The California Coastal Commission unanimously voted Oct. 13 to find substantial issue with the major remodel and addition of guest rooms at Pacific Edge Hotel.
In August, the Laguna Beach City Council voted to approve the remodel of Pacific Edge Hotel, including the addition of 25 guest rooms, new conference areas, outdoor dining, and a new cafe.
UNITE HERE Local 11, a union representing Southern California hospitality workers, appealed this decision to the state panel, arguing the project would unfairly price out low-income families from staying overnight in Laguna Beach and that a $625,000 in-lieu fee to rehabilitate the Crystal Cove Conservancy’s cottage was an infeasible alternative.
“I think it’s a reach to call Crystal Cove… affordable if you break it down by people in rooms,” Commissioner Caryl Hart said. “I think you need to look at the overall cost of those cottages. And I would agree it’s almost impossible to reserve them.”
The cottages range from $39 a night for a dorm room or shared cottage that sleeps two people to $277 a night for cottages sleeping up to nine people.
Commission Vice-Chair Donne Brownsey echoed the concerns about converting Pacific Edge into another upscale coastal hotel.
“I’m concerned about the [environmental justice] issues related to gentrification of coastal lodging in certain communities and I think this is an extremely important issue,” Brownsey said.
Steven Kaufmann, an attorney for applicant HCI Laguna Owner LP, defended the in-lieu fee as an appropriate safeguard for coastal access.
“It doesn’t make economic sense to make improvements and create new low-cost rooms on site and in-lieu fees are appropriate and permitted by the [Local Coastal Program],” Kauffman said. “The critical factor here is the in-lieu fees will provide and ensure actual low-cost lodging.”
He added that the hotel’s conditions of approval by Laguna Beach prohibit the hotel from operating off-site valet and employee parking.
Highgate Hotels didn’t immediately respond to a request for comment on Monday.
In a Sept. 16 letter to Coastal Commission Executive Director Jack Ainsworth, Mayor Bob Whalen asked the state panel to reaffirm the City Council’s decision.
“It will be a significant improvement to the facility, which will benefit the community and visitors alike and will enhance coastal access,” Whalen wrote. “As you are aware, City staff has been collaborating with your staff on resolving several longstanding issues, and we feel significant progress is being made to address these issues in our review of projects.”
Besides the coastal access, the hotel operator is contending with complaints from Sleepy Hollow Lane residents saying the valet service and delivery trucks servicing the hotel have impeded traffic flow and residential parking.
“Even without the increased number of rooms, the hotel has used off-site parking lots to accommodate valet service at the hotel. How is this not going to be worse when the hotel increases its guest rooms and restaurant seats?” Sleepy Hollow resident Jessica Yadegar wrote in an email. “The Coastal Commission should not allow this expansion.”
Community Development Director Marc Wiener said city officials were satisfied that the Coastal Commissioners’ concerns appeared limited to the in-lieu fee proposed for the Crystal Cove cottage rehabilitation.
“Upon conferring with Coastal Commission staff about the decision, we are confident that the issues will be resolved in a timely manner so that the project may move forward,” Wiener said in a prepared statement.
A date for a future hearing of the Pacific Edge project wasn’t immediately available.