Heartbreak Hotel : Santa Monica: Plans for a luxury hotel on the site of the Sand and Sea Club are pitting two political allies against each other. The liberal community is sharply divided.

When Assemblyman Tom Hayden publicly blasted Michael McCarty’s proposed Santa Monica Beach Hotel and Community Center last week, the announcement turned a spotlight on an increasingly bitter squabble that has sharply divided Westside liberals.

To those who know Hayden, it was no surprise that the erstwhile founder of Students for a Democratic Society thought a parcel of state-owned beach was an inappropriate place for a $300-a-night luxury hotel.

But what made some members of the Westside progressive community uncomfortable was that Hayden’s target this time was not some remote corporate developer, but one of their own--a popular and visible local restaurant owner and philanthropist who knows all the right people, has said all the right things and made all the right concessions to ensure the project’s success.

It is because of McCarty’s stature in the community and the way his motives and plans were attacked by Hayden during a news conference, that the entire political community is abuzz.

The very public conflict between the celebrity-legislator and the celebrity-restaurateur, observers say, cannot help but intensify an already rancorous debate over the project and focus attention on the dissension that exists among friends and allies over whether the hotel is a boon to the community or a nightmare for the environment.

As one political observer said: “This is not a fight between good-guy environmentalist and bad-guy developer. This is driving a huge wedge down the middle of our (political) family.”

Last week, talk of the controversy was everywhere.

“I went to a dinner party last week, and the first quarter of it became embroiled in a conversation over the hotel, and there were strong Hayden people for it and strong Hayden people against it,” said veteran Democratic political consultant Kam Kuwata. “There are people who are very, very angry over this. . . . It affects friendships, unfortunately.”

“I get asked about it all the time by people who feel strongly one way or the other,” said Felicia Marcus, a prominent environmental attorney. “When I say there are merits on both sides, I feel sort of alone.”

In a lengthy interview, Hayden acknowledged the pitfalls of suddenly jumping into a hotly contested local development project, particularly considering that he has generally steered clear of such disputes since he was first elected to the Legislature eight years ago.

“I have friends on both sides of this issue. . . . But there are principles here, I think, that are too basic for me to stay out of this,” Hayden said. “The hotel is a way to draw the line against overdevelopment.”

One friend and campaign contributor Hayden has lost for sure is McCarty, proprietor of Michael’s, the acclaimed Santa Monica eating establishment.

McCarty is often credited with starting the California cuisine craze and helping spread it worldwide, and his contributions to political and environmental causes--and to Hayden--are well-known. He says his dream is to build this hotel, then use it revolutionize the upscale hotel market the same way he did the restaurant business.

“We have spent the last five years building an environmentally sensitive project that is good for the whole community,” said McCarty. “Sometimes what gets forgotten is that the goal of this whole process was to increase public access (to the beach), public usage and public revenues.”

“Tom is clouded by emotion on this issue. He is whipping up a Santa Ana-fed brush fire that fans environmental hysteria,” said McCarty, who counts among his supporters many Hayden allies. McCarty’s political consultant on the project is Jack Nicholl, a former executive director for Hayden’s Campaign California political group.

In the three years since he obtained from the city an exclusive negotiating agreement to build the hotel, McCarty has won much support for his project, from grass-roots groups to the Santa Monica Planning and Recreation and Parks commissions. Most say he has bent over backward to appease the community at great personal expense.

McCarty estimates he has spent $3 million already to open the project up to public scrutiny and to try to minimize its environmental impact. In addition, the project would generate $3 million a year for the city through lease fees and taxes, he says.

McCarty also has agreed to provide such amenities as an $11-million community center, which would include an art and environment center, public beach club and cafe, meeting rooms, public parking lot and playground.

Hayden agrees that McCarty has done much to make the project as palatable as possible. But he said he was concerned about the hotel because it would be located on a beach, and a public one at that.

At his news conference, Hayden said the beachfront hotel “is another step toward turning Santa Monica into a congested Miami or Waikiki. It serves the interest of one developer and those who can afford rooms for $300 a night.”

And in perhaps his most cutting comment, Hayden dismissed McCarty’s community center proposal as “lip service to public access.”

