Just east of the plot of land where the boutique hotel Shade Redondo is being built looms a sight you’d be unlikely to find on a postcard: smokestacks from the AES power plant peeking above the large ocean mural designed to hide the plant’s maze of industrial parts.
If the hotel’s developer, Zislis Group of Manhattan Beach, and Redondo Beach Mayor Steve Aspel have their way, those smokestacks will eventually be gone, replaced by a gentler use of the land that would be less of an eyesore.
“Everyone is investing money expecting that the power plant as we know it will be gone,” Aspel said. “It’s better for everyone if that place is gone … Imagine pulling up to Shade from the Midwest and they forgot to tell you there’s a power plant right next to it.”
Until that date, which is years away if it comes at all, Shade’s 54 rooms will all face the other direction, towards the water.
Shade is just one of a wave of boutique hotels washing up in the Beach Cities west of Pacific Coast Highway at a time when residents and local leaders hope they can replace oil wells and power plants with ocean views and spa packages.
Hermosa Beach, which just six months ago overwhelmingly chose to uphold its oil drilling ban, is leading the charge with three boutique hotel projects — two of them at the larger end of the ‘boutique’ range — in just a four block area of the city. The development boom has alarmed some residents concerned that more hotels and tourists will forever alter their small town way of life. But developers, wary of inciting the kind of widespread backlash elicited by the oil drilling proposal, appear to be listening to residents’ concerns and adapting their plans.
Manhattan Beach, meanwhile, is discussing hush-hush plans to bring in a boutique hotel on the north end of town with the goal of making it a trendy hub for a new class of “Silicon Beach” tech wealth migrating south from Venice and Santa Monica.
A rendering of Shade Redondo, which has been repeatedly delayed due the complicated nature of the construction site but is expected to open next spring. Courtesy Shade Redondo
Strand & Pier
Now that the oil issue has been decided, one of the largest questions on the minds of Hermosa residents is how the proposed hotel at the intersection of Pier Plaza and The Strand — one of the choicest commercial lots in the city — will fit with the rest of the city.
Residents weren’t thrilled with their first peek at the plans last July, when Beverly Hills real estate development firm Bolour Associates and Portland, Ore. hotel management firm Provenance Hotels unveiled their plans for a 117-room, 45-foot high structure.
A rendering of the project, tentatively called Strand & Pier, showed an ultramodern glass exterior and a rooftop pool and lounge that reached 15 feet above the city’s maximum building height. There was also a plan to make use of a city-owned parking lot.
“You have decided to bring an urban hotel to a small town,” Hermosa Beach resident Ray Dussault said at a meeting last summer to unveil those plans. “I think you need to start thinking about bringing a small hotel to a small town.”
Soon after, Bolour did damage control, hiring local public relations maven Paige Nelson to lead a series of community discussions. Those discussions over the past year, along with the acquisition of some additional property in recent months, led Bolour and Provenance to dramatically alter the hotel’s design concept. That new design, when presented to the Hermosa city council at a special meeting in July, mollified some of the initial concerns.
The new plan calls for a 105 or 110-room hotel with a number of changes from the previous plan, including the addition of an on-site underground parking garage. Perhaps the biggest concession is that the hotel will only be 30 feet high. The firms are ditching the ultra-modern exterior, although it has not settled on exactly how the new design will look. There will also be ground floor retail and dining accessible to local shoppers and diners.
Former mayor Nanette Barragan, a voice of dissent on the developers’ earlier plans, said she was impressed with how attentive the developers were to residents’ concerns.
“I have been the sole dissenting vote on this,” she said, following the presentation. “[But] the issues I had you have addressed …I think this is a compromise that is more than I expected … I am supportive of this. I have moved camps, per se.”
Clash
Just three blocks north on Hermosa Ave., the 30-room Clash boutique stands ready to begin development.
The plan had secured the blessing of the Planning Commission, but the approval lapsed in July.
Raju Chhabria, a lead developer for the hotel and a local broker of luxury real estate, attributed the missed deadline to miscommunications among the various agencies involved and his own architect for the project.
The group behind the hotel project filed a new application in August. The commission is tentatively scheduled to discuss it at the Oct. 20 meeting.
None of the relevant code sections have changed since the project secured approval, said Community Development Director Ken Robertson.
Because the project has not changed since its original conception, Chhabria believes the project will go forward and expects that, if the planning commission gives the okay, the city will issue building permit in two to three weeks.
“We have pretty much done all the other things we are required to do,” he said.
Like Strand and Pier, Clash has dealt with backlash from neighbors who were concerned about whether the hotel would have a bar. Even its name has drawn criticism.
