After spending $4 million on renovations, the owner of Venice Breeze Suites came close to losing his business over a paperwork snafu and growing backlash against Airbnb

By Gary Walker

The 85-year-old building that is now Venice Breeze Suites originally operated as a hotel

The 85-year-old building that is now Venice Breeze Suites originally operated as a hotel

In the eight years since Carl Lambert bought the boardwalk-adjacent Venice Breeze Suites, he’s $4 million remaking the historic 31-unit brick building into an urban chic apartment-style hotel.

If the three rules of real estate really are location, location, location, Lambert had them covered.

The only problem, he’d later find out, was that the previous owner of this particular location hadn’t filed all the paperwork necessary to convert the building from long-term lease apartment rentals to a hotel.

In the past few years, at least three complaints were filed against Lambert with the Los Angeles Housing and Community Investment Department — each claiming the building had undergone an illegal change of use from apartment to hotel, according to California Coastal Commission documents.

The city resolved its permit issues with Lambert in 2013, but it wasn’t until last week that the Coastal Commission debated whether to grant Lambert a coastal development permit to ratify the expensive changes he’s made.

Citing a rapid erosion of long-term rental housing due to the proliferation of short-term vacation rentals through online brokers such as Airbnb, some in Venice opposed Lambert getting the retroactive permit — including members of the Venice Neighborhood Council who had voted in 2013 to support him.

“Had we the foresight to see the big picture and not give Mr. Lambert a pass because he is a nice guy, because the apartments were remodeled nicely and because no one was aware of the many other [short-term rental] conversions in the pipeline, I am sure the board would not have voted to approve the project,” Linda Lucks, the council’s president at the time, wrote in a letter to the commission.

On Nov. 6, the commission granted Lambert a coastal development permit for Venice Beach Suites with the conditions that Lambert offer his guests alternative transportation options and pay a state application fee of $37,364.

“The proposed hotel reused an 85-year-old building and did not displace it with a lower-cost hotel. It displaced 30 residential units, which are a lower priority use under the Coastal Act and the Venice Land Use Plan. The hotel is also not consistent with a traditional high-cost hotel or even a traditional moderate-priced hotel because of the flexibility and amenities that it offers guests,” a report by commission staff states.

Lambert had two other things going for him: The city granted him permits to do the renovation work, and the building at 2 Breeze Ave. was originally built and long-operated as a hotel.

“During my ownership of the Venice Breezes Suites no renovations have been made without valid city permits,” Lambert said. “Venice Breezes Suites is returning to its original roots, as it has been used as a hotel over the last 85 years.”

The commission’s decision comes as L.A. City Hall is considering new regulations for short-term rentals that would prohibit building owners from converting long-term lease units to vacation rentals and require vacation rental hosts to pay the same short-term occupancy tax as hotel operators.

David Ewing, a politically active Venice resident who signed a petition urging the commission to deny Lambert the permit, lamented the possibility that others may attempt to follow Lambert’s lead.

“We’ve seen whole buildings that have become short-term rentals, and the city has to find a way to enforce the law on these illegally converted buildings,” Ewing said.

Lambert said he supports regulation of the short-terms rental industry.

“I understand the political backlash against Airbnb and other short-term rental operators, but there is a big difference between unprofessional people without the appropriate oversight [and others who pay taxes and are responsive to quality of life concerns],” Lambert said. “I pay the transient occupancy tax, and I think the city should use it to create real affordable housing.”