Appeal to Stop Hilton Hotel Expansion Denied by Santa Barbara City Council

Santa Barbara City Council unanimously denied an appeal to stop a proposed 73-room Hilton Beachfront Hotel expansion, allowing the project to continue despite concerns raised about whether the hotel developers fulfilled their promise to provide a 100-bed hostel as negotiated in a development agreement with the city years ago.

The appeal — filed by attorney Jordan R. Sisson on behalf of UNITE HERE Local 11, a union representing hotel workers — challenged the legality of the expansion project, based on allegations that the property owners broke the terms of the original development agreement. The agreement allowed the Fess Parker family to transfer property rights from an adjacent property to allow for an expansion of nearly 43,000 feet at the Hilton Beachfront location, as long as the owners built a low-cost hostel to mitigate potential impacts.

In 2014, the hostel in question was completed, and sold by the Parker family to another company, which opened the property as the Wayfarer Hostel. As far as the city was concerned, the terms of the agreement were met at that point. But Sisson and the appellants argued that the Wayfarer, which has since been resold and now operates as the Moxy Hotel (with the lowest rates currently running $313 a night), does not adequately provide the low-cost accommodations as intended by original agreement.

Sisson pointed to a 2015 Coastal Conservancy survey that said the city had just 70 low-cost rooms — accounting for less than 3 percent of the city’s 2,700-plus rooms. In 2023, a survey of 55 hotels in Santa Barbara found that there were zero low-cost rooms available in the coastal zone.

The appeal also challenged the viability of the development agreement at the time of the property transfer, arguing that the agreement had expired in 2023, before the Parker family chose to make the transfer of property rights.

There was no denying that the Wayfarer Hostel, now the Moxy Hotel, had seen a large hike in prices. In the decade since opening, prices per night have jumped from $59-$100 for hostel beds at the Wayfarer in 2014 to more than $300 a night at the Moxy in September 2025 (there are no longer any hostel-style lodgings listed at the location).

Councilmembers agreed that the appeal raised a legitimate issue over the hostel not operating as originally intended, but city staff and Project Planner Kathy Kennedy were adamant that the obligation was legally met.

Kennedy confirmed the development agreement had not expired, and at least five extensions were granted since 2016, keeping the agreement valid through at least December 23, 2027. The section regarding transfer of development rights, specifically, she said, is valid through 2029. She noted the question was brought up during the Planning Commission review when the project gained unanimous approval in May 2025.

Kennedy explained that the obligation for a hostel was considered complete when the location was built in 2014. When the Parker family sold the property, they would have no ability to control what happened to hostel.

Cameron Goodman, an attorney representing the Parker family, said every one of the arguments raised by the appellants was unfounded. “The appellant is distracting you with irrelevant issues and a tortured interpretation of the development agreement,” he said.

Assistant City Attorney Tava Ostrenger confirmed the legal obligations were met when the hostel was constructed. The fact the hostel is not operating as intended was a separate “city enforcement matter,” which she said was being addressed with a formal investigation into the Moxy Hotel.

Councilmember Kristen Sneddon said the appeal highlighted an important issue the city should take into consideration when drafting agreements with the intention of a community benefit remaining viable into perpetuity. “It’s on us,” Sneddon said.

Councilmember Wendy Santamaria agreed because the city is now missing out on much-needed low-cost accommodations. “It may not have been an intentional bait-and-switch,” she said, “but that was the result, and it’s a result that we as a city have to grapple with.”