The Santa Monica City Council has asked staff to negotiate a development agreement with Hill Street Partners III LLC, which wants to build a 75-room, four-story hotel with a roof deck and three levels of subterranean parking on Ocean Avenue in Santa Monica.

Councilmembers voted Tuesday, August 9th, to move forward with the project after Hill Street Partners hired a new architect in an effort to resolve a conflict of interest.

Hill Street Partners is based in Santa Monica.

The project consists of redeveloping three properties at 1327, 1333 and 1337 Ocean Ave.

A landscaped public plaza would be installed and two two-story historic buildings would be adaptively reused.

The two historic structures are a Victorian house — which would be relocated — and a Spanish Colonial Revival building.

“The Landmarks Commission and the Planning Commission have both reviewed the proposed project and support commencing negotiation of a development agreement,” said city planning manager Amanda Schachter.

“Commissioners had some specific comments they felt needed to be addressed in the project, specifically retaining more of the Spanish Colonial Revival building facade.”

The project was presented to the City Council in concept form after changes were made to a proposal filed last year.

Hill Street Partners originally filed an application to move the Victorian house and demolish other buildings on the site.

The Landmarks Commission agreed to allow relocation of the house — which had previously been landmarked — but then the commission also landmarked the Spanish Colonial Revival building.

“Rather than fight, appeal and get into an adversarial situation, our client actually chose to retain both buildings as historical landmark structures,” said Ben Resnick, an attorney representing Hill Street Partners.

“Our client invested substantial time and money into designing new plans which incorporate both landmarks.”

In January this year, a development agreement was placed on the City Council agenda.

Resnick said Hill Street Partners was told on the day of the hearing that there was a conflict of interest involving mayor pro tem Herb Katz.

Katz is a principal partner in RTK Architects based in Santa Monica and was also the project’s principal architect.

Resnick said Hill Street Partners had two options: to terminate the services of RTK or go through a development review process rather than a development agreement process.

Hill Street Partners prepared a development review application package, only to be told by city staff members months later that the application could not be accepted.

City staff members would not agree to a development review process because the project involved obtaining two variances — one for height and the other for reduced side yards.

“Staff told us they didn’t think they could make findings for a development review process and wouldn’t accept a filing for the review process, so here we were stuck again,” Resnick said.

To get a development agreement, Hill Street Partners terminated the services of RTK and hired JTD Architects based in Venice.

“Here is a project with enthusiastic community support and support from the Landmarks and Planning Commissions,” Resnick said.

“What we are asking you to do is simply direct staff to move forward on this and hire the EIR (environmental impact report) consultant quickly.”

Janek Tabencki Dombrowa of JTD is now the project’s executive architect.

The hotel was also scaled back from 77 rooms to 75 rooms.

“The requests by the Landmarks Commission for design adjustments have been made,” Dombrowa said.

“The Planning Commission also had design recommendations and those have been incorporated into the project as well.”

Landmarks commissioners made eight recommendations, including that Hill Street Partners hire a contractor who specializes in historic preservation to move the Victorian house.

Other recommendations include that the transition between the landmarked structures and new structures show only subtle differences in design and that Hill Street Partners provide funding to implement the city Historic Preservation Element.

Planning commissioners made several design, operation and compliance recommendations.

Commissioners said Hill Street Partners should use native plants and tree wells, install a water fountain, use more arches and balconies and provide a cut-out driveway for valet services.

They also suggested that Hill Street Partners consider union representation for hotel staff, apply for a conditional use permit for any alcohol service and comply with the environmental Sustainable City Plan.

Resnick said the Landmarks and Planning Commissions unanimously approved the concept of the project.

“On a conceptual level, this is a terrific project and I am excited for the development agreement,” said councilmember Ken Genser.

“The project is the kind of scale and reflection of our past that most Santa Monicans would approve of.”