Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of May 25, 2021
Title
CITY COUNCIL REVIEW AND RECONSIDERATION OF THE APRIL 20, 2021 PLANNING COMMISSION DECISION TO DENY A REQUEST FOR A CONDITIONAL USE PERMIT AMENDMENT TO PROVIDE ONSITE SALE, SERVICE, AND CONSUMPTION OF GENERAL ALCOHOL INDOORS ONLY WITHIN THE HOTEL LOUNGE FOR REGISTERED GUESTS ONLY, SEVEN DAYS A WEEK 7:00 A.M. TO 10:00 P.M. AT AN EXISTING HOTEL (H2O HERMOSA) AT 1429 HERMOSA AVENUE, AND DETERMINATION THAT THE PROJECT IS CATEGORICALLY EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA).
(Community Development Director Ken Robertson)
Body
Recommended Action:
Recommendation
Staff recommends City Council:
1. Reconsider the April 20, 2021 Planning Commission decision to deny the Conditional Use Permit Amendment;
2. Conduct the Public Hearing; and
3. Adopt draft resolution approving the Conditional Use Permit Amendment (CUP) 20-8 to provide onsite sale, service, and consumption of alcohol, limited to beer and wine indoors only, within the hotel lounge for registered guests only, seven days a week 7:00 a.m. to 10:00 p.m. at an existing hotel (H2O Hermosa) located at 1429 Hermosa Avenue, and determination that the project is Categorically exempt from the California Environmental Quality Act (CEQA).
Body
Executive Summary:
At its April 27, 2021 meeting, two members of the City Council requested the item be reviewed by the City Council at a future public hearing pursuant to Section 2.52 of the Hermosa Beach Municipal Code.
Letters from the applicant (H2O Hermosa) and the Chamber of Commerce were submitted to Council requesting review of the Planning Commission’s decision to deny the Conditional Use Permit Amendment. Further, the applicant modified the Conditional Use Permit request to limit alcohol service to beer and wine only as compared to the general alcohol request that was submitted to the Planning Commission. Pursuant to Section 2.52 of the Municipal Code, staff scheduled a public hearing for the May 25, 2021 City Council meeting. The public hearing was noticed in the same manner as the Planning Commission hearing. In reviewing the Planning Commission decision, the City Council may uphold, reverse, or modify the Commission’s action, or remand the matter with direction back to the Commission for further review.
At its March 16, 2021 meeting, the Planning Commission considered the following two requests from H2O Hermosa, located at 1429 Hermosa Avenue:
1. Conditional Use Permit and Amendment to provide onsite sale, service, and consumption of general alcohol indoors only within the hotel lounge for registered guests only, seven days a week 7:00 a.m. to 10:00 p.m. at an existing hotel (H2O Hermosa); and
2. Parking Plan Amendment to modify the conditions of approval requiring free parking to allow charging a fee for onsite parking.
The Planning Commission directed staff with a 4 to 1 vote, to bring back a resolution denying the Conditional Use Permit to provide onsite sale, service, and consumption of general alcohol indoors only within the hotel lounge for registered guests only, seven days a week 7:00 a.m. to 10:00 p.m. at an existing hotel (H20 Hermosa), and with a 3 to 2 vote, to bring back a resolution approving the Parking Plan Amendment for charging a fee for onsite parking at an existing hotel (H20 Hermosa).
At the April 20, 2021 public hearing, the Planning Commission memorialized the decision from its March 16, 2021 meeting, by adopting separate resolutions to deny the Conditional Use Permit Amendment and approve the Parking Plan Amendment. The City Council has not requested to review the Parking Plan Amendment request and the review is limited the Commission’s denial of the Conditional Use Permit Amendment.
