Coastal Commission Says Yes to Lido House Hotel

Lido House Hotel, the boutique hotel slated to replace the old Newport Beach city hall on the Balboa Peninsula, is one step closer to becoming a reality.

The project plans cleared the California Coastal Commission on Wednesday in a 10-2 vote. Commissioners Martha McClure and Erik Howell dissented.

The application from R.D. Olson Development asked CCC for permission to demolish the existing public facilities and construct a new four-story, 130-room hotel with 4,453 square feet of function space, 3,195 square feet of restaurant, 856 square feet of retail floor area, and 148 on-site parking spaces. The item also asks to reconfigure the public street parking on 32nd Street.

In a related but separate item, the commission unanimously approved the staff recommended modification of changing the land-use to visitor-serving commercial designation (previously designated for public facilities) and adopt specific limits for any exception to the 35-foot height limit while specifically allowing “tiered” height projections above 35 feet.

There were lengthy discussions and studies about what to do with the old city hall site, Newport Beach Mayor Ed Selich told the commissioners. The site had three key ingredients necessary for a hotel, he explained: Access, visibility, and demand generators to supplement the visitor serving uses.

Bob Olson, president and founder of R.D. Olson and 15-year Balboa Island resident, said the hotel will be designed in “Newport nautical” style.

“It’s historical Newport Beach, but its roots are from the East Coast,” he explained. “This architecture was relevant 100 years ago, it’s relevant today and it will be relevant 100 years from today. The architecture is timeless.”

It will be an “essential anchor” to revitalize the declining Lido Village, Olson said, and will be the “gateway” to the peninsula.

Commissioners focused their discussion around the proposed low/no cost educational program for kids, dubbed Fostering Interest in Nature.

Since the hotel does not include any low-cost overnight accommodations, the applicant is allowed to pay an in-lieu fee of about $1.4 million into an account that will be used to provide lower cost overnight accommodations elsewhere in the city.

The suggested use for those funds is the FIN program. It would be established by the city and would aim to bring in 420 disadvantaged fifth and sixth grade students annually from Title 1 schools. The kids would stay for a three-night educational camp at the Newport Dunes Resort and Marina. The children would learn about nature and be provided with opportunities to kayak, surf and swim.

“This program will bring kids here who rarely have a chance to even come to the beach,” Olson said.

Olson’s $1.4 million commitment will run the program for 10 years.

Many of the commissioners expressed concerns about how the program will continue after the 10 years and $1.4 million obligation are up.

While the program is a creative way to provide coastal access and activities to kids from inland areas, it’s not set up in a way that would generate revenue or eventually fund itself, Commissioner Mary Shallenberger noted. The hotel is continuously creating revenue, she pointed out, there should be a way to commit to funding the program perpetually. It’s not unreasonable, she added.

Representing R.D. Olson, Sherman Stacey of Gaines & Stacey LLP said that since the cost of making the fund perpetual is unknown and it affects the applicant’s investment and obligations, he couldn’t confirm that his client could actually make it happen.

“(But) you can,” Stacey said, motioning toward the commission. “You’ve got $20 million in the bank, you can make this program perpetual… The city could come to you and you could make this possible to be perpetual without burdening my client with more than you have burdened others.”

Commissioner Martha McClure also suggested a 10-year review from the city.

If the program were to get canceled in 10 years for lack of funding the city should have to explain why — when public land is being used for a private enterprise that’s likely making ”boatloads” of money — they can’t find a way to pay for a few hundred kids to get to the coast, McClure said.

Newport Beach City Manager Dave Kiff noted that if the program is successful in those 10 years he felt confident the program could continue to be funded through grants or other measures.

“We’re very sincere about wanting to do this and wanting to continue this,” Kiff said.

The idea to fund it for the life of the building is more of a civic responsibility than a commission responsibility, Commission Chairman Steve Kinsey said.

“It would be appropriate for the hotel and the city of Newport to find a way to create a sustainable funding source,” Kinsey said.

Commissioners voted on an amended motion that included a requirement for the applicant to run an educational program for at least 350 students for the life of the project, but it failed without a majority at 6-6. Chairman Steve Kinsey and commissioners Dayna Bochco, Gregory Cox, Wendy Mitchell, Effie Turnbull-Sanders, and Mark Vargas voted no. It would be very difficult to sustain, Kinsey commented.

During public comment, residents on both sides of the project spoke.

Supporters argued that the hotel fits in with the community, will revitalize the neighborhood, and won’t be obtrusive, and more.

Newport Beach Mayor Pro Tem Diane Dixon, whose district covers the peninsula, called the project a “win-win” for both the community and visitors.

The hotel has earned significant community support, she said. Although when she asked the crowd for their opinion, she got a mixed reaction of supportive waves and opposing thumbs down (since applauding and booing is not allowed at CCC meetings).

Opponents noted that it should be subject to the height limit, it does not provide low cost accommodations/service, and traffic, and more.

There is a height limit for a reason, argued longtime Newport Beach resident Allan Beek in opposition to the project. Apparently that only applies when other people want to build something, not when the city wants to construct a project, Beek said.

The project does not provide low-cost beach access for visitors coming in from other areas of Orange County, Beek continued.

If this is supposed to revitalize a “blighted area” it should be something that ordinary people should be able to afford, not just those with money, Beek said.

“This is access to the water for the one percent,” Beek said. “We don’t need a lot of high prices forcing people out.”