It was time to enter the fray, Hayden said, because on July 31 the City Council is scheduled to approve the project, reject it or agree with a proposal by McCarty to tie the issue to two development initiatives on the November ballot and let voters decide.

For Hayden, the project symbolizes all that is bad in the “Faustian bargain” that Santa Monica and other communities have had to make with developers, in which they often sacrifice environmental protections in exchange for badly needed revenues and amenities.

Local opposition to McCarty shows others are concerned too, Hayden said.

“This is not a split over personalities but a much deeper realignment” of politics in Santa Monica, Hayden said.

Traditionally, rent control has been the central issue of city politics. “While the rent control conflicts are far from over, they’ve been superseded by the issue of overdevelopment. That’s why you see the change of alliances going on, the rethinking, reassessment and realignment.”

Sharon Gilpin, leader of a group opposed to the hotel, Save Our Beach, agreed. She cited the recent defeat of a project at Santa Monica Municipal Airport that would have brought the city $28 million over 10 years.

McCarty and others say the proposed hotel is environmentally sound and good for the city. The restaurateur was particularly irked that Hayden had waited so long to rail against the project, and he accused Hayden of harboring a hidden agenda.

“If Tom is so concerned with development,” McCarty said, “where was he when all those other hotels were being built? Where was he years ago on my project? And where was he at Santa Monica airport?”

Four other beach-area hotels have gone through the Santa Monica City Council approval process recently, all of which avoided the scrutiny McCarty’s project has attracted, according to McCarty.

McCarty contends that Hayden has opposed him as a way of appeasing hundreds of wealthy campaign contributors, movers and shakers who belong to the private Sand and Sea Club, which now occupies the site of the proposed hotel at 415 Pacific Coast Highway.

Save Our Beach’s efforts to thwart the project, according to McCarty, have received considerable funding from Doug Badt, the Sand and Sea’s operator, who also submitted a proposal for a hotel on the site in 1987 but lost out to McCarty.

Like McCarty, Badt also has contributed to Hayden’s campaigns. Hayden knows both men well and has dined at Michael’s and at the Sand and Sea.

If the hotel project is defeated, McCarty contends, Sand and Sea gets to stay in business that much longer, despite the state’s effort to see the private club closed and open up public access to the beach. Hayden and state Sen. Herschel Rosenthal (D-Los Angeles) have asked the state to extend the lease, but only to allow Santa Monica to collect $250,000 in annual lease fees while an alternative use for the land is found.

But the Santa Monica City Council took a step last week toward terminating the club’s lease regardless of the hotel’s prospects. And in an effort to distance himself from the Sand and Sea Club issue, Hayden said he is willing to change his request to the state and seek its immediate shutdown.

Santa Monica Mayor Dennis Zane and Vice Mayor David Finkel said the consensus is that the council favors the McCarty project by a 5-2 margin, but that it will allow voters to decide in November.

In the meantime, Hayden’s motives in entering the dispute, and his clash with McCarty, will be debated. So will his claim that he is helping lead the way toward a fundamental political realignment.

“Why did Tom take a public position?” asked Zane, a longtime Hayden ally. “I don’t know. I was myself surprised.”

It is not clear how vigorously Hayden plans to campaign on the hotel issue. He is up for reelection in November but is regarded as a shoo-in and has therefore been focusing most of his energy on the “Big Green” environmental initiative that also will be on the ballot. But Santa Monica remains his political power base, and he has built an extensive voter turnout network in the city that makes him a force to be reckoned with on local issues.

Some say Hayden’s reluctance to take sides in local issues shows that political motivations are at work here as much as environmental concerns.

“It wouldn’t surprise me that regardless of what the environmental impact was, that Tom is there doing favors for people doing favors for him,” said one political consultant well-traveled in state and local Democratic circles. “Instead of voting his own personal principles, Tom votes his political advantage. And he is positioning himself for statewide office.”

Others are just as quick to defend Hayden and praise him for his stand.

“That is part of the Hayden mystique--that people infer an elaborate reasoning when I think it is more straight up than that,” said Zane. “Maybe he stated a position because he thought it was right.”