Housing Aid for Hotel Help OKd : Labor: Resort developer must pay rent subsidies or provide other housing help, council votes 3 to 2.

Developers of a coastal resort must pay rent subsidies or provide other housing assistance to low-income workers or build their hotel elsewhere, the City Council ordered this week.

In what city officials called a “precedent-setting” move, the council voted 3 to 2 Monday night to require the developer of the proposed Monarch Beach Resort to provide rent stipends to one-fourth of what are predicted to be its 580 full-time employees. The developer, Japan-based Nippon-Shinpan Co. Ltd., is seeking approval for a 400-room, five-star hotel and championship golf course along Coast Highway in Dana Point.

While the decision does not specify how much rent help the developer must provide and applies only to the Monarch Beach Resort, Mayor Mike Eggers called the vote “monumental” for a city with two major resorts in the planning stages.

“In the past, the city’s focus on development was always on land use and revenues when decisions were made. From now on, the employee and housing impacts on the city are part of the puzzle,” Eggers said. “I think Dana Point is leading the way of the future.”

In the least-expensive part of Dana Point, one-bedroom apartments average $650, two bedrooms about $850 and 3-bedrooms $950 said John Kutschka, an official of Lantern Village, a residential complex.

Ben Cagle, Monarch Beach Resort’s general manager, said it is too early to tell what the council decision would mean for his project.

“We’re trying to sort out exactly what happened,” Cagle said. “The council gave us some direction last night, but we need to know more. We’re waiting to see what the staff report says and then we will go from there.”

Dan Daniels, the president of the M. H. Sherman Co., which is planning a 27-acre resort and 400-room hotel on the Dana Point promontory called the Headlands, also reserved comment.

“It’s really too early for us to say anything now,” Daniels said.

Where the resort employees will live and how the city might exact assistance from the developer are the next questions to be answered, said Ed Knight, Dana Point’s director of development. The city staff and Monarch Beach Resort staff will together draw up a plan, Knight said.

The housing assistance will be aimed at employees who earn $20,000 a year and less, Knight said. Among the ideas that have surfaced are a shared housing program, a rent subsidy, help with first and last month’s rent and the construction of employee housing projects either on the resort site or off-site.

“This is only a first step. It’s a major step, but only a beginning,” Knight said. “A lot of scenarios can come out of this. We are not even restricted to one type of housing opportunity.”

One plan supported by Eggers is the construction of a single-room apartment complex in an industrial area of the city. Eggers suggested an area of the Doheny Village in Capistrano Beach would be ideal for such a development.

The council decision is considered a victory for residents of the Lantern Village, a crowded residential area filled with apartment buildings, duplexes and four-plexes. Lantern Village residents are credited with first voicing the proposition that the city’s hotel owners should help supply housing for their workers.

Eggers warned Lantern Village residents that this measure would not solve their problems of overcrowding, however.

“Overcrowding and resort housing are two separate issues,” he said. “This is not going to be a cure-all for overcrowding in the Lantern Village. But this measure ensures the resorts will no longer add to the overcrowding. It may not relieve it, but it won’t add to it.”

Not everyone on the council was enamored with the decision to specify what percentage of workers should receive housing assistance. City Councilwoman Eileen Krause called the 25% guideline an “arbitrary number.”

“I wanted to see some staff input and a staff recommendation first. That makes much more sense to me,” said Krause, who along with City Councilman Bill Bamattre voted against the plan. “I preferred letting (Monarch Beach Resort) know our intent would be to put a strict percentage on the assistance, but to wait for input first.”

Krause did agree that the decision would have tremendous reverberations for the city.

“This is a huge decision and I’m not comfortable with it,” she said. “This impacts our businesses, it impacts our city in lots of ways. Will this apply to other large employers? I don’t want to discourage businesses from coming here. No one even talked about the benefits we get from resort development.”

But resort developers had been warned last summer with the passage of the city’s first General Plan that some sort of housing benefits would be extracted from them, Knight said.

“The General Plan says some sort of housing would have to be provided either on-site or off-site,” Knight said. Monarch Beach Resort “stated consistently, from day one, that it would not provide on-site housing.”

Monarch Beach Resort consultants presented the council with the results of their own housing study Monday, which indicated that Dana Point is “housing rich and jobs poor.” The report suggested that the city should set up a housing commission and a housing trust fund that could accumulate revenues for affordable housing from such things as transient occupancy taxes, called bed taxes, which are generated by hotels.

But that idea was rejected.

“Hotels in Dana Point are our source of revenue,” said City Councilwoman Karen Lloreda. “You start dipping into the transient occupancy tax fund and you take money away from the city. That’s the money this city runs on.”