Opened House

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Opened House
Donna and John Heidt in front of their bed-and-breakfast in Santa Monica.

Santa Monica, a popular tourism destination that saw more than 7.3 million visitors comb its beaches and oceanfront shops last year, will soon mark an odd milestone:

It is about to welcome its first – and only – bed-and-breakfast.

Developer John Heidt and his wife, Donna, are nearing completion of a $2.8 million purchase and renovation of a 2,000-square-foot beachfront house, the end of a five-year journey that will produce the city’s only permitted bed-and-breakfast.

In the process, the Heidts faced just about every hurdle a real estate development could face – from a last-minute historic preservation designation to structural integrity issues to warnings for nonpermitted uses. Despite the time, expense and uncertainty over whether guests would be willing to spend as much as $5,000 a night to stay in the four-bedroom home, they remain upbeat.

“It’s a one-of-a-kind property. I love the whole vibe of the area, with the pier and the beauty of the ocean and the sailboats and the beach. I could go on and on,” said John Heidt. “But from a business perspective, it was sort of a disaster. It cost me a ton of money and basically double the time. Would I do it again? I’m not so sure. But now that it’s done, I can say I’m glad I went through with it.”

The small clapboard house at 2219 Ocean Ave., built around the turn of the last century and designated a historic landmark in 2006, sits only a couple of hundred feet from the water’s edge. Its distinction as the city’s only bed-and-breakfast comes as a result of the peculiarities of the Santa Monica municipal code.

Many places visitors might consider a bed-and-breakfast in Santa Monica – the quaint Channel Road Inn, for example, or a home someone rents by the room online – aren’t technically considered such by the city.

The city code says a bed-and-breakfast must have no more than four guest rooms and one kitchen. By that definition, even the smallest hotels in Santa Monica are ruled out. On the other hand, while hundreds of homeowners in Santa Monica advertise short-term vacation rentals online on websites operated by HomeAway Inc. or Airbnb Inc., none of them is legally allowed to do so according to city code, which dictates that landlords and homeowners in residential areas may not rent rooms on their property for fewer than 30 days.

Only the Heidt cottage, with four bedrooms, one kitchen and a hard-won conditional use permit from the city, fits the narrow definition of a bed-and-breakfast in Santa Monica.

But going the legal route, unlike so many hundreds of others in Santa Monica, cost the Heidts a lot of time and money – not to mention an obligation to pay transient occupancy taxes.

John Heidt, president of Heidt Torres Co., a commercial real estate brokerage, management, development and investment firm, said the couple spent five years and more than $1.3 million tangling with various city and community groups to gain approvals for the conversion and restoration of the property. But even after all that effort, marketing the home could prove challenging.

“Calling it a B&B is causing confusion with the public,” he said. “The city wants me to rent it as a house, not room by room like you would with a traditional B&B. So we’re trying to orient it toward families and people who might otherwise stay at Shutters or Casa del Mar, but don’t because they need privacy.”

Pam Hester, a travel consultant at the Woodland Hills office of Frosch Classic Cruise and Travel, began working with the Heidts recently to advise them on issues such as marketing and pricing. She said that she believes the house could rent for as much as $5,000 a night during peak travel months and $2,800 in the off-season.

“If we were in a small coastal town further north, I’d say that pricing is off the charts – it’s crazy – but this is a prime area,” she said. “Plus, I think they’ll have a year of trial and error to see how it goes. We may find that people who have that kind of money don’t mind staying at a high-rise hotel to get all the extra services, but that’s something we won’t know until the cottage gets out in the market.”

‘Save the cottage’

The Heidts first saw the cottage, nestled between bulky apartment buildings on Ocean Avenue, in 2005. At the time, the cottage was listed for sale for $3.3 million, but with a shoddy foundation, electrical problems and a bad case of termites, it also had a posted notice of demolition.

Donna Heidt said that despite its decaying appearance, she fell in love with the property right away.

“It was all about instinct for me,” she said. “I just had to have it.”

John made an offer to the seller, a foundation associated with the University of Illinois, but was turned down when the foundation thought it might find a better offer from a developer willing to pay more to build apartments on the site.

In the meantime, the community took notice of the seller’s intent to tear down the cottage and a grassroots campaign was initiated to “save the cottage” by naming it a historic landmark. Despite three separate appeals, the property became Santa Monica Designated Historic Landmark 74 in August 2006.

Shortly thereafter, the Heidts came back to the foundation with a second offer, for $1.5 million, and after nearly two years in escrow, they took ownership of the property in May 2008.

The Heidts, who live in Westwood, didn’t always intend on renting the cottage as a bed-and-breakfast. Initially, the house was simply meant to serve as a home away from home where they could get the family together and enjoy the beach.

But after putting about $90,000 into fixes that included tearing up 2-inch blue shag carpets, scrubbing and painting the walls, repairing plumbing and electrical systems and tenting the building to kill the termites, the family began renting the house for a few weeks at a time to family and friends.

John Heidt said he didn’t realize that renting his home was illegal until, one day, a city worker approached him in the driveway and issued a citation.

“I guess the city doesn’t act on this law unless there’s been a complaint, and it turned out one of my neighbors had complained,” he said. “Right away I began looking for ways to make things right. I thought there had to be some way we could share this historic landmark with people.”

Dozens of meetings with city planning officials and community groups followed, and a project that Heidt initially estimated would cost him about $735,000 quickly ballooned to almost twice that.

It was so expensive partly because he had to raise the house and pour a new foundation and replace the electrical and plumbing systems. A bathroom was added and a second kitchen deleted, its space incorporated into a bedroom. As the renovations were nearing completion, the city told him he had to make the home compliant with the Americans With Disabilities Act, which meant that doorways had to be widened and a wheelchair lift had to be added to the back. Furthermore, to please community members who were anxious about a bed-and-breakfast with no one on site to maintain order, he converted a garage behind the house into a studio apartment to serve as a manager’s unit.

Still, for all the headaches the project caused him and his family, Heidt said he was happy to have done his part to preserve a small piece of architectural history in Santa Monica, and he’s eager to show off the property to the public soon.

“We really slammed in terms of time and money, but in any event, we did finally get through it,” he said. “We have our final sign-off on our permits, we had our open house and now we’re in the process of fine-tuning finishing touches.”

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