By Jason Islas
Lookout reporter

Editor's note: This article has been updated to further clarify the history of the Embassy Hotel and Apartments building, built in 1927 and currently known as the Palihouse Hotel.

March 19, 2014 -- A boutique non-union hotel in a quiet Santa Monica neighborhood just north of Downtown has hit a road bump in its quest to sell alcohol to guests.

The powerful regional hospitality workers’ union -- UNITE HERE Local 11 -- has called for the city’s Planning Commission to go against staff’s recommendation at its Wednesday meeting and deny Palihouse Santa Monica the permit it needs to serve alcohol.

Citing a lack of responsiveness on the part of Lighthouse Investments, which owns the property at 1001 3rd Street, the union sent the Planning Commission a three-page letter Monday outlining its opposition to the Palihouse’s request.

“UNITE HERE Local 11 has reached out to the owners of the Palihouse, Lighthouse Investments, on multiple occasions,” wrote Melanie Luthern, an organizer and research analyst with the union.

“We had hoped to discuss with them how we might be able to offer training to employees and outreach to the community,” she wrote.

Luthern wrote that the hotel owners never returned the union’s calls, adding that neighbors of the hotel have also had difficulty getting in touch with the owners.

“We believe that an Applicant’s ability to respond to the community is of paramount importance on an occasion when that Applicant would like to receive a long-term vested right from the community,” she wrote.

When asked if the union had plans to organize Palihouse workers, Luthern said that at the moment the union was mostly concerned with making sure the hotel is a good member of the community.

Palihouse representatives did not return several requests for comment Tuesday.

Luthern’s letter goes on to list about a dozen other points the union believes will be problematic if the hotel gets its permit and challenges staff’s claim that allowing the sale of alcohol “will not adversely affect the welfare of neighborhood residents in a significant manner.”

The Wilmont Neighborhood Coalition -- the local neighborhood group for the area surrounding the hotel -- has also taken a stance against letting the hotel sell alcohol.

“This hotel is surrounded by a residential neighborhood,” said Wilmont Chair Alin Wall.

“Families and other residents would be seriously and negatively impacted by the granting of this (permit),” she said.

This isn’t the first time that the 38-room Palihouse Hotel, which bills itself as “southern California’s finest coastal luxury long-stay hotel,” has come under fire from its neighbors.

Originally built in 1927, the Embassy Hotel and Apartments building -- now the Palihouse Hotel -- included 19 rent-controlled apartments and 19 hotel rooms as of 2000, according to City officials.

"It is unclear exactly when the property began functioning with hotel guest units," staff said.

"However, a Settlement Agreement in December 2000 between the property owners and the City of Santa Monica determined that 19 units were operating as hotel units and 19 units were rent controlled apartment," City officials said in an official report last June.

"Subsequently, in another Settlement Agreement entered into May 10, 2011, the remaining 19 rent controlled units were authorized for conversion into hotel units, with certain rent control conditions, thereby enabling the full conversion of the building to a hotel use," the report reads.

According to the report, the Rent Board tried to prevent the building's previous owners from converting the units into hotel rooms, but a 2011 court decision found that, under State law, the Embassy's owners were within their rights.

Hotelier Avi Brosh and a group of investors bought the property in December 2012 and began remodeling last year, which led some to complain that the hotel was a nuisance in the neighborhood.

Responding to complaints from the hotel’s neighbors, City officials put out a report last June affirming that the hotel’s owners were following proper procedure during the remodel. (“Controversial Santa Monica Hotel Renovation Follows the Rules, Staff Says,” June 25, 2013)