“I think the ‘Clash’ is just putting a ‘kick me’ sign on your back,” then-Mayor Kit Bobko told developers at a 2013 meeting.
The developers decided to keep the name, but have had to accept that the hotel will not have a liquor license when it opens. Instead, they will apply for the license when the hotel is completed.
Chhabria said he expects the community to be more supportive once it’s completed.
“The development is going to set a very good bar for everyone,” he said. “It’s going to be very high-end. That’s what I’m known for … It’s good for the community that we’re upgrading the area.”
The Clash lot is also an example of the skyrocketing value of land in Hermosa. Chhabria said he purchased the lot five years ago for $3 million. Already, it has doubled in value, he said. Even with all the challenges he’s faced, Chhabria said he’d jump at the chance to do it again.
“If I could buy five more [lots], I would do it in a second,” he said. “There’s not many properties zoned for a hotel [in Hermosa]. It’s a very limited supply.”
Hotel Hermosa
Lastly, another 100-room hotel is being planned for the corner of 11th Street, just off of The Strand, by OTO, a Spartanburg, South Carolina, developer. The firm is represented locally by Mike Gallen, a South Bay native who works from Hermosa.
Mindful of the community’s strong opinions, OTO is taking its time in presenting information to the public. The firm had planned a presentation last June, but postponed it that week, and has not scheduled a replacement date. Gallen was not available for comment.
In preliminary discussions with the city council last year, the company made it clear that it wants to use a city-owned parking lot rather than build an underground garage on-site. But Barragan, at July’s special meeting, said she hoped OTO would follow Bolour’s lead by building parking on-site.
“[Bolour was] able to work out parking – you should be able to work out parking too,” she said.
Residents have meanwhile been voicing concerns that the cumulative developments will make Hermosa “the next Santa Monica,” or as some have begun calling it, “Hermosa-Monica” — a place in which residents fear they will take a back seat to tourists and have their favorite haunts paved-over in the interest of hotels.
“Local feedback: Let’s bring back the real Poopdeck and Mermaid and not turn the town into Santa Monica,” read the most-“liked” Facebook comment on an Easy Reader story about the Strand & Pier development.
Marje Bennetts, the general manager at the 96-room Beach House in Hermosa, said those fears are unfounded.
“I see it as still being very ‘quaint Hermosa Beach,’” she said. “We don’t have the room to be the next Santa Monica. There aren’t very many spaces available on the water. We don’t have blocks and blocks on the water … It’s a manageable number of rooms.”
In any event, a group of Hermosa activists intends for the city to use the hotels to fill its coffers. The activists, organized by Marie Rice, gathered enough signatures to put an increase of Hermosa’s hotel bed tax before voters on the November ballot.
The measure would increase the hotel bed tax rate to 12 percent from 10 percent and help fund infrastructure projects and city services that the city will need to accommodate the influx of tourists, its proponents have said.
On the waterfront
As the city of Redondo Beach petitions the California Energy Commission to deny AES’s application to build a new natural-gas power plant, the city is also setting its sights on a revitalized waterfront.
The plan put forward by development firm CenterCal would include new restaurants, a movie theater, creative office space, and yes, a 100 or 120 room boutique hotel (in addition to Shade). In an analysis of the proposal, engineering firm AECOM found that the boutique hotel could generate about $10.5 million in business its first year, assuming 65 percent occupancy and an average daily rate of $240. Five years out, occupancy and revenue would improve, the report said.
The waterfront redevelopment is still a ways off — the environmental impact review will take another year, at which point the city will begin to negotiate more specific terms with CenterCal.
Still, the ambitious plans are putting added focus on the AES site that looms over the harbor, said Marna Smeltzer, chief executive at the Redondo Beach Chamber of Commerce.
“The revitalization has put more focus on AES,” she said. “We would like to see a beautiful area down here … nobody wants a big industrial site on their waterfront.”
If the city is successful in persuading the energy commission to deny the power plant application, the hope is that AES would sell to a new buyer, and that the city would re-zone the land, Aspel said.
Redondo recently formed a task force to determine a new use for the AES site that could be approved at the ballot by a majority of the city’s voters — and presumably appeal to the city’s hotel investors and operators that, even with the power plant still there, are already putting millions of dollars into new and renovated properties. But they’re also hoping the power plan will eventually be gone.
“Zislis realized that Harbor Drive was a great location for an upscale hotel,” Aspel said. “It’s going to be better without a power plant, but [Zislis] was more than happy to build with it in the backyard.”
When it opens in the spring of 2016, Shade will be the first of its kind in Redondo: a
$22 million, ultra-chic, three-story project with a rooftop pool and deck space overlooking the water. The project will also pay homage to Redondo’s past with bed frames built from timber recycled from the Red Onion restaurant that formerly sat on the lot.
