It appears that the effort to revive the dilapidated cluster of cottages in Montecito that once was the Miramar Hotel has seen its third suitor come and go, but the dance isn’t over.

After a 12-hour meeting Wednesday, the Montecito Planning Commission decided to require that Rick Caruso — the third potential developer of proposal to restore the Miramar Hotel in eight years — undergo the kind of study that he had said from the beginning he was unwilling to do.

The commission voted 4-1, with Chairman Bob Bierig casting the nay, to require Caruso to conduct a partial environmental impact review regarding water supply.

In a surreal twist, the meeting ended with Caruso — who had owned the 15-acre property along Highway 101 for 18 months — begging for his project to be denied so he could sell the property more easily.

“Let me out, let me go,” said Caruso, the billionaire developer of shopping centers and a potential mayoral candidate for Los Angeles. “I have never thought in my life I would ask for a denial of a project, but we need that for our lenders in order to put the project up for sale.”

Flustered by his request, the commission refused.

“I think your projects are beautiful, and I would love to have you here,” Commissioner Sue Burrows said.

The commission will continue the hearing on Aug. 28.

Asked by reporters after the meeting if he’s out for sure, Caruso said: “I think there is a very small chance we’re going to go forward with this.” 

The proposal for a new five-star hotel at 1555 S. Jameson Lane had received the blessings of Santa Barbara County staff, the Montecito Board of Architectural Review and the Montecito Association.

But the project was nonetheless controversial, drawing dozens of passionate supporters and opponents alike.

In general, supporters said the blight by the freeway needs to go, and credited Caruso as an able developer with a proven track record who had a shot at building something that would be economically viable and aesthetically pleasing. They, like Caruso, maintained that there was no need for an EIR, because a former project to revive the hotel had been given clearance before being abandoned in 2000 by Studio 54 co-founder Ian Schrager.

Critics have said the project needs an EIR, in part because it’s larger: The Caruso project’s net floor area was about 33,000 square feet larger than Schrager’s approved plan of 137,000 square feet. (However, Caruso’s proposal included fewer rooms than Schrager’s.) They said the proposal was too large, pointing out that it failed to meet zoning requirements on matters such as height, setbacks and parking. They also worried about flooding, given his plans to fill in a flood plain.

For its part, the commission was reluctant to take most of the studies by the county staff or Caruso at face value. As such, they delved deep into the details. Suspicious that Caruso may have under-calculated the net floor area of his project, for instance, they questioned matters such as the size of hallways, or what constitutes an enclosed balcony. (Both of those items can be exempted, so there could be an incentive to exaggerate their size.)

The commission also was distrustful of the county staff’s analyses on parking and traffic. Although Caruso’s plan called for 135 more parking spaces than the Schrager plan — and, the staff reported, 75 more spots than the similarly sized Biltmore Hotel — the commission was concerned about the specific parking plan. Bierig didn’t like how it was all valet parking, saying he had a hunch that many people would forgo handing over their keys in favor of parking in the surrounding neighborhood.

Commissioner Jack Overall was skeptical of Caruso’s claim that his hotel would only require 100 employees at any given time, noting that most other comparable hotels — such as the Biltmore — seem to have considerably more. Overall wanted more information on how traffic would be affected in the event that the employee count was a gross underestimate.

The commission made the decision about the water study after hearing legal advice from county counsel. Chief Deputy Counsel Michael Ghizzoni said the commission could ask for a “subsequent EIR” on a given topic — complete EIRs study all potential effects — if the commission believed past assessments to be inadequate, or if new information had been received that hadn’t been known at the time of the earlier approval. In the case of water, Ghizzoni suggested the “new information” clause may apply, citing how the Montecito Water District recently sent out letters informing residents that the district’s supply was outstripping reliable demand.

Earlier in the day, the water district’s general manager, Tom Mosby, told the commission he was obligated to provide water to the Miramar. Mosby said refusing the Miramar would be akin to refusing to serve water to a resident who left town for 10 years and returned.

Commissioner Michael Phillips made the motion to require a subsequent EIR on water supply. “I just think we have such a huge obligation,” he said.

The meeting ended on an emotional note.

Bierig told Caruso that he believed Caruso had been led down the wrong path by some of the groups he had been dealing with.

“Our mission is to let you do a job that fits into our community, but the project does not do that,” he said.

When it became clear that Caruso wanted out, Phillips considered redacting his motion, but decided against it. At that point, Bill Palladini, president of the Montecito Association, which is essentially a gigantic neighborhood association whose recommendations carry clout but are nonbinding, stormed out of the room.

Staff members on Wednesday said the subsequent EIR could set the project back by somewhere between six and nine months. Caruso has said he is uninterested in conducting an EIR because it would be too costly and he believes all the necessary studies have already occurred.

Once a thriving hotel that catered to the famous and middle-class alike, the blue-roofed Miramar opened in the late 1800s but has been closed since 2000. In 1998, Schrager paid $30 million to purchase the property from the estate of June G. Outhwaite, whose family had owned it since 1939. Financial difficulties forced Schrager to shut down the project in 2000, and he later sold it to hotel magnate Ty Warner for $40 million. Warner, owner of the nearby Four Seasons Biltmore Resort and San Ysidro Ranch, decided that the rigors of renovating another hotel project in Montecito were too much. Warner sold the property to Caruso for an undisclosed sum a year-and-a-half ago.

Caruso was hoping to reopen the Miramar by 2010.

Noozhawk staff writer Rob Kuznia can be reached at rkuznia@noozhawk.com.