$1 Million Dollar Fine for ignoring California Coastal Commission is Actually Small Potatoes for Shore Hotel in Santa Monica

The owners of a luxury hotel built in Santa Monica without the required permits have agreed to pay a total of $1 million in penalties and restitution, the Los Angeles County District Attorney's Office announced today.

The final judgment, approved Dec. 14 by Los Angeles County Superior Court Judge Anthony Mohr, provides discounted and affordable room rates.

"The planning and permitting process ensures our community has the opportunity to provide input into what our neighborhoods look and feel like for decades to come," said Los Angeles County District Attorney George Gascón. "When that process is subverted, some of us are making decisions for all of us."

Half of the fees imposed under the settlement terms also may benefit essential workers of the COVID-19 pandemic.

The civil complaint alleges that Sunshine Enterprises violated state law by falsely representing to the California Coastal Commission that its proposed construction of the Shore Hotel would provide low- to moderate-cost lodging to replace two older lower-cost motels formerly on the property.

Instead of waiting for its permit to be approved, Sunshine demolished its existing motels near the Santa Monica Pier and erected in its place the new upscale Shore Hotel, which the company's website described as a luxury boutique hotel, prosecutors said.

The case was prosecuted by Assistant Head Deputy District Attorney Hoon Chun and Deputy District Attorney Seza Mikikian of the Consumer Protection Division.

Under the settlement terms, Sunshine must pay $250,000 in civil penalties - a sum in addition to the $15.6 million penalty already paid by Sunshine to the California Coastal Commission. In May, the commission levied the penalty against Sunshine because the hotel was built without proper permits that include providing for more affordable lodging in the area.

The combined civil penalties paid to the commission and the District Attorney's Office is the largest penalty ever imposed for violations of California's Coastal Act, which regulates development of coastal areas and mandates the commission preserve affordable access to California's coastline.

In addition to civil penalties, Sunshine must pay $750,000 in restitution to the District Attorney's Consumer Protection Trust Fund for the enforcement of consumer protection laws.

However, the settlement incentivizes the company to pay a large part of that amount - up to $500,000 - by providing discounted room rates to first responders and other essential workers of the COVID-19 pandemic.

These essential workers include paramedics, emergency room or intensive care physicians, firefighters, peace officers, school teachers, licensed social workers, grocery store employees, pharmacy employees and postal workers.