Background:
The property is zoned Restricted Commercial (C-2) and is located in the northern end of the downtown area of the City on the southwest corner of Hermosa Avenue and 15th street. The project was originally approved and granted a Conditional Use Permit and Parking Plan in 2013 by the Planning Commission and on appeal by the City Council with some revisions incorporated. The entitlements expired before completion of the project and, in 2015, the applicant reapplied for the same entitlements for an almost identical project by proposing only minor changes. At its October 20, 2015 meeting, the Planning Commission approved a Precise Development Plan to allow a 30,250 square foot hotel with 30 guest rooms and common areas on an underdeveloped 11,516 square foot lot; a Conditional Use Permit to allow on-sale general alcohol for hotel guests in guest rooms restricted to mini-bars; and a Parking Plan to allow a valet program with 37 spaces provided on the ground level of the hotel, 24 of which were provided in tandem, 9 of which were standard orientation spaces and 4 spaces for queuing in the drive aisle. The hotel operates pursuant to Planning Commission Resolution 15-25 (Attachment 8), which limits alcohol sales only to in-room service mini-bars.
Subject Property Information
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ZONING: |
C-2 Restricted Commercial |
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GENERAL PLAN: |
CR Commercial Recreation |
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EXISTING/PROPOSED USE(S): |
Hotel |
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LOT AREA: |
11,516 (no change) |
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BUILDING AREA: |
30,250 sq. ft. (no change) |
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HOTEL ROOMS: |
30 Guest Rooms (no change) |
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COMMON AREAS: |
2,950 sq. ft. (no change) |
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PARKING: |
37 spaces (no change) |
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HOURS OF OPERATION EXISTING/PROPOSED: |
Hotel hours: 24/7(no change)/ 7:00 AM - 10:00 PM daily (Sale/service/consumption of beer and wine) |
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ENVIRONMENTAL DETERMINATION: |
Categorically Exempt; Section 15301 Class 1- Existing Facilities |
Planning Commission Decision
At its March 16, 2021 meeting, the Planning Commission held a virtual public hearing to consider the request. The attached Planning Commission staff report (Attachment 2) provides a complete project analysis. There were three representatives for the applicant who spoke on the item. The applicant's team did not prepare a presentation for the meeting. However, the applicant and the project manager clarified that its request was for onsite sale, service, and consumption of general alcohol indoors only within the hotel lounge for registered guest and guest of registered guest. There was one member of the public who came forward to speak, opposing the project due to the potential impacts of the proposed on-sale alcohol service and the proposed use becoming a “bar-like” establishment. There were no e-comments submitted in support or opposition of the project.
The Planning Commission discussed concerns regarding the potential impacts resulting from onsite sale, service, and consumption of general alcohol such as noise. Additional concerns were raised such as: the hotel’s close proximity to sensitive receptors, including, residential uses, business management regarding sales of alcohol to non-registered guests, the potential for late night loud noise, and unwanted activities including, but not limited to loitering. After deliberation, the Commission directed staff, with a 4 to 1 vote, to bring back a resolution denying the Conditional Use Permit to provide onsite sale, service, and consumption of general alcohol indoors only within the hotel lounge for registered guests only, seven days a week 7:00 a.m. to 10:00 p.m. at an existing hotel (H20 Hermosa).
On April 20, 2021, the Planning Commission memorialized the decision by adopting the resolution of denial of the Conditional Use Permit Amendment by a 4 to 1 vote. The attached resolution contains the detailed findings for denial (Attachment 6).
Applicant Request
The applicant originally requested a Conditional Use Permit Amendment to provide onsite sale, service, and consumption of general alcohol indoors only within the hotel lounge for registered guests only, seven days a week 7:00 a.m. to 10:00 p.m. at an existing hotel (H2O Hermosa). The request did not include any changes to the existing hotel floor plans, and the proposed on-sale, service, and consumption of general alcohol would be provided indoors only on the ground-level lounge, south of the front lobby desk with 32 existing seats, in conjunction with the existing on-sale general alcohol within mini-bars located in guest rooms.
The applicant submitted a written modified request to the City Council at the April 27, 2021 City Council meeting (Attachment 7). The applicant requests a CUP amendment to provide onsite sale, service, and consumption of beer and wine indoors only within the hotel lounge for registered guests only, seven days a week 7:00 a.m. to 10:00 p.m. at an existing hotel (H2O Hermosa).
