1018 Garden St. in Santa Barbara.
This site at 1018 Garden St. in Santa Barbara will be turned into hotel rooms that are individually owned. Credit: Joshua Molina / Noozhawk photo

It took more than two hours of — at times — tedious questions, but eventually the Santa Barbara Planning Commission voted unanimously to support a unique hotel-condominium project on Garden Street.

The council voted 6-o Thursday to create a 13-unit hotel project, where the units can have individual owners, overseen by a management team.

It’s a first-of-its-kind for Santa Barbara; it’s not quite hotel, and not quite vacation rental.

“We’re putting our faith in you,” Planning Commission chair Roxana Bonderson. “You’ve had two-plus hours here of us trying to explore ways to help you get what you came here for, so please do us right and do a good job.”

Bonderson noted that it was a new thing for Santa Barbara.

“You might be setting the precedent for a whole new world of projects like this in the community,” Bonderson said. “Set a good pace for us, all right?”

Arvand Sabetian, owner of 1018 Garden St., a year ago received a building permit to convert the previous office space into a 13-unit hotel. Now, his plan is to subdivide the project to allow people to buy individual units and then rent them out like hotels for less than 30-day stays.

“The main advantage that I see for the owners is that they can participate in an investment vehicle that is not as large as a 13-unit hotel,” Sabetian said.

He answered dozens of questions from the commissioners, who questioned the reasons why he wanted to allow individual ownership of the units, and why he wouldn’t just have investors own a 13-unit building.

Sabetian said it creates more flexibility for an investor to own a single hotel room, or more than one, than have the commitment of owning the whole building. Those individual owners also could stay in their units for up to 30 days, but the intent would be that they are not second homes or timeshares.

Assistant City Attorney Tave Ostrenger and senior planner Allison DeBusk stressed several times during the meeting that owners could not stay for more than 30 days consecutively in the units. The owners would have to pay hotel occupancy taxes to the city.

“By definition, a hotel cannot be occupied for more than 30 days, whether it’s by the owner or anybody,” DeBusk said. “Then it becomes a residential unit.”

Sabetian said he plans to hold on to at least one of the hotel units and plans to stay on as a member of the management team.

The commission expressed concerns about the building turning into second homes or timeshares, so in approving the project they asked for an annual report with information such as how many of the units have been sold, the total transient occupancy taxes collected, how many nights were occupied by the owners, and changes to the management team.

Bonderson was concerned that the atypical situation could get out of hand.

“I know you have good intentions, but I can see how this can go a million different ways,” Bonderson said. “The units can be converted, they can be lived in as residential units, we may never know and there’s so much potential for the property to be used incorrectly.”

The commission before its final vote took a straw poll, and only Bonderson and commissioner Lesley Wiscomb were intending to vote no. When it was clear that the two were on the losing side of the vote, they agreed to support it as long as there was the annual report with updates on the project.

Ostrenger said the city will audit the hotel bed tax collected and make sure that the program is not being abused.

“One of the ways we are going to be making sure that owners are not staying in their units for more than 30 days is when we audit for out TOTs we’ll be looking at those records,” Ostrenger said, “so if we discover that someone is living in their unit, we can then enforce it through our zoning enforcement team.”