The sun is setting and you’ve got a front-row seat on the 1,800-square-foot terrace—plus a pool, two fireplaces, a quietly trickling fountain, and panoramic views of the Santa Ynez Mountains and Santa Cruz Island, 26 miles offshore. Seven floors below are the stylish galleries, shops, and restaurants of Old Town Santa Barbara. The former Andalucia (so called under previous ownership) has 97 rooms that have been dressed up under the aegis of L.A. design virtuoso Michael Smith, who brings an Alhambra-meets-Pacific look. The palette—an interplay of yellows, greens, and blues, ranging from celery to indigo—takes its cue from the ocean (which sits three blocks to the west); dark oak floors are accented with rush mats or sorbet-hued dhurries (rather than wall-to-wall carpets); and hallways are covered in a cheeky (but oh-so-chic) bright-turquoise burlap, set off by Moroccan lanterns. Even the lobby, with its terracotta floor and tapestries, positively radiates California warmth.