Ethics Issue Delays Action on Luxury Hotel’s Request

Three Dana Point planning commissioners attended the grand-opening gala at the four-star St. Regis Monarch Beach Resort & Spa, creating a possible conflict of interest that forced the commission to abruptly postpone a vote on the hotel’s request for special beach access.

The city attorney’s office has asked the state Fair Political Practices Commission to determine whether the officials’ attendance runs afoul of state ethics rules, and if so, how it can be resolved.

Until the state completes the review, the city is putting off a decision on whether the St. Regis should be allowed to cut a path to the beach through its own golf course, a plan opposed by nearby homeowners. “It’s best not to cloud the determination,” said Sarah Pashalides, a city planning employee overseeing the St. Regis issue. “It’s a lot cleaner to have the potential conflict of interest resolved and then proceed.”

Some officials said they attended the event because they considered it important that city government be represented. But others who turned down invitations said they did so to avoid the appearance of being influenced by a company with business before the city.

The $240-million St. Regis is set on 172 acres and is considered one of the most luxurious hotels in Southern California. Its 400 oversized rooms are outfitted with Web TV, wireless keyboards, high-speed Internet access and DVD players. A night’s stay can cost anywhere from $375 to $5,000.

More than 1,500 guests attended the grand opening Saturday night, including several Hollywood stars. They were treated to fine wines, caviar and poached Maine lobster. Singer Chris Isaak performed as stars including Albert Brooks, Dylan McDermott and Angela Bassett mingled on the lawn overlooking the ocean.

The party cost $500 per head. Public officials are limited by state gift laws to $320 from one source in a calendar year.

In the weeks before the event, planning commissioners and other officials discussed with the city attorney whether it was proper to attend the function when the hotel has business before the panel. The attorney tried to get the Fair Political Practices Commission to make an expedited ruling on the matter last week, but the agency could not respond in time.

So the attorney advised the officials that they should either stay home or pay the difference between the gift limit and final estimated cost of the event, which varies depending on how many guests each official brought along.

None of the planning commissioners who attended the event returned phone calls Tuesday. James V. Lacy, vice chairman of the commission, said he was definitely tempted by the event but decided to turn down the invitation.

“I personally went down to City Hall and returned my invitation, even though it would have been a wonderful event to go to and participate in,” he said. “All of us involved in the government are regulated by state ethics rules, and there’s very good reason for that. It’s to reduce the possibility that a regulator’s judgment is somehow influenced.”

City Councilman Wayne Rayfield said he attended the event with his wife because he thought it was important for local leaders to be present for such an occasion. He said he was prepared to pay the difference between the gift limit and the cost of two tickets. But he said that because he and his wife stayed for only 90 minutes, he should not have to pay the full $500 face value for each ticket.

“We had some hors d’oeuvres and some wine, and we left before whatever the rest of the festivities were,” he said.

“We’ll pay whatever we need to pay, because I thought it was important for the city to be represented at the opening of a world-class hotel in our city.”

In a letter to the Fair Political Practices Commission distributed to city officials, Deputy City Atty. Bryan C. LeRoy said that he considered the grand opening official city business but that the tickets still fall within the state’s gift limits.

“The city of Dana Point, along with its beaches and hotels, is a principal vacation destination for tens of thousands of visitors each year,” LeRoy wrote. “Its success is important to the city and the city’s revenues from transient occupancy tax.”

It could take the ethics panel several weeks to make a final ruling on the matter. Until then, the city has tabled action on the hotel’s request.

The hotel is seeking the city’s permission for a trail through its 18-hole golf course that would wind up at the beach. But several homeowner groups are trying to keep St. Regis guests from accessing Monarch Bay beaches.

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Times staff writer Louise Roug contributed to this story.