Rick Caruso's tax break

The L.A. developer bought Montecito's Miramar Beach Resort in 2007, before the recession and credit freeze. In the ensuing five years, he's been slugging it out with community groups on his plans to overhaul the property. After endless back and forth - and with the empty resort in a shambles - Santa Barbara County appears close to an ordinance that would provide Caruso and other hotel developers with a tax rebate. It would apply to new four- or five-star hotels that cost $50 million or more to build, as well as existing hotels that renovate at a rate of $50,000 per room. (Caruso would be able to recoup around $18 million.) But it would only involve unincorporated portions of Santa Barbara County, which put hotels in places like Santa Berbara and Goleta at a disadvantage. From the Santa Barbara Independent:

While the ordinance would apply countywide and not just to the Miramar, it was Caruso who approached county officials with the idea. Similar concepts have worked in places like Palm Springs, downtown L.A., and Orange County, he said. As county officials looked into the proposal, CEO Chandra Wallar said, they became "more and more convinced" it could work in Santa Barbara. One person not convinced is 2nd District Supervisor Janet Wolf. She said she was concerned the move would not be fiscally beneficial for the community, that it was bad public policy, and that it could be setting a bad precedent.


Third District Supervisor Doreen Farr, however, noted that the board wasn't voting to give any developers the rebate just yet, but only deciding whether to move forward with the concept. Once presented with the proposed ordinance, the board will have to vote to adopt it, and even then will have to decide on a case-by-case basis whether to award the rebate to developers. The board voted 4-1 (with Wolf dissenting) for county staff to draft a proposed ordinance, which staff will bring back to the supes in May or June.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
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