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Miramar Hotel Redevelopment

Thursday, September 29, 2016

MIRAMAR HOTEL PROJECT
Caruso Affiliated submitted a revised project to Santa Barbara County at the end of July 2014.  The project reduces the number of rooms from 186 to 170, eliminates underground parking areas and shifts building locations.  The revised project will receive further consideration by the Montecito Planning Commission on January 21, 2015.  A staff report can be viewed at this link:  Miramar Hotel Staff Report.  In November 2014, the Montecito Association Board of Directors voted to endorse the redesigned project as presented. On January 21, 2015 the Montecito Planning Commission approved the project.  Subsequently, Caruso Affiliated and a Miramar Avenue property owner filed appeals with the Board of Supervisors.  The Board of Supervisors heard the appeal and approved the project.  Rough grading of the site is now underway with occupancy planned for Summer 2018.

On March 6, 2012, the Board of Supervisors extended the project approvals and initiated work on a Transfer Occupancy Tax rebate ordinance.  The Board of Supervisors approved the Hotel Incentive Program Ordinance in July 2012. To date, Caruso Affiliated and the County of Santa Barbara have failed to find agreable terms for an agreement under the Hotel Incentive Program Ordinance.  Nonetheless, demolition of the old hotel structures was completed in early 2013.

PROJECT OVERVIEW
Caruso Affiliated’s plans for demolition of the existing facilities and construction of a new 192 room hotel and conference facility were approved by Santa Barbara County in early 2009.  In 2010 Caruso sought revisions to the approvals in an attempt to reduce construction costs and better position the project.  The existing approvals would allow for 186 rooms, a ballroom, restaurant facilities, a beach bar, beach club, spa facility, retail shops and surface and underground parking.  Total development would include approximately 263,000 square feet.  Uses would include beach weddings, large events in the ballroom facility and a beach club of up to 300 members.

BACKGROUND
The hotel was shuttered in September of 2000 so that Ian Schrager could begin renovations to the property he had purchased in 1998.  The Schrager plan had included remodeling of the guest rooms and construction of a new banquet hall, lobby, restaurant, beach bar and spa building.  The Montecito Association reviewed the project as proposed and unanimously supported it with some minor changes that were suggested to the Planning Commission.  These were accepted by the Commission and the applicant and the project was approved.  Unfortunately, Mr. Schrager ran into financial difficulties with his investors and construction did not proceed beyond demolition of some of the buildings.  As the property began to deteriorate, the Association worked with Mr. Schrager and the County to address security concerns and visual blight. 

In April 2005, the property was sold to Ty Warner Hotels & Resorts, LLC who, at the time, indicated a desire to proceed with the renovation.  The purchase was completed subsequent to the March 2005 decision by the County to extend the Schrager approvals – a step that was wholeheartedly supported by the Montecito Association.  Unfortunately, TWHR never moved forward with development of the approved plans or presented revised plans to the community or the County.  In January of 2007, less than two years after purchasing the property, it was sold to Caruso Affiliated for $50 million. 

Caruso Affiliated filed plans for a revised development plan in June of 2007.  The Caruso project was a complete departure from the previously approved and still valid Schrager project.  Caruso proposed to demolish all of the structures onsite with the exception of the seawall.  The County was proceeding with review of the project but in September, Caruso withdrew the project due to conflicts with neighbors regarding the use of a road easement and flood hazards.  A revised project was submitted in November and County review began in earnest.  A draft environmental document was produced and circulated for review, and in July of 2008 the project was presented to the Planning Commission for approval.

The Montecito Association spent hours reviewing the Miramar proposal, starting in February of 2007.  The Association’s Land Use Steering Committee and Board held public meetings with the applicant, hosted presentations to the Montecito community, provided information and a forum for discussion at numerous Board and Land Use Steering Committee meetings which were noticed to the public, reviewed the Environmental Document, planned and hosted a noticed public hearing to accept input from the community attended by over 100 persons including comment from 37 speakers.  After reviewing the County Staff Report the Association’s Board of Directors voted 10-0-2 to endorse the project as presented in the staff report.  The Association’s letter to the MPC included a thoughtful discussion of those areas where there remained some concerns – specifically with regard to the scale of development adjacent to South Jameson Road, parking and traffic. 

The MPC held several continued hearing is an effort to get additional information and revisions to the proposal.  On October 8, 2008 the commission approved the project by a vote of 4-1.  That decision was appealed to the Board of Supervisors by a group of neighbors who raised issues regarding flood impacts, water supply impacts, noise, compliance with ordinance requirements, proper environmental review procedures and other issues.  The Board of Supervisors considered and denied the appeals in December of 2008.  The Boards action was appealed to the California Coastal Commission.  Those appeals were withdrawn in April 6, 2009, which is considered the final approval date for the project. 

Since April of 2009, the required approvals for the project have been in place.  In order to build the project, the developer must obtain final approval of architecture, undergo building plan review and comply with the conditions of approval placed on the project.  To our knowledge, these efforts have not begun due to financial and market conditions.  Instead, the developer sought extensions to the permits and revisions to the project intended to lower construction costs and improve the economics of the project.  During this time, the Montecito Association has attempted to stay in contact with the developer and has requested measures to address security, public safety and the aesthetics of the undeveloped site.