Veto Continues Fight Over Beach Hotels : Development: Gov. Wilson’s action seems to strengthen a developer’s hand, but officials say the referendum barring such facilities was valid.

SANTA MONICA — Gov. Pete Wilson’s veto of a bill to ban luxury hotels on California’s beaches appears to leave the door ajar for the redevelopment of the old Sand and Sea Club property in Santa Monica.

“It’s my impression this means the governor and (others in Sacramento) will be poised to push some development on this site,” Santa Monica Mayor Ken Genser said.

At the very least, battle lines are being more sharply drawn over who controls development on state beaches.

In his veto message signed Friday, Wilson said the legislation authored by state Sen. Herschel Rosenthal (D-Los Angeles) would restrict the flexibility of the state to manage its own parklands.

The governor also took a swipe at Santa Monica’s local ban on beach hotels when he vetoed the state legislation, saying it would have invited other municipalities to usurp state powers.

“I believe that this legislation, which would codify language similar to Santa Monica’s restrictive zoning ordinance, would set an inappropriate precedent for another city or county to enact restrictive zoning laws intended to prohibit activities or development at other state parks,” Wilson wrote.

Slow-growth activist Sharon Gilpin, who led a successful battle in which Santa Monica voters outlawed all beach hotels, said the veto means that local forces must continue to fight.

“I think the issue is still alive,” Gilping said. “It’s a shame the governor doesn’t understand he’s vetoing public access.”

Santa Monica is embroiled in litigation with would-be beach hotel developer Michael McCarty over the 1990 voter ban on beach hotel development.

The restaurateur had been selected by the City Council to develop the site at 415 Pacific Coast Highway and had sunk more than $1 million into the project when a tide of slow-growth sentiment swept into Santa Monica.

The proposed $300-a-night hotel and community center was expected to bring in an estimated $3 million in annual tax revenue to the city.

The Santa Monica City Council granted McCarty a signed development agreement, but only after he agreed to put his plan to a vote of the people.

McCarty lost and later sued the city, contending in part that the election was meaningless because city voters had no legal say over the matter. McCarty’s unresolved claim against the city is included in bankruptcy proceedings he filed in New York, which must be resolved before the jurisdictional issue is litigated in California.

From the outset, the Santa Monica city attorney’s office said the lawsuit is groundless. Acting City Atty. Joseph Lawrence this week reasserted the city’s position that the election was legal and that the city was well within its rights under a long-term lease agreement with the state to operate the beaches.

“The fact that the governor vetoed the bill is regrettable,” Lawrence said. “It has no effect on our legal position.”

Had the bill been signed, however, Lawrence said “it would have been another nail in the coffin” for developers eyeing the beaches.

The Santa Monica site is a particular plum because it carries with it special state permission for a 60-year lease for a concessionaire.

Rosenthal had proposed the state measure after McCarty tried an end run by hiring a lobbyist to insert language into a parks appropriation bill that could ultimately have put him back in the ballgame by challenging Santa Monica’s lease agreement. The bill slipped by the Legislature in the last hours of a session.

When Wilson vetoed the bill, Rosenthal accused him of giving nothing more than lip service to coastal protection. “Like the Bush Administration, Wilson talks about the need for environmental protection but fails to take appropriate action,” Rosenthal said in a statement.