Beach Hotel Wins, But War Has Just Begun : Development: Santa Monica will ask voters in November to approve its narrow OK of a luxury hotel on public land.

The battle to get city approval for a luxury hotel on public beachland in Santa Monica is over, but the war has just begun.

The Santa Monica City Council late Wednesday night concluded more than 18 hours of public debate over three days by narrowly approving a development agreement with restaurateur Michael McCarty. McCarty plans to build a 160-room, $300-a-night hotel and community center on nearly five acres of land on Pacific Coast Highway where the private Sand and Sea Club now stands. The vote for the project was 4 to 3.

But residents, who appear to be as divided on the issue as the council, will have the final say. The council also agreed to place a measure on the November city ballot asking voters whether the council’s approval of the project should be repealed.

The campaign over the hotel is expected to be a take-no-prisoners war with no expense spared. Both sides are optimistic of victory, and both sides are well-funded. McCarty has already shown that he is willing to spend whatever is necessary, and opponents of the hotels--many of whom are members of the Sand and Sea Club--also apparently have deep pockets.

Club members may also be in a fighting mood because the City Council narrowly voted to evict the club by Sept. 30. The club, which has been at the site since the 1960s, has been operating on a month-to-month lease for several years. The hotel, if approved, is not expected to begin construction for at least two years, but the council decided to evict the club immediately to make clear its position that a private club is inappropriate for public beachland.

If the first rounds of the fight over the hotel are any indication of things to come, it will be a bare-knuckles campaign. Assemblyman Tom Hayden (D-Santa Monica), who usually stays out of local issues, has emerged as one of the most vocal opponents of the project. Tuesday, he accused McCarty of offering him a $50,000 campaign contribution for a statewide environmental initiative drive in exchange for Hayden’s neutrality on the hotel matter. McCarty denies the charge.

That same night, McCarty aides suggested that Hayden was intoxicated after he unexpectedly appeared to speak at the public hearing on the hotel. Some council members and other observers also questioned whether Hayden was sober, and a Santa Monica newspaper, The Outlook, ran a front-page story the next day with those allegations.

In a prepared statement issued after the newspaper account was published, Hayden acknowledged that he had drinks with dinner before the meeting, but said the accusations against him were exaggerated and politically motivated.

Opponents of the hotel, including Councilman Ken Genser, were also stung Wednesday night when the City Council majority ignored the advice of City Atty. Robert M. Myers and instead accepted the language suggested by McCarty’s attorney for the wording of the hotel ballot measure.

Myers, who was visibly upset at being spurned, had suggested that the council ask voters if the project should be approved, while McCarty’s attorney, Chris Harding, suggested that voters be asked if the council’s approval should be repealed.

Myers said he drafted the language to comply with a request by Councilman David Finkel to find a way to have voters vote yes if they favor the hotel and no if they oppose the hotel.

But Harding said he preferred his wording because he feared that asking voters to approve rather than repeal the council’s approval of the project could leave the developer’s so-called vested right to build the hotel open to a legal challenge if another ballot measure that would ban all new hotels on the beach is also successful.

Now, voters opposing the hotel will have to vote yes to repeal the council’s approval and no if they support the hotel.

“It is designed to confuse the matter,” Genser charged.

Sharon Gilpin, a spokeswoman for the Save Our Beach committee, which circulated the initiative to ban beach hotels, said she was disgusted by the council’s action and added that there has been growing discussion about recalling some council members.

Council members Christine Reed, Herb Katz, William H. Jennings and Judy Abdo voted for the project. Mayor Dennis Zane, Finkel and Genser opposed it.

Reed, Jennings and Finkel are up for reelection this November. Reed and Jennings have filed for reelection. Finkel will not seek a second term and instead is running for Municipal Court judge in Santa Monica.

In addition to the Save Our Beach initiative, a competing initiative that favors McCarty’s project will be on the ballot. Circulated by a group called Santa Monicans for a Liveable Environment, it calls for a three-year moratorium on beachfront hotels but would exempt McCarty’s hotel.

Doug Badt, owner of the Sand and Sea Club, has been the primary source of funds for the so-called SOB initiative, and McCarty has provided most of the money for the so-called SMiLE initiative.

The fight over the hotel has divided neighbors, friends and allies. It has split Westside liberals and Hayden supporters.

Supporters of the hotel say the city badly needs the $1 million in yearly revenue it will provide for maintenance of the beach. In addition, they say the city will get, at no public expense, a community center, an arts and environment center and public showers, lockers, and bathrooms. McCarty has also suggested that a portion of the nearly $2 million in taxes and fees the project will generate should be used for local schools and recreation programs.

Opponents of the hotel say it is inappropriate to allow an upscale hotel on public beachland. They say the project will further congest Pacific Coast Highway and contribute to air and water pollution.

Opponents also note that the money McCarty has dangled in front of community and PTA groups in exchange for their support is not even his money to give, but rather public funds to be dispersed at the discretion of the City Council.

Supporters and opponents of the hotel will have to compete for voters’ attention in November. Santa Monica residents will also be deciding on candidates for the Rent Control Board, the Santa Monica-Malibu Unified School District, the Santa Monica Community College Board of Trustees and the Municipal Court.

There may be as many as eight ballot measures, including two competing measure that would allow rent increases on voluntarily vacated apartments. The council is expected to decide the final language for its rent-control measure Tuesday.