I have some good news to share.
The City Council is often bombarded with concerns from people about the number of vacant storefronts and a demand that “The city needs to do something about it.”
Three weeks ago, a parade of speakers explained to our City Council how Laguna, with 6 million annual visitors and over $700 million of annual retail and hotel room sales, is blighted, comatose, and on the road to ruin unless the City Council takes extreme measures to reinvigorate the economy through massive injections of alcohol into visitors.
So, I checked some facts.
The Chamber of Commerce website lists commercial vacancies and currently shows there are 36 retail, office, and industrial properties available.
I checked with commercial property brokers for a Laguna Beach commercial vacancy factor, but being a small market, the providers of commercial data do not break out numbers for Laguna.
So, I checked to see how many businesses there are in Laguna and found nearly 3,900 business licenses in Laguna. Thirty-six vacancies for 3,900 businesses didn’t sound so bad.
But since not all businesses occupy a commercial address, I checked the post office for business addresses and found there are 1,447 business addresses in Laguna (not counting Post Office boxes.) Thirty-six vacancies out of 1,447 physical addresses is about 2.5% commercial vacancy. That’s probably a good estimate of commercial vacancies.
Looking further, I found that while the national average for retail vacancy is 6.6%, Orange County does much better with only 3.6%. But at 2.5%, Laguna is far healthier than either Orange County or the nation as a whole.
I also found that nationally about 8% of all businesses either start up new or fail in any year.
And, only 50% of new businesses survive five years.
So, businesses turn over. For many reasons. Sometimes success. Sometimes failure. Sometimes due to growth. Or sale of the business. And turnover can cause vacancy, but turnover is normal. And that’s the point. And, in fact, Laguna is doing much better than most.
There is no question that this is a trying time for brick and mortar retail. And, while no one wants to see businesses falter, on the other hand, our City Council has no obligation to guarantee the profits of private businesses.
And if a developer pays too much, or promises his investors too much, the City has no duty to bail him out.
John Thomas, Laguna Beach