Discussion:
H20 Hermosa has been in operation since October 2020. However, due to the pandemic, the hotel was temporarily closed at times. Since 2015, the applicant has faced many obstacles in the efforts to establish its business and begin operations. The unexpected global wide pandemic of 2020 provided additional challenges to the business. The applicant indicates that allowing service of beer and wine would allow the applicant to be competitive in the market and would allow the business to provide the complete luxury boutique experience to hotel guests.
General Criteria for CUP Approval
Hermosa Beach Municipal Code (HBMC) Section 17.26.030 allows the sale, service and consumption of alcohol onsite with approval of a Conditional Use Permit in the C-2 zone. HBMC Section 17.40.020 establishes the criteria, conditions and standards for reviewing; granting and amending CUPs in order to reduce the potential for adverse secondary land use impacts. While the Planning Commission identified potential negative impacts of the proposed use, City staff cited the following ways the negative impacts would be mitigated. Additionally, in the applicant’s letter addressed to City Council, the applicant proposed to revise its request from general alcohol to onsite sales, service, and consumption of beer and wine only, which should further reduce the potential for negative impacts. The request for onsite sales, service and consumption of beer and wine only have been evaluated below:
1. Distance from Existing Residential Uses: While the existing hotel use is within close proximity to residential uses, the proposed beer and wine onsite consumption would include service in the existing indoor lounge, south of the front desk/lobby area, restricted to hotel guests only and would be an addition to the existing mini-bars for hotel guests within guest rooms. The existing hotel offers a continental breakfast service in the lounge, however no other food service would be provided in the lounge with the exemption of bagged snacks, such as nuts, chips, and non-alcoholic beverages. The existing conditions of approval set forth in PC Resolution 15-25 will remain in full force and effect with exception of Condition 12 d for the parking fee, which was modified by the Planning Commission’s approval of the Parking Plan Amendment in addition to the new conditions of approval included in this Resolution. Finally, beer and wine, service and consumption indoors would be limited to the hours of 7:00 AM to 10:00 PM seven days a week.
2. Precautions taken by the owner or operator of the proposed establishment to assure compatibility of the use with surrounding uses: In order to prevent potential negative impacts on surrounding properties, hours for the existing hotel facilities such are the multi-functional room and the pool/spa have been limited to 10:00 P.M. The applicant proposes to also limit hours of the onsite sale, service, and consumption of beer and wine within the hotel lounge from 7:00 A.M. to 10:00 P.M. The applicant has removed the inconsistent hours for the roof deck from the business website.
The proposed sale, service, and consumption of beer and wine are limited to registered guests only. Since the existing lounge is located beyond the front desk/lobby area, hotel front desk and bar staff can easily witness those entering the lounge and would have the ability to confirm that only registered guests are utilizing the onsite alcohol service. Security cameras also currently monitor the front desk and lobby area for additional security. In the applicant’s original proposal, the applicant also provided its employee alcohol-training handbook, which includes information for guest verification regarding the alcohol service (attached). Bar staff can verify the names of the registered hotel guests through the hotel’s Point of Sales system, which is a computer system that allows business owners to track sales, cash flow, etc. The applicant has also committed to hire additional employees to monitor the lounge area if issues arise with the proposed beer and wine onsite sale, service and consumption.
Finally, in 2020, the Planning Commission approved onsite sale, service, and consumption of beer and wine indoor only at another existing hotel (Hotel Hermosa). Due to concerns from the public and the City’s Police Department, conditions of approval were added to the resolution to mitigate potential impacts. The same conditions of approval that were identified by the City’s Police Department to lower negative impacts for Hotel Hermosa are included in the conditions of approval for the proposal.
3. The number of similar establishments or uses within close proximity to the proposed establishment: While the existing hotel is located in the downtown area of the City, which is home to many late-night alcohol establishments, the provision to expand the onsite sale, service, and consumption of beer and wine to the hotel lounge for hotel guests only would be ancillary to the primary hotel use. A similar use in the downtown area can be found at the Beach House Inn. The Beach House Inn was granted a CUP for on-sale general alcohol sales in 2001, which is limited to the use of in-room mini-bars and private banquet rooms used only by hotel guests. Since both the subject business and the Beach House Inn offer alcohol service exclusively to its hotel guests, over-concentration of similar businesses is not anticipated. The provision for onsite sale, service and consumption beer and wine only, would allow the business to remain competitive in the market and provide the same services offered at similar luxury boutique hotels.
