Kiff said if the program is successful, the city would work to secure grants to continue it beyond 10 years.

The city began looking into how to use the City Hall site in 2011, considering options such as a community center and residential and commercial uses before settling on a boutique hotel, which city leaders and nearby residents have said will be a vibrant addition to an aging area.

For years, the city has been looking at projects designed to breathe life into the Balboa Peninsula. The Lido House Hotel as well as a townhome project along Via Lido and the revitalization of Lido Marina Village to include waterfront shops, restaurants and a gourmet market are in line with the effort, city officials said.

"The sad reality is that the Lido Village area has become severely blighted," resident Denys Oberman said. "This project provides an essential destination anchor that will serve visitors to the area and the community itself."

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