The opening will also represent a victory in the face of a number of challenges that have befallen its developers since breaking ground in 2013. For one, the site sits on a landfill that contains the ruins of Redondo’s old downtown, and so construction crew drill bits have hit buried pieces of concrete, among other snags. There have also been delays related to financing troubles. Zislis was not available for comment.
Already this year the city gained another boutique hotel. Just down the road from Shade’s site on Harbor Drive, hotel operator Pacifica Hotels in April unveiled a vast remodel of the former Best Western Sunrise Hotel, now called the Redondo Beach Hotel. Pacifica spent $13 million on improvements at the 112-room hotel that included new, ocean view room balconies and a second story outdoor lounge overlooking the water.
While larger hotels that can accommodate hundreds of visitors, such as those on Marine Street near the 405 freeway, are attractive to the city since they generate significant hotel bed taxes, the upscale, boutique hotels near tourist districts are desirable in part since the wealthy guests spend their money around town.
“Obviously, nice hotels attract tourists that will spend money,” Aspel said. “The nicer the hotel, the more money they will bring with them.”
Hotel Manhattan Beach
A few miles north, Manhattan Beach is hoping it can replicate the success of its downtown Metlox Plaza, anchored by the boutique Shade hotel, which opened in 2007.
With that in mind, a new development is being discussed for the sleepier north end of town.
The plans, which have been kept under wraps, call for a high-end development at the site of the wedding venue Verandas Beach House. The city owns the parking structure right next to the venue, at Highland and Rosecrans, and would hope to create a public-private partnership with the developer of the project, said Manhattan Beach Mayor Mark Burton.
“The city is interested in partnering,” Burton said. “Hopefully it will be a Metlox-type of thing. We’re not far along like in Hermosa Beach.”
Details will be released in coming months. But the crux of the idea is to appeal to denizens of “Silicon Beach,” loosely defined as the Westside tech scene, which has been spreading south to Playa Vista and, more recently, to El Segundo and Manhattan Beach.
“There’s a need for high-end hotels,” Burton said. “We’re trying to attract ‘Silicon Beach.’”
Getty Center architect Richard Meier has been rumored to be working on the development, although Burton would not confirm the rumor. A call to Meier’s office was not returned.
The hotel boom comes at a challenging time for developers and operators, who must now compete with upstart homesharing services such as Airbnb that have proliferated online and become a popular option for young travelers (Manhattan Beach has already banned short term rentals). Airbnb’s latest $24 billion valuation exceeded Marriott’s $21 billion valuation, the financial press has pointed out.
Those challenges, coupled with new competition and an improving economy, are encouraging operators to keep up their properties.
Earlier this year, the Beach House in Hermosa underwent three-and-a-half months of renovations that included outfitting guest rooms with new furnishings and decor, as well as redoing outside decks.
Still, Bennetts, the hotel’s general manager, said she does not see Airbnb as a direct competitor, in part because her hotel brings in groups of business travelers who prefer having amenities such as hotel meeting space.
“I don’t think the short-term rental is a competitor,” she said. “It’s a different market. I don’t worry about that.”
Amish Desai, who manages the 17-room Grandview Inn in Hermosa, said his hotel completed about $800,000 of upgrades three years ago that included upgraded furnishings, plumbing and decor. Those upgrades allowed him to tap into higher-end clientele. The hotel increased rates from $100 or $150 a night, to $150 or even $350 a night.
“It used to be a lot of in-state people,” he said. “My clientele has changed to more upscale, with more international tourism.”
Desai and Bennetts both said they welcome the competition from the new hotels.
“More income is good for everybody,” Desai said.
And while residents have been slower to accept the shifting landscape, some have begun to embrace the hotels as a much-needed source of tax income — especially in Hermosa, where the hotel bed tax increase has become a hot topic.
“We are a tourist town,” Hermosa resident Dency Nelson told the city council during a meeting discussing the hotel bed tax in April. “We said that during our oil election. So many people who were on the fence for oil were concerned about finances … (The hotel bed tax) is a way to focus on the quality tourist town we want to be, with small hotels and the small beach town atmosphere we talk about.”
And while some residents wax nostalgic about the loss of the Beach Cities’ small town atmosphere, Smeltzer, of the Redondo chamber, said a more tourism-based economy would actually harken back to the old days — even before the AES power plant was built.
“I’ve heard people say we’re not a tourist destination, but we’ve been a tourist site since the 1800s,” she said. “We were Hollywood’s Riviera. I have a book called ‘Old Redondo.’ It shows millions of people. I’ve never seen those kinds of crowds.” ER
