The Hilton Santa Barbara Beachfront Resort plans to expand and add 73 guest rooms for a total of 433 rooms at the hotel, 633 E. Cabrillo Blvd.

The Santa Barbara Planning Commission approved the project at Thursday's meeting.

The hotel plans to demolish the tennis courts and tennis shop, reconfigure six guest rooms and add 50,195 square feet to an existing building. The number of parking spaces would shrink from 931 spaces to 880 spaces, but bicycle parking spaces would increase from 58

to 100.

Most of the conversation centered around the idea of housing and whether housing should be built at the site or elsewhere in the city, rather than hotels.

"We think this is a really great project, understanding the current rules and regulations," said Commission Chair Devon Wardlow.

Wardlow, an affordable housing advocate, explained during the meeting that she and the commission are always looking at new hotels and hotel rooms with a close eye, in the context of the city's affordable housing shortage.

"As you can hear from this commission, there are a number of underlying issues the commission has about how we are prioritizing affordable housing, so when we see things when there was an opportunity that this was going to contribute meaningfully to affordable housing and then that opportunity is going, we are trying to figure out a way in which we could recapture that," Wardlow said.

The hotel developers are not legally required to build housing at the site because of a development agreement approved in the 1980s.

The development would occur at the westerly portion of the project site, towards S. Calle Cesar Chavez.

The site is one of Santa Barbara's most iconic. The Hilton, formerly known as the Red Lyon Inn, is the site of weddings, conferences, events and a tourism destination for decades. It was built by the Fess Parker family in 1986. It was originally known as the Fess Parker Red Lyon Inn, then the Fess Parker DoubleTree, and then the Hilton in 2018.

As part of the approval, the developers donated 2.1 acres of grass facing Cabrillo Boulevard as public open space, even though it looks like space that belongs to the hotel.

Across Calle Cesar Chavez, the Parker family also owns the development rights to build a 150-room waterfront hotel. The hotel has not been built yet. The site is currently fenced off. The developers plan to transfer some of the development rights from that hotel to the Hilton project.

The Parker family also built a youth hostel at 12 E. Montecito St. in 2014, with the idea that it would provide affordable stays for travelers. At the meeting, however, city officials said they were unsure whether the hostel is actually providing affordable rates and planned to review it later.

Planning Commissioner Lesley Wiscomb noted she wished the city still had a redevelopment agency to help fund affordable housing and encouraged city staff to find ways to create a programmatic funding source for housing.

In 2011, the California State Assembly voted to abolish California's redevelopment agencies. The move killed about $5 billion in statewide funding for redevelopment and housing projects. The money was funneled back to the state to help solve its budget deficit.

Santa Barbara's portion of that funding was about $20 million -- and $4 million, by law, was set aside annually to fund housing projects.

"I will support the project," Wiscomb said. "I am upset about the elimination of the redevelopment agency and the consequences of that in terms of affordable housing in our city, but there's nothing we can do at this point about that."

The approval comes a few months after the planning commission approved a 250-room hotel at 101 Garden St. In that case, the developer did not have a legal right to build housing because of a pre-existing specific plan, although many community members wanted housing at the site.

Commissioner John Baucke agreed that the city needs to better address the impacts of hotels on housing in the community.

"This stuff is not new," Baucke said. "We continue to honestly fail as to addressing the impacts of hotels on housing in our community. But this applicant is not the cause of that problem."