Development Edges Rent Control as the No. 1 Political Issue : Santa Monica: A new age is dawning, pitting vocal pro-development and slow-growth factions against each other.


Santa Monica, as City Council candidate Sharon Gilpin sees it, has lost its way.

While pursuing the admirable goal of finding money to pay for an ambitious array of social services, she says, the progressive politicians who have been running the city have struck a “Faustian bargain” with developers. The city may get the money it needs, but the price is a steep one: Hotels, office and commercial developments are transforming the beach community into a congested urban center.

Nonsense, says City Councilwoman Christine Reed. Responsible development, aside from providing urgently needed revenue, keeps the city vibrant, she says.


Count on it: The election next month will usher in a new age in Santa Monica politics. A city long preoccupied with tenants’ rights is moving on to other issues. And development has emerged as one of the big ones.

Even Assemblyman Tom Hayden, who spent a good portion of the 1970s helping to organize the coalition of tenants that came to be known as Santa Monicans for Renters Rights and who dominated city politics through the 1980s, thinks it is time to move on.

“I just believe that as rent control and SMRR dominated the ‘80s, the slow-growthers and the critics of development will dominate the ‘90s,” Hayden, a Democrat who has represented Santa Monica in the Legislature since 1982, said in a recent interview.

On Nov. 6, voters will be given the chance to approve or reject two ballot measures that would impose wide-ranging curbs on development. Development issues also figure heavily in the City Council elections, where nine candidates are running for three seats.

Then there is the most contentious issue of all: a third ballot measure in which voters will approve or reject a single project that in some respects has come to embody the entire citywide debate over development.

The project is restaurateur Michael McCarty’s proposed Santa Monica Beach Hotel and Community Center. McCarty wants to build a 160-room, $300-a-night luxury hotel on five acres of state-owned beach, where the private Sand and Sea Club operated until two weeks ago.

To make the project more attractive to the city, McCarty proposes to include an $11-million community center, which would include facilities for art and environmental education; a public beach club and cafe; meeting rooms; a playground, and an underground parking facility. The project would generate an estimated $3 million a year for the city.

The battle over McCarty’s project is said to have resulted in the costliest election campaign in the city’s history. McCarty’s side alone had poured more than $135,000 into it as of Sept. 30 and will probably spend considerably more.

Hayden, who in recent years has generally stayed aloof from contentious local issues, created a stir during the summer and early fall when he entered the fray. Hayden said he chose to take a stand against the McCarty hotel because it would be built right on the beach, and on state land that he says should be used in a more public way. Also, he said, he was frustrated. “After a time,” he said, “enough is enough.”

The dispute has split the city’s large liberal community. McCarty is a popular local figure who has been active in many philanthropic activities, and his supporters criticize Hayden for drawing the line on this particular project after having stayed out of earlier development squabbles. Where was Hayden, they ask, when four earlier hotels were being approved, or the huge commercial developments at the Water Garden and Colorado Place?

Hayden acknowledges being a latecomer on the issue.

“I also believe that while it is a fight worth fighting, that it is too late--that it is a battle to salvage some beauty rather than enhance it,” he said. “It requires very strong measures because you are dealing with a quality of life that is almost in eclipse. People are leaving for Seattle every day.”

McCarty, meanwhile, insists that the hotel and community center will have no serious adverse environmental impacts and notes that the project has been approved by all the necessary city agencies. But beyond that, he depicts it as a facility that will enhance the vitality of the city in much the way that the city’s thriving Third Street Promenade has.

On the ballot itself, the development issue is anything but simple. There are the three confusing and somewhat contradictory ballot measures--Propositions S, T and Z, dealing with development in the city and on the beach. And there is also the City Council campaign, in which the candidates’ attitudes toward development can be gauged in part by their positions on the ballot measures.

The candidate most on the spot is Christine Reed. As the only incumbent on the ballot, she is in the position of having to defend the decisions by a council majority to approve not only the McCarty project in August but other projects as well, including a massive and highly controversial commercial office development on city-owned land at Santa Monica Municipal Airport.

