Downtown Permit Process Under Scrutiny

Sammy and Jenni Elmished opened the Forest Avenue clothing boutique Casual this year, but their experience obtaining approval for the shop was anything but routine. “We anticipated no problems; the use of the space was not changing,” said Ms. Elmished. Instead, the application “process delayed us three months and caused us real financial hardship.”

The Elmisheds story serves to frame why the city is considering revising the Downtown Specific Plan, a set of regulations first created in 1989 and designed to preserve the character of the city center. “The perception in the marketplace is that there is too much risk and uncertainty to open a business downtown,” said an MIG consultant. “The city needs to enhance economic activity not deter.”

Last week, Berkeley-based MIG provided their recommendations to a joint meeting of the City Council and Planning Commission, addressing mounting concerns that running a business in the downtown area has become too cumbersome and difficult.

The downtown area consists primarily of retailers and merchants that cater to visitors, with the average tallying $1.2 million in annual sales, and approximately 40 percent paying rents between $10,000 and $25,000 per year, according to data gathered by MIG.

Currently, there are 277 businesses in the zig-zag defined district bordered by Cliff Drive, Coast Highway and Laguna Canyon road and streets that connect to Forest Avenue. Of the 266 storefronts, 88 are either restaurants, art galleries or clothing stores according to the MIG report.

Potential business operators often express frustration with the conditional use permit process, which restricts commercial uses for each property beyond those generally specified by zoning. Currently, only two uses are exempt from a conditional use permit requirement, according to the Downtown Specific Plan. This contrasts with a commercial neighborhood zone outside the downtown that allows 29 permitted uses.

In the existing Downtown Specific Plan, which most recently was amended in 2007, the public hearing process to consider conditional use permits can be utilized in an anticompetitive manner, as was the case with the Elmisheds. “It became quite obvious that the opposition to our opening a new store by those camped out at City Hall was meant to delay us,” Ms. Elmished said.

The couple relied on the expectations of veteran architect Morris Skenderian, who foresaw no problems with their conditional use permit application. Instead, due to complaints filed by a rival clothing merchant, the endeavor turned into a red-tape nightmare.

To quell concerns, the Planning Commission and the council demanded that the Elmisheds specify the percentage of men’s and women’s clothing lines and styles to be sold in Casual, a methodology revised several times. In the end, the storekeepers were required to keep an approximately 50-50 stock, half for women and half for men. “Why is the city involved in this,” asked Ms. Elmished. “These are not business people; they don’t have experience in these decisions. The city is not responsible for paying the rent.”

To address the public perception that permitting has become discretionary rather than straightforward, MIG proposes codifying more specific permitted uses, as opposed to conditional uses that depend on Planning Commission and City Council approval. “Without getting too specific, I think some of the conditional use permit and parking requirements are too burdensome and not necessary,” Steve Dicterow, mayor pro tem, said during the study session Thursday, Dec. 3.

Residents were also divided on potential changes to the Downtown Specific Plan. “The overriding email we receive is to reduce the number of uses that require a conditional use permit,” said Larry Nokes, a Laguna Beach attorney, speaking on behalf of the Laguna Beach Chamber of Commerce. “The market and competition can be useful in determining the right mix of businesses.”

Local John Thomas suggested the importance of “understanding the economics before redoing the plan.”

The opposite perspective came from Barbara Metzger of Village Laguna, an organization dedicated to preserving Laguna’s historical character. Metzger said she “was alarmed to see that the conditional use permit process was being questioned as inappropriate and not being used properly. We have such a good downtown because we have had a process for 25 years.”

Others questioned the veracity and findings of the MIG survey, based on 95 responses. “We have a good mix, which lots of cities would love to have,” said resident Bonnie Hano. “I don’t know what we are striving for. I would hate to see my town changed because 95 people wanted something.”

“Ninety five responses out of 23,000 is not scientific,” said resident Pete Fielding.

The council asked the Planning Commission to review and hone the MIG recommendations, which would also streamline the permit process by merging designated commercial zones and identifying more approved uses.

Councilmember Toni Iseman urged MIG to keep permitted use and parking requirements separate. “Every decision we make must be long-term; what will the city look like? We need to have the mix of use that we currently have now, including restaurants and shops.”

Meetings in coming months will review parking, urban design and land uses.