Aerial view of American Tin Cannery Comstock hotel (copy)

An earlier artist's rendering of the American Tin Cannery hotel project by developer Comstock Development.

A majority of the Pacific Grove Planning Commission rejected the 225-room American Tin Cannery hotel project on Nov. 18, declaring the proposed complex was too big, would destroy too many trees and would create too much risk for the health and safety of neighboring harbor seals, among other impacts.

The 4-2 vote echoed a decision made by members of the city's Architectural Review Board nearly one year ago in December 2020. That board said the project should move forward, but on a smaller scale.

In response to the ARB the developer, Comstock Development, scaled back some of the project. An underground garage nearest the beach where harbor seals live was eliminated to reduce the noise and vibrations from necessary excavations of granite bedrock. Other changes to the project included pushing back top floors and replacing the 79 existing trees targeted for removal with 136 trees. 

The six commissioners deliberated for several hours over two meetings—the hearing to consider the project began on Oct. 28—before arriving at their decision after 10pm. (Chair Steven Lilley recused himself in October, due to owning property near the project, which is located on Ocean View Boulevard around the corner from the Monterey Bay Aquarium.)

The two commissioners who voted in favor of the hotel—Jeanne Byrne and Bill Bluhm—called it an excellent project worth the economic benefit it would bring to the city. They contended that the developer had listened to residents' concerns and adequately mitigated negative impacts.

The four commissioners who opposed it—Vice Chair Mark Chakwin, Robin Aeschliman, Don Murphy and Claudia Sawyer—stated that although they thought there were issues with Comstock's proposal, they did agree the now underutilized ATC should be repurposed into a hotel at some point.

Besides those commissioners' concerns about size and environmental impact, water availability was cited by Sawyer as a concern. Water came up as an issue during the October meeting when just hours before it started Erik Ekdahl, deputy director for water rights for the State Water Resources Control Board sent a letter to the city that to some sounded ominous.

Prompted by comments raised by a coastal planner with the California Coastal Commission about water for the hotel, Ekdahl reminded city officials of the cease-and-desist order the Monterey Peninsula is under, which requires the California American Water Company to stop diverting water from the Carmel River by Dec. 31 and develop a permanent replacement water supply for current and future demands.

"Most relevant here, Cal-Am is generally prohibited from serving Carmel River water to new service connections and from serving 'any increased use of water at existing service addresses resulting from a change in zoning or use,'" Ekdahl said about a point referred to as "Condition 2."

"The City and District appear to imply that the Proposed Project would not result in any increase or intensification of water use under Condition 2. They highlight the water-saving measures that may in fact cause the Proposed Project to use less water" than some water use factors would indicate," he said. He follows with a "but" that disturbed some commissioners.

"But the City and District also appear to have disregarded standing interpretive letters issued by my predecessor, misconstrued unresolved proposals from a prior 'meet-and-confer' process and included in the sites' water use baseline 2.734 acre-feet of water that appear to have been neither permitted for use by the District nor used at the site during the applicable time period," Ekdahl said.

He concluded by saying "that Cal-Am may be prohibited from fully serving the Proposed Project under the State Water Board's current water rights cease and desist order and the (California Public Utility Commission's) current water service moratorium."

Ekdahl's letter was disturbing enough to some on the planning commission that it was suggested that maybe they shouldn't carry on with the hotel hearing at all. City Attorney David Laredo assured the commissioners that they could continue, and reported that he and Monterey Peninsula Water Management District General Manager David Stoldt had concluded the letter was merely a reminder the city had to follow the state water rules.

Stoldt himself wrote a letter to the city stating that the city was following the rules when it came to determining if the project would be utilizing the allowed amount of water.

At the start of the meeting on Nov. 18, P.G. Planning Director Alyson Hunter specifically told commissioners that neither the California Coastal Commission nor the state water board are the regulatory agencies when it comes to water, it's the MPWMD that issues the water permit.

"My understanding of the water resources board letter was reminding everyone that there are rules and it's very complicated here on the Peninsula, and we shall be following the rules that are in place," she said. "That's a standard letter from an agency that's simply there to remind everybody to follow all the rules."

Comstock's representative, Debra Geiler, says the company is weighing its options now that the planning commission rejected the project. They may appeal to the P.G. City Council.

"Here’s what was clear, I don’t think the project as it was revised—or in any event—was considered on its merits and consistency with the city’s rules and policies," Geiler says.

In addition, Geiler says commissioners did not take into account changes made to the plan in direct response to concerns raised at the Oct. 28 meeting, including an increase in native species of replacement trees added to the project. 

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