Developer Hit With $15M Fine Over Pricey Santa Monica Hotel

SANTA MONICA, CA — The California Coastal Commission hit a developer with a record $15.6 million fine for what state officials called a "bait-and-switch" building scheme, NBC Los Angeles reported. The Shore Hotel on Ocean Avenue near the Santa Monica Pier, owned by Sunshine Enterprises, was initially built by obtaining a permit for a moderately-priced hotel — but room rates range from $300 to $800 a night, according to agency documents.

At an Oxnard meeting, the commission unanimously approved the penalty against Sunshine Enterprises, which was the largest in the agency's 40-year history, Los Angeles Times reported. However, the commission decided not to immediately levy an additional, staff-recommended $5.9 million in mitigation fees linked to approval of a new permit, according to NBC Los Angeles.

Initially, Sunshine was approved to replace two lower-cost motels with another affordable facility, but they never got that permit issued and it expired, the Times reported.

Then in 2011, Sunshine demolished the motels and built the expensive Shore Hotel without proper permits, violating the state Coastal Act which mandates protecting “lower cost visitor-serving facilities along the coast,” according to the Los Angeles Times.

"We don't want beaches to become only a place for the wealthy. We have many residents who don't live within driving distance to the coast, and they should be able to enjoy it and spend some time," Commission Supervisor Andrew Willis told NBC LA.

In a statement to NBC Los Angeles Tuesday, Sunshine Enterprises said it will pay all penalties and work with the commission to reach "full resolution of this matter."

"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 in the statement.