What’s Happening With the Pepper Tree Inn?

Do you know what’s going on with the eastern half of the Pepper Tree Inn on upper State Street? I see people going into the hotel driveway, while the right side looks like they maybe started a renovation, but have since stopped. —A.

What looks like one property from the street is actually two lots: 3850 State Street (at left below), site of the remaining half of the Best Western Plus Pepper Tree Inn, and 3840 State Street (at right), which was sold for $17.55 million last October. 3840 State Street is fenced off and appears to be intermittently under construction.

I stopped by the hotel to ask what was up, and the staffer said that the property is undergoing a $20 million renovation—first one half then the other—that would make it “super nice.” He also said it would remain a Best Western. However….

I dug around the city’s Property Records Database and it turns out that a pre-application review was filed in April 2020, and it tells a different story. “This proposed project is the result of a 60-year land lease expiring. The Pepper Tree Inn Hotel currently spans two properties with separate landowners. The Lessee [i.e., the hotel owner], under the terms of the lease expiration, is required to create a motel on 3840 State separate from the motel on 3850 State Street […] and return both properties 3840 and 3850 State Street, separately, to the possession of each parcel’s owner.”

Normally, it would be in all parties’ interest to work out a deal to maintain the status quo—and indeed, it’s possible such a thing has happened since the letter was filed. But reaching an agreement may have been complicated by the fact that soon after 3840 State was purchased, by an LLC related to L.A.-based Woodbridge Capital Partners, the lease was assigned to First Republic Bank.

Neither Woodbridge Capital Partners nor the owner of 3850 State Street, L.A.-based Hawkins Way Capital via an LLC, would comment. 3850 State includes the former Treehouse Restaurant space (a.k.a. 3860 State Street) on the lot, which is for lease with the following condition: “Future tenant must serve breakfast and lunch but will have the benefit of being the sole restaurant for the Pepper Tree Inn.”

Got a question you’d like investigated? Email [email protected] or text 917-209-6473.

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Previous Burning Questions:
••• What is this large memorial in Ennisbrook?
••• What’s the large building under construction next to Highway 101?
↓↓↓ Who bought the former St. Mary’s seminary—and why?
••• What will happen to the SBPD building when the new building is completed?
••• How does the city decide to mark bike lanes?
••• What’s the story with this house on W. Cota Street?
••• What are those little houses on Santa Barbara Street?
••• Which Highway 101 exits are getting renamed?
••• Will Delta Air Lines ever reinstate service to Santa Barbara Airport?
••• Is the Music Academy of the West adding pedestrian gates?
••• Is the county really taking private property for trailhead parking?
••• Why does the Coast Village Road median look so bad?
••• What’s the point of this light pole near the freeway?
••• Why are the city’s parking lots scanning license plates?
••• What’s inside Paseo Nuevo’s State Street tower?
••• What’s the point of these markings on Laguna Street?
••• Why is there a giant red shoe off Highway 101?
••• Are we no longer allowed on the SBHS baseball field?
••• What does “SBTP” on this post mean?
••• What’s up with the “no e-bike” signs on local trails?
••• Why is Franceschi House in a holding pattern?
••• Why is there a train station inside this State Street storefront?
••• What’s happening with this derelict house in Summerland?
••• Why is there wood on some power lines?
••• Can you explain how sundowner winds work?
••• Why is there a pressure cooker attached to this utility pole?
••• What’s this concrete ramp thing on East Beach?
••• Why does “USA” get written on the street?
••• What are those poles in the ocean near the Ritz-Carlton Bacara?
••• Are people really allowed to set fires in the middle of Montecito?
••• What’s the story with the half-finished lot next to the Montecito Country Mart?

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