Commission suggests major change for downtown business permits

Following two years of discussion and study, the Laguna Beach Planning Commission voted Wednesday to recommend the City Council repeal the controversial conditional use permit that business owners are required to obtain before moving into downtown buildings.

If the Laguna Beach City Council agrees, entrepreneurs could instead acquire a basic business license at city hall. Commissioners vowed to revisit the concept in a year or so if the results aren’t desirable.

The Commission’s 4-0 vote, Commissioner Steve Goldman was absent, earned applause from audience members, including many downtown business owners, commercial landowners, and local real estate agents. In a rare display of unity, particularly over the Downtown Laguna’s future, speakers at Wednesday’s meeting echoed support for recommendations of the retail market study conducted by economists Stanley Hoffman and Greg Stoffel

In January 2019, the City Council agreed to pay Hoffman $38,800 to complete the retail market evaluation. In the middle of this assignment, Hoffman died and Stoffel Associates was brought in to complete the study, Stoffel said.

“We’ve been waiting for this report for a long time,” Planning Commission Chair Ken Sadler said. “We thought it would provide a lot of good information and I believe that it does.”

Stoffel summarized the results of the 73-page market evaluation study, which included an in-depth profile of both resident and visitors’ spending patterns and a stakeholder survey.

Among business operators who responded to the survey, 65% gave a negative response when asked how has the business climate in Laguna Beach changed in the past few years.

“I think this is significant,” Stoffel said. “You could almost view it in your terms as a wake-up call to downtown because the very people who are interfacing with the customers that we require gave a negative response to that.”

More than one‐third of merchants who responded to the survey said that Fashion Island and other nearby areas of Newport Beach have the most competitive centers for their business, Stoffel said. Irvine Spectrum and The Shops at Mission Viejo were also identified by the study as other strong competitors for Laguna Beach retailers.

“All of these centers capture significant traffic from Laguna Beach residents,” Stoffel said.

To define a realistic trade area for Downtown Laguna Beach, the retails consultants used the services of mobile phone analytics firm UberMedia.com. This firm collects mobile location data from a variety of sources and aggregates them into location-based data.

The data was used to map the nighttime locations of visitors who entered a downtown “geofence area,” in other words their residences. Downtown attracts a substantial percentage of customers from the inland cities of Aliso Viejo, Laguna Niguel, Irvine, Mission Viejo, according to the study.

Tyler Russell McCusker, a Laguna Beach resident and general manager for the KX FM radio station, told the Planning Commission that he also owns a Lake Forest-based escape room, a puzzle concept designed for birthday parties and corporate team-building. He’d love to open a location in Laguna Beach and offer recreational activities for residents and visitors.

“But the planning counter has no idea what I’m talking about and tells me to go away every time I’ve approached that process,” he said. “It’s an example of a kind of creative business that we don’t know anything about that we don’t have a CUP for because we’ve never heard of it.”

Laguna Beach resident Becky Jones said she helped write the city’s conditional use permit language while on the Planning Commission and was disappointed with how it’s been used by certain businesses to prevent new competitors from opening.

“I do think that the CUP process has become way more restrictive and way more inflexible than we ever anticipated it being,” she said.

One of the more stubborn problems the Planning Commission is trying to address is how to attract higher-end shoppers that spend more per visit and can support retailers year-round.

“What we’re trying to do here is have a quantum shift toward higher-end retail,” Whitin said. “What high-quality retailer would be attracted to our town given the fact we have so many day-trippers?”

The key might be to attract retailers with specialized inventory, such as mountain bikes and ocean sports equipment, and handmade items produce by female artists.

Commissioner Jorg Dubin said it’s time for city hall to allow change, innovation, and flexibility.

“If we continue not to change things, the town is going to continue to stagnate,” he said.