The council backed down on pursuing the airport project in April, after it became clear that residents opposed to the development had collected enough signatures to force a referendum on it.

In the face of attacks by her opponents, Reed insists that she is not “pro-development at all.”

“I am a pragmatic person who looks for compromise and reasonable solutions,” Reed said. “I am one single (council) member. The development that has happened in this city that people are angry about did not happen because Chris Reed waved a wand.”

One of the activists who successfully opposed the city on the airport project was Sharon Gilpin. She is one of at least five council candidates who have made slow growth issues a major part of their platforms.

Gilpin and council candidates Kathleen Schwallie, Larry Jon Hobbs, Kelly Olsen and Jean Gebman oppose McCarty’s hotel project. They say it will generate unacceptable increases in water usage, sewage flow and garbage, and will aggravate traffic congestion on Pacific Coast Highway.

The same five candidates are united in support of Proposition S, an initiative that would sharply restrict beach development. If approved, Proposition S would ban future construction of hotels and large restaurants west of Ocean Avenue and would impose broad limitations on beach development. The five candidates say they support Proposition S as a way of putting on the brakes on rampant development and preserving beach access.

Proposition T in many respects is a milder version of Proposition S. It would establish a three-year moratorium on development of beachfront hotels and large restaurants. It would also set aside 50% of hotel bed taxes from beachfront hotels for parks and cleanup of beaches.

Proposition T was originally sponsored to compete with Proposition S, as a way of protecting hotel projects developed by McCarty and by Maguire Thomas Partners, which is building the beachfront Santa Monica Ocean Hotel. But construction has started on the Maguire Thomas project, making it exempt from development curbs imposed by ballot measure, and the fate of McCarty’s hotel now has been tied directly to Proposition Z.

Proposition Z asks voters if the City Council’s approval of the McCarty project should be repealed. McCarty fought hard for the essentially negative phrasing of the measure, which means that hotel supporters must vote no on the ballot, and opponents must vote yes. (Some observers say there is sufficient conflict between the various initiatives that the fate of the McCarty project may well end up having to be resolved in court, regardless of the election outcome.)

Two council candidates, Reed and Donna Alvarez, support McCarty’s hotel and urge a novote on Z. They say the hotel and community center constitute a fine example of the kind of responsible development that the city needs to raise revenues to fix up its beaches and coastal waters.

Whatever the virtues of the McCarty project, the slow-growth candidates say, the time has come to apply the brakes. According to Gilpin, the City Council since 1984 has approved 5.8 million square feet of development, of which only 20% has been completed. Among the major projects in the pipeline are the Water Garden, a 1.2-million-square-foot office development at 26th Street and Olympic Boulevard; a 1.3-million-square-foot addition to the nearby Colorado Place commercial development; and two more hotels near the beach, the Park Hyatt, now nearing completion at the end of Pico Boulevard, and Maguire Thomas’ hotel on Ocean Avenue, where construction has just begun.

The slow-growth candidates cite some additional symptoms of overdevelopment: at least 75 intersections are at or near gridlock, and the city estimates that $171 million will be needed to alleviate traffic problems in the coming years.

Schwallie, an attorney, says there is a “serious crisis in leadership” in Santa Monica. She said a pro-development council there has recklessly approved millions of square feet of commercial projects that have threatened the character of the city’s neighborhoods as well as its coastline.

Whatever the outcome of the ballot measures regarding the beach hotel, the campaigns themselves already have underscored an increasing awareness of development issues by focusing on the City Council’s record, say Hayden and others.

Hayden said the council’s approval of the McCarty project is a sure sign that the coalition that led Santa Monica through its rent-control revolution has taken an ill-advised, short-term view of development--one that has sacrificed environmental issues for a quick solution to budget crunches.

“I think it is a sign of the progressive coalition being seduced by the promise of some spare change for beach cleanup,” Hayden said. “I think it is grotesque.”