4. Impact of the proposed use to the City’s infrastructure, and/or services: Impacts to police services have been an issue with some late night alcohol serving facilities clustered in the downtown area. However, given the proposal is not a late-night establishment and the prevision only includes onsite sale, service and consumption of beer and wine only indoors for hotel guests only, the request is not anticipated to impact City services. Though the proposed use is not anticipated to create adverse effects to the City’s infrastructure and/or services, several measures have been taken through the conditions of approval to mitigate any potential impacts. The City is committed to ensuring that hotel establishments are closely monitored and the existing hotel use is conditioned such that “Should the Police Chief determine that a continuing police problem exists, he/she may, subject to appeal to the Planning Commission, direct the presence of a police approved security personnel to eliminate the problem. An appeal to the Planning Commission shall be heard within 60 days of filing the appeal. The Police Chief’s determination will not be stayed during the pendency of the appeal. If the problem persists, the Police Chief then shall submit a report to the Planning Commission, which will automatically initiate a review of the conditional use permit,” (CUP Condition 19). In addition, “The Planning Commission may review this Conditional Use Permit or Precise Development Plan or Parking Plan and may amend the subject conditions or impose any new conditions if deemed necessary to mitigate detrimental effects on the neighborhood resulting from the subject use.” (CUP Condition 30). Finally, in 2020, condition of approvals that were identified by the City’s Police Department for the CUP Amendment for Hotel Hermosa to mitigate potential services impacts from the proposed onsite sale, service, and consumption of beer and wine at an existing hotel have been added to the conditions of approval:
11. The establishment shall have security personnel on-duty during the hours of alcohol sales, service and consumption at the owner/operator’s expense. In addition to other security duties at the hotel property, the security personnel shall be responsible for monitoring the dining and alcohol service area to address any loud, boisterous or unruly behavior. If the security personnel are not able to reduce or eliminate incidents and problems at the hotel property, the Chief of Police may direct the establishment to hire additional security personnel, at the owner/operators expense, who would have the sole responsibility of monitoring the dining and alcohol service area within the hotel property. If the problem persists, the Chief of Police shall submit a report to the Planning Commission, which would automatically initiate a review of this Conditional Use Permit and Parking Plan by the Planning Commission. If the establishment can demonstrate that security personnel is no longer necessary to the satisfaction of the Police Chief due to a reduced impact to the City’s services, such as, but not limited to a reduction in the number and severity of Calls for Service (CFS) directly attributed to the hotel property over a twelve month period the Police Chief may modify the requirement for security personnel. If there is no longer a necessity for security personnel, then the requirement to have security personnel shall be annulled upon notification from the Police Chief to the Community Development Director and the applicant. Any other change to the requirement to have security personnel shall require an amendment to this CUP following a public hearing before the Planning Commission.
12. The establishment shall install and maintain a video surveillance system in the ground-level lounge alcohol service area, where alcohol would be consumed. The video surveillance system shall have a retention period of at least 30 days. The establishment agrees to cooperate with the City’s Code Enforcement and Police Department to provide copies of video surveillance for criminal or administrative investigations.
13. The establishment would arrange a meeting with the Police Chief on an annual basis to review the impact of the CUP. During the annual meeting, the Police Department would review the number and severity of the Calls for Service (CFS) directly attributable to the hotel property for the previous twelve months. If there are any increases in the number and severity of CFS directly attributable to the hotel property, the establishment would provide the Police Chief with a plan to reduce the impacts within 30 days of the meeting.
Hermosa Beach, like many other communities, is facing an economic downturn as a result of the COVID-19 pandemic. The pandemic has created challenges to many businesses in Hermosa Beach, like H2O Hermosa. The applicant’s request would allow the applicant to provide similar services provided at other luxury boutique hotels and thus, would allow the business to stay competitive in the market.
