Local Investor Doubles Down

As a youngster growing up in Laguna Beach, Chris Dornin considered himself steeped in artists. The high school’s teams then were still named Artists, rather than the current Breakers. He studied art with retired art teacher Peter Tiner, entering projects in local art competitions.

Many of Dornin’s childhood friends have now become working artists. Some, though, can’t afford to dedicate themselves to being full-time artists, and others are barely getting by or moving out to more affordable Costa Mesa or Irvine.

“This town had done nothing to cater to and keep those artists here,” said Dornin, describing what sparked his interest in partnering with local sculptor Louis Longi in developing the now much-debated artists’ work/live project on Laguna Canyon Road.

Longi’s project, which Dornin says “caters to our heritage,” is one of only two local projects his Laguna Beach-based Dornin Investment Group has invested in. The other may, too, prove controversial, but already has a colorful backstory. In December, Dornin acquired the historic Coast Inn, best known for its iconic and defunct Boom Boom Room gay bar.

Dornin and his wife, Marcella Kaytie-Dornin, DIG’s chief operating officer, dreamed of owning a hotel, restaurant and bar in Laguna that caters to the local community. “The Coast Inn is the perfect combination of our talents,” said Dornin, since his wife grew up in a family that established a successful restaurant and tavern business in Las Vegas that she now runs with her mother and sister.

Kaytie-Dornin is working on the design with architect Horst Noppenberger, who also designed Longi’s project.

Born in 1977, Dornin attended local schools and graduated from UC Berkeley. He played water polo through high school and college and remains a die-hard surfer.

Dornin met his wife during one of her many visits to Laguna, and they married in 2005. The couple now lives on Pearl Street with their three dogs and they walk to their office on Glenneyre and Oak Street. On a recent visit there, one of the pugs answered the door ahead of his owners, who had just returned from a Sun Valley, Idaho, ski and snowboard trip.

Before establishing his own real estate investment group, Dornin worked at Buchanan Street Partners, a real estate investment bank, and Chase Merritt, a private real estate investor, both in Newport Beach. At Chase, he worked as chief investment officer and chief operating officer.

By coincidence, his father Bob Dornin, a longtime local realtor, once worked in the same building that now houses his son’s office.

“We are not developers,” insisted Dornin, who said his company typically acquires existing apartment and office buildings of up to $50 million in Texas, California, Arizona and Nevada. The company generally partners with other investors to acquire the property, which DIG manages and renovates for eventual sale. In the past two years, the company has acquired and/or sold $200 million of commercial real estate, he said.

“This will be our first true development,” said Dornin, of Longi’s project, in which his company will be a half owner, with no other investors. He did so, he said, “because I was born and raised in Laguna Beach and thought this was a great opportunity to provide something that was really needed and make an impact in a community I love.”

Having encountered many hurdles while winning approval for an addition to his personal residence, he found the prospect of embarking on a full-blown development project “terrifying.” His instincts proved prescient, especially since enduring recent vehement personal attacks from opponents.

As equal partners, Dornin and Longi anticipate obtaining a construction loan for 65 percent of the total costs, with their own equity covering the remaining 35 percent. They estimate total costs at $6.5 million and 36 months from the start of construction before they see cash flow.

Dornin guesses that the project may become profitable in five years, but insists that money is not what motivates him. He sees it as “making a difference in the place I have lived my whole life.”

“It’s a loser,” said local resident and developer Sam Goldstein, assessing the project on its investment merits. He said he sees its value to the community in providing much-needed space for artists to live and work, but that “it would not be my first and foremost investment,” he said.

Laguna resident Mike Meyer agreed. A real estate investor with Newport-based Twin Rock Partners, which invests in projects similar to DIG, he said their typical investments yield a minimum of 6 percent returns from day one. With a project like the artists’ work/live, the partners aren’t likely to see a profit for many years, and then they’ll be playing catch up, Meyer said.

What’s more, the project is rife with risk, such as unanticipated construction costs and inspection delays among many others, Meyer said.

“It’s likely that he’s doing it because he’s part of the community,” said Meyer, since otherwise it seems imprudent.

Dornin hopes his renovation plans for the neglected Coast Inn will be better received. The company plans to maintain the 24 guest rooms and a bar and restaurant, and will seek approval for a rooftop bar deck and a pool.

He aims to retain the historical significance, character and layout of the building and to highlight its legacy as one of the first gay bars.

Combining their two local projects, the Dornins intend to hold a party at the Coast Inn at 6 p.m. on March 14, to celebrate their plans for the property and describe their partnership with Longi on the artists’ work/live project.