BeachWalk is back: Plans for a new hotel in Pismo Beach can move forward after regulatory, legal opposition dropped 

Controversial plans to build a large hotel in Pismo Beach are moving forward after the individuals opposing them dropped the challenges that could have stalled or killed the project.

The Pismo Beach Planning Commission approved the BeachWalk Hotel, a planned 128-room, 94,000-square-foot hotel and resort on Pismo’s scenic beachfront between Hinds and Stimson avenues, earlier this year. The City Council later upheld that decision, despite concerns from some regarding the hotel’s size and its impact on the city’s beachfront views and water supply.

The fate of the BeachWalk Hotel was uncertain a month ago, when it faced a review on appeal by the California Coastal Commission (CCC) and was the subject of a lawsuit by a group of concerned residents called Central Coast Environmental Protection, who asked a SLO County judge to halt the project.  

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• IMAGE COURTESY OF THE CALIFORNIA COASTAL COMISSION
• THE BATTLE OF BEACHWALK: After facing an appeal from the California Coastal Commission and a lawsuit from concerned residents, plans to build a large hotel and resort in Pismo Beach are moving toward construction.

Both of those obstacles vanished in late October. The seven people who filed an appeal with the Coastal Commission asked that those appeals be dropped, according to Kevin Kahn, district supervisor for the commission’s Central Coast office. The request came about a week before the commission was set to review the item at its Nov. 5 meeting.

The withdrawal of the appeal on the project occurred shortly after Kahn issued a report for the commission, which recommended that they allow the project to move forward, but with additional, specific conditions attached.

According to the report, commission staff believed that there were “substantial issues” with the BeachWalk project but that the commission should still approve the plans with the recommended conditions.

Among those conditions was a requirement that the project’s developers, Palm Springs-based Nexus Development, pay more than $1.6 million to the California Department of Parks and Recreation for low-cost accommodations. Mitigating the impact of building hotels by funding low-cost accommodations is a requirement under coastal permit regulations. Under the original plan, Nexus would have paid the city of Pismo Beach only $200,000 for low-cost accommodations.

“In sum, the project as conditioned represents a significant visitor-serving addition to Pismo Beach’s downtown core,” the report stated.

Kahn said that the seven appellants withdrew their appeal shortly after the report and recommendations were issued. With the appeal withdrawn, the commission’s suggested conditions of approval for the project are moot.

“[The project] reverts back to what the city approved,” Kahn said.

Under the city’s conditions as they currently stand, Nexus will pay the city $300,000 for future public access improvements at a nearby public parking lot, $300,000 for future improvements at the Hinds Avenue cul-de-sac, and offsets to mitigate the hotel’s water use.

As the appeal of the BeachWalk ended, the legal opposition to the project evaporated as well. Local Attorney Babak Naficy, who represented Central Coast Environmental Protection, confirmed that the group agreed to a settlement with Nexus. A settlement agreement means that the case will be closed once the agreement is finalized.

Court records show that Naficy filed a motion to dismiss the case Nov. 2. The next day the case was dismissed with prejudice, meaning the plaintiffs can’t file another case making the same claims. The amount and terms of the settlement were not publically available, but an
Oct. 28 court filing categorized the case as an “unlimited” civil case, with a demanded amount exceeding $25,000.

Ted Case, president of Central Coast Environmental Protection group and a full-time Pismo resident, said he was not able to comment on the settlement. Case is also listed as one of the seven appellants in the California Coastal Commission appeal.

The withdrawal of the appeal and the settlement in the court case mean the project is free to move forward as planned, according to Pismo Beach City Manager Jim Lewis. 

“The project can move through the building process,” Lewis said. “We are delighted that the resort can move forward.”

City officials hope to begin meeting with Nexus next month to chart a path forward for construction, but Lewis said a groundbreaking date has not been set.

“I know that [Nexus] is anxious to move forward,” Lewis said. 

Staff Writer Chris McGuinness can be reached at [email protected], or on Twitter @CWMcGuinness.