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Planning Commission Approves Alcohol Permits for Union Hotel

By Oliver Lukacs
Staff Writer

August 21 -- It is now okay to enjoy your $14 martini at the Viceroy Hotel until 2 a.m. in the restaurant, bar, lounge, lobby, waiting areas, meeting rooms, pool deck, patio and/or the privacy of your room, following the Planning Commission's unanimous approval of alcohol permits early Thursday morning.

The decision, opposed by a small group of area residents, could be appealed to the City Council.

A standard amenity for customers of the former Pacific Shores Hotel for roughly three-decades, the martini privilege hadn't come into question until a recently discovered glitch in the licensing paperwork submitted to the City by the new owners.

The glitch threatened to prohibit alcohol consumption after 10 p.m. by the pool and on the outdoor patio eating area of the Whist restaurant, which has made the Viceroy a chic, world-famous, after-hours hangout.

At stake was more than just an inconvenient drinking schedule, hotel officials argued. Deny the permits, and the hotel -- only the second unionized hotel in the City -- could loose its competitive edge, leading to a projected loss of $2.5 million an year and forcing it to close its doors and lay off 180 union employees, officials said.

Urged on by a legion of 60 hotel workers, local labor activists and residents who packed the chamber for a dizzying four-and-a-half hours of testimony and debate, the Planning Commission agreed to nearly all the hotel’s requests.

The key issue was whether the alcohol privileges were grandfathered from the previous owner, as Viceroy officials contended, or whether it was an expansion of liquor services some commissioners have often tried to constrain.

By the end of the session -- which dragged nearly as late as the bar's last call -- the commissioners concluded that denying the eight-story hotel on Ocean Avenue and Pico Boulevard the privileges enjoyed by surrounding five star hotels would unfairly “handicap” an otherwise model business.

"The City should not be given special privileges when they come before the commission as the developer, nevertheless, we do give them special privileges," said Commissioner Julie Lopez Dad. "They should be held to the same standards as other projects are.

But, she added, “To handicap a project that is being responsible and responsive does not make sense, especially when there are other entities out there who have worked against what the City has wanted and what the City has passed, and has gained advantages.

“And I am talking about Shutters and Casa del Mar, which in my view should not even be legitimate in this city,” said Dad, referring to the two non-union hotels across the street that led the fight against the City's failed Living Wage law. “In this case we should give to the City, who’s land this is, what other projects already have, in other words not create a disadvantage.”

Commissioner Geraldine Moyle, who was attending her last meeting after announcing her resignation earlier this month, agreed.

“Guests expect alcohol with their room service," Moyle said. "From that point of view, we really can’t look at this as simply a food and beverage enterprise. It isn’t. It’s a five-star hotel. It is saturated in alcohol.

“We are looking at a situation where people are accustomed to obtaining alcohol in a wide variety of settings, but also at prices and conditions that are not at all comparable with bars," Moyle said. "In that respect, the primary message I’ve been getting from the testimony tonight is a request for a level barstool, as it were, with every other large hotel in the neighborhood.”

Kate Bartolo, the senior vice-president of Kor Group, which owns the hotel, argued that a 10 p.m. cut off on drinks in areas inside the hotel, and especially on the outdoor patio of the restaurant, already is killing the economic engine behind the hotel’s success -- private parties.

The hotel, which opened a month before the 9/11 terrorist attacks, quickly had to change its business model from catering to a tourist demographic -- which virtually evaporated -- to targeting a local clientele and offering special events. Accommodating outdoor alcohol service, Bartolo said, is the lifeblood of keeping that business alive.

“Restaurants in hotels is what creates buzz," Bartolo said. "Buzz is good. That’s what leads to private events. We’re in business for private events… which leads to extended occupancy.”

Ralph Waxman, a head waiter at the Viceroy, gave a first hand account of the effects alcohol restrictions have had on workers' income, much of which depends on a lively patio and the tips from happy customers.

“The Viceroy is one of only two hotels in the city with a collective bargaining agreement, and as result of this I receive free health insurance, as well as a higher income," Waxman said. "And this income has allowed me to improve my quality of life, assist my family and save towards my dream of owning a home.

“Sadly, since the restrictions on our alcohol service have been in effect, our business has significantly decreased, my income has been adversely affected, and I’ve had to begin using my savings to make up the lost income,” Waxman said.

“If we are not allowed to serve alcohol and food after 10 p.m., every single one of us will suffer a significant loss of income," he added. "I spoke to many hotel guests who will not be coming back to the Viceroy due to outdoor restrictions, and that loss will have a devastating effect on our business and will effect our non-tipped employees as well.”

Patio service accounts for 70 percent of food and beverage sales during summer and 40 percent in the winter, Bartolo said. Roughly 40 percent of the food and beverage sales are alcohol, she said. The restrictions, Waxman said, have led to an average decrease of 30 to 50 percent in sales.

But an increase in sales comes at the expense of neighboring residents' peace and quiet, said Stephanie Barbanell, the leading oppponent of the project and the only one of the nearly 30 speakers who opposed the permits.

Barbanell complained that the hotel’s alcoholic liberties will create a noise nuisance from customers drinking on the outdoor patio until 2.a.m.

Instead of using the proposed Draft Noise Ordinance -- which measures sound in decibels -- Barbanell suggested a rule that would prohibit sound from traveling more than 10 feet from the property line in order to keep the hotel’s sounds below ambient noise.

Concerned about noise, the commission left a condition in the license that prohibited live amplified music after 10 p.m.  However, the commission eliminated another condition that would have prohibited non-amplified music after 10 p.m.

Before the vote, Commissioner Jay P. Johnson worried about the “night-club-ization” of a hotel, while Commissioner Arlene Hopkins complained of “not feeling comfortable” with the proposed Noise Ordinance the City Council is expected to revisit next month and said that Barbanell's suggestion should be heeded.

Before the board agreed to stick with the regular noise ordinance, Commissioner Terry O’Day pointed out that “most of what we heard about from public comment about the noise issue was that it’s not a problem.”

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