Though he does not blame members of Santa Monicans for Renters Rights, he said, Hayden implicitly criticized the four SMRR members on the City Council--Dennis Zane, David B. Finkel, Kenneth Genser and Judy Abdo.

“I think that is a built-in aspect of being a local elected official--facing a fiscal crisis. . . . You want to meet your budget, you want to expand your social programs, but where do you look?” Hayden said. “About the only place you can look is fees from developers. And developers want their pound of flesh, and so you give it to them. And on it goes.”

SMRR co-chairman Brad Jones defended the tenants rights organization, saying that many in the group are staunch slow-growth advocates.

Jones noted that Zane, Finkel, Genser and Abdo often split on issues, and lose out to majorities headed by other council members. For example, only Abdo voted in favor of the McCarty project in August.

Jones also pointed out that SMRR did not have a council majority from 1986 to 1988, a period in which many of the large projects now being constructed were approved.

“I think Assemblyman Hayden is misfiring a bit when he says that the progressives sold their souls to get money for social programs,” Jones said.

“People are looking at SMRR as part of the problem and part of the establishment when we didn’t have the votes to do so--Chris Reed and the conservatives were the ones who approved 5 million square feet of development from 1984 to 1988.”

The tenants rights organization has officially remained neutral on the beach hotel because of the controversy. It has supported two candidates for City Council--Tony Vazquez and Olsen. Olsen considers himself a staunch slow-growth activist; Vazquez says he considers himself a “controlled” growth candidate who has remained neutral on the McCarty hotel issue.


Here is a synopsis of the three development-related measures that will be on the Santa Monica city ballot on Nov. 6. There also will be six other city ballot measures and a school district bond proposal.

Proposition S--(Beach development ban) Would ban future development of hotels and large restaurants west of Ocean Avenue.

Background--Placed on the ballot through an initiative drive financed primarily by Douglas Badt, owner of the Sand and Sea Club, which was recently evicted from its publicly owned beach site. The measure was originally intended to prevent restaurateur Michael McCarty from building a hotel and community center on the site. The fate of the McCarty project is now specifically linked to Proposition Z, however. Meanwhile, Proposition S is being embraced by slow-growth advocates for its broader limitations on beach development.

Council Candidates in favor--Larry Jon Hobbs, Kelly Olsen, Kathleen Schwallie, Sharon L. Gilpin, Jean Gebman.

Against--Donna Alvarez, Christine Reed.

No position--Tony Vazquez, Robert T. Holbrook.

Proposition T--(Beach development moratorium) Would establish a three-year moratorium on development of beachfront hotels and large restaurants, set aside 50% of hotel bed taxes from beachfront hotels for parks and cleanup of beaches.

Background--Placed on ballot through initiative drive financed by McCarty and by Maguire Thomas Partners, a large Santa Monica-based development firm that recently began building a beachfront project called the Santa Monica Ocean Hotel. The measure was originally designed to compete with Proposition S and to protect the sponsors’ two hotel projects, but now will not apply to either one. The Maguire Thomas project is exempt because work has already begun. And Proposition T is superseded by Proposition Z as far as the McCarty project is concerned. What’s left of Proposition T is a set of beach development restrictions milder than those of Proposition S. Supporters of Proposition T say the three-year moratorium should be used to study the overall beach development issue.

Candidates in favor--Holbrook, Alvarez, Reed.

Against--Hobbs, Olsen, Schwallie, Gilpin, Gebman.

No position--Vazquez.

Proposition Z--(Beach hotel) Would repeal the City Council’s approval of the Santa Monica Beach Hotel and Community Center, which restaurateur Michael McCarty plans to build on the site of the Sand and Sea Club.

Background--Placed on the ballot by the City Council at the urging of McCarty. On the premise that it would improve his chances of success, McCarty fought hard for council approval of the negative phrasing of the ballot question. The result is that supporters of the hotel must vote no, and opponents must vote yes.

Candidates in favor--Hobbs, Olsen, Schwallie, Gilpin, Gebman.

Against--Alvarez, Reed.

No position--Holbrook, Vazquez.