General Plan Consistency:
The establishment is located within the Recreational Commercial (RC) General Plan land use area and the downtown character area. The Recreational Commercial designation is located in the downtown area south of Hermosa Avenue, offering costal-related uses and visitor accommodations. “Restaurants, snack shops, entertainment, lodging, retail, beach rentals and other similar uses are prioritized within this designation and allows on ground or upper floor. Office and personal service uses are allowed within this designation, provided they are located on upper floors.” The Recreational Commercial designation plays a role in providing services and amenities to both visitors and residents. “Adjacency to the beach gives this designation the unique opportunity to provide a shopping and dining experience that attracts residents and visitors alike, capturing a large portion of the City’s economic activity generated by visitors. (PLAN Hermosa p. 76).
This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:
Land Use
Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents.
Policies:
• 1.1 Diverse and distributed land use pattern. Strive to maintain the fundamental pattern of existing land uses, preserving residential neighborhoods, while providing for enhancement of corridors and districts in order to improve community activity and identity.
• 1.5 Balance resident and visitor needs. Ensure land uses and businesses provide for the needs of residents as well as visitors.
• 1.7 Compatibility of uses. Ensure the placement of new uses does not create or exacerbate nuisances between different types of land uses.
Goal 4. A variety of corridors throughout the city provide opportunities for shopping, recreation, commerce, employment and circulation.
Policy:
• 4.8 Neighborhood buffer. Encourage all commercial property owners bordering residential areas to mitigate impacts and use appropriate landscaping and buffering of residential neighborhoods.
Mobility
Goal 4. A parking system that meets the parking needs and demand of residents, visitors, and employees in an efficient and cost-effective manner.
Policy:
• 4.2 Encourage coastal access. Ensure parking facilities and costs of such facilities are not a barrier to beach access by the public.
Sustainability and Conservation
Goal 3. Improved air quality and reduced air pollution emissions.
Policy:
• 3.2 Mobile source reductions. Support land use and transportation strategies to reduce emissions, including pollution from commercial and passenger vehicles.
CEQA:
Planning Commission reviewed denial of the application is exempted pursuant to Section 15270 of the ‘Guidelines for Implementation of the California Environmental Quality Act (CEQA),’ Title 14 of the California Code of Regulations, the project is not subject to CEQA because CEQA does not apply to projects which a public agency rejects or disapproves.
City Council’s review and reconsideration of the project is Categorically Exempt from the California Environmental Quality Act as defined in Section, Class 1 Exemption of the CEQA Guidelines. Class 1 exemptions include modifications to existing structures that involve negligible or no expansion of an existing use. The proposal pertains to an existing facility where the hotel operation would be maintained and providing onsite sale, service and consumption of beer and wine in conjunction involves negligible or no expansion of the use. Moreover, none of the exceptions to the Categorical Exemption apply; nor would the project result in a significant cumulative impact of successive projects of the same type in the same place over time, or have a significant effect on the environment due to unusual circumstances, or damage a scenic highway or scenic resource within a state scenic highway. The site is not located on a hazardous waste site and would not cause a substantial adverse change in the significance of a historical resource.
Fiscal Impact:
There is no fiscal impact to the City associated with the recommended action.
Attachments:
1. Draft Resolution
2. Link to Planning Commission Staff Report, dated March 16, 2021
3. Link to Planning Commission Minutes, dated March 16, 2021
4. Link to Planning Commission Public Hearing, dated April 20, 2021
5. Link to Planning Commission Minutes, dated April 20, 2021
6. P.C. Denial Resolution 21-XX
7. Applicant’s Modified Request
8. P.C. Resolution 15-25
9. Notice Poster and Radius Map
Respectfully Submitted by: Yuritzy Randle, Assistant Planner
Concur: Ken Robertson, Community Development Director
Noted for Fiscal Impact: Viki Copeland, Finance Director
Legal Review: Patrick Donegan, Deputy City Attorney
Approved: Suja Lowenthal, City Manager