A hotel developer is facing a record fine for building a luxury beach hotel in violation of the initial building permit.
The California Coastal Commission hit out at Sunshine Enterprises in the ‘bait-and-switch’ building scheme, and recommended it pay a record fine of nearly $25 million.
The developer violated a state law that protects public access to beach areas.
Sunshine Enterprises initially had a permit approved to build an affordably priced hotel on land near the Santa Monica Pier which already houses pricy hotels.
Under the permit conditions the new hotel was not allowed to house a bar, restaurant, spa or other ‘luxury’ amenities, and should have a guide price of about $165 per night.
The company allowed that permit to expire and then built the more upscale Shore Hotel selling rooms for $300-$800 per night.
The CCC approved a $15.5 million penalty and up to $9.5 million in additional costs.
It is the largest penalty ever imposed by the agency.
"We hope this is a painful price to pay. We want this to be a deterrent," said commission supervisor Andrew Willis.
"Shore Hotel recognizes the hotel was opened without the Coastal Commission’s permit and regrets this violation took place and the length of time it has taken to rectify this violation of the Coastal Act," the company said.
Sunshine Enterprises lost a court case and subsequent appeal against the commission which denied a new permit.
"The court upheld that it was a bait-and-switch," said Lisa Haage, the commission’s chief of enforcement.
