City to Probe Cost of Developer’s Six Projects

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Council forms committee to review public costs of impending development

By Daniel Langhorne, Special to the Independent

A rendering of Mo Honarkar’s proposed 112-room boutique Cleo Hotel. The hotel is one of six projects Honarkar has proposed to build in town. Image courtesy of Laguna Creative Ventures.

Mayor Bob Whalen and City Councilwoman Sue Kempf will sit on a sub-committee created Tuesday that will advise city staffers and consultants on how the city will extract fees from six proposed building projects, including the rehabilitation of the Hotel Laguna.

City Manager John Pietig said Laguna Beach hasn’t seen this much development activity since the Montage resort opened in 2003. Pietig said Laguna Beach Company, led by Laguna Beach resident and developer Mo Honarkar, should reimburse the city for costs it will incur to review its applications, improve public infrastructure, and negotiate a development agreement.

Honarkar announced his acquisition of the Hotel Laguna in January. The rehabilitation of the hotel is one of his six proposed projects in Laguna. Photo by Mitch Ridder.

“I know it’s important to the community, the City Council and the staff, and we want to make sure we do it right,” Pietig said. “These are important projects that could define our community for many years going forward.”

In light of the unusual pace of development in Laguna Beach, Pietig has recruited a team of consultants to support the Community Development Department that’s already stretched thin on pending projects and studies. These consultants will include Elisa Stipkovich, former executive director of community development for Anaheim; attorney Bill Ihrke of Rutan & Tucker; and real estate advisory firm Keyser Marston Associates.

Honarkar said he’s very supportive of the City Council’s decision to have Whalen and Kempf advise city staffers on how to recover costs associated with his projects.

“I’m in it to create projects that everyone in this town will enjoy,” he said. “I don’t want my neighbors to pay for something I’m developing.”

In November, the Planning Commission reviewed Honarkar’s proposal for a 112-room Cleo Hotel at 690 South Coast Highway, arguing that the project’s scope should be reduced to the 80 rooms currently allowed on the site.

The other projects Honarkar’s Laguna Beach Co. plans to pursue in the near future include:

  • Rehabilitation of Hotel Laguna
  • Redevelopment of the central bluffs south of Hotel Laguna
  • Redevelopment of the Hive and Art-a-Fair
  • Heisler Landing, a hotel, restaurant, and spa project planned for North Coast Highway from the Royal Hawaiian to Jasmine Street
  • A low-density residential project at Canyon Acres Drive and Laguna Canyon Road

Some residents’ fears about the pace of development in Laguna Beach was a major topic of debate during the 2018 City Council election. The Liberate Laguna PAC was created to support and help elect Kempf and City Councilman Peter Blake, who expressed more openness to working with developers during the campaign. The PAC subsequently raised more than $152,000. One of Honarkar’s companies, 4G Wireless, contributed at least $20,000 to the war chest.

Penelope Milne, president of the Canyon Alliance of Neighborhoods Defense Organization, said the expense and complexity of redeveloping property in Laguna Beach incentivize major developments over smaller ones. She added that City Council members should allow members of the public to have a voice on the sub-committee that will negotiate the impact fees from Honarkar’s developments.

“It seems odd, undemocratic and worrisome that we’re considering a special development process for essentially one individual,” Milne said.

Kempf said her professional experience tells her negotiations often turn ugly, and it’s best that these discussions not be open to the public. She added that there will be plenty of opportunity for residents to give their input on projects during the preparation of environmental impact reports and hearings before the Planning Commission, City Council, and Coastal Commission.

“All of us aren’t sitting up here just to approve a bad project, I want to be clear,” she said.

Councilwoman Toni Iseman said it will be important to examine the neighborhood-specific impacts from each of Honarkar’s proposed projects. She also proposed spinning off the low-density housing proposal for Canyon Acres, because it’s much smaller than the others.

“People are going to look at how one project comes in and then have confidence in future projects,” she said. “I don’t want to see us approving all of these without seeing success on some.”

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1 COMMENT

  1. How will guests arrive and depart this hotel bounded by a busy interstate highway on the west, a major shopping market to the south? Does Laguna want another car traffic jam at Cleo and PCH? See the LCV rendering for Cleo Street: 112 rooms and a three story parking structure for 223 inhumed cars covered by a hotel facade. The mobility system for any new Laguna development will determine the impact to our village and surrounding neighborhoods. The mobility system should be consulted first not a last after-thought. Laguna Creative Ventures (LCV) can do much better than this. See all six+ LCV projects here: https://www.lagunacreativeventures.com/projects

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