Arizona resident Barbara Barrett, who shopped at the Oceane Skin Care shop on Forest Avenue during a visit in August, was not surprised that the Laguna Beach City Council took the unusual step of revoking the store’s operating permit Tuesday.
“They were high-pressure salespeople and as a result of their products I experienced a medical issue, which I am still suffering the effects of,” said Barrett, one of many customers and passersby who voiced complaints about the shop’s sales strategy in letters to the editor, online and at City Hall.
Oceane opened after receiving a conditional use permit in February. Not long afterwards, city staff began receiving complaints from residents who were solicited outside of the shop on 266 Forest Ave. in clear violation of the city’s Downtown Specific Plan. The plan prohibits any business being conducted outside the building. In addition, a code enforcement officer uncovered 14 additional violations, including repeat offenses by shop staff that promised to alter their sales tactics, according to Anthony Viera, an assistant city planner.
Because citations and notices of statute violations were not effective in deterring the outdoor sales practices, the Planning Commission voted in October to revoke the owner’s conditional use permit.
On Tuesday, the council received fresh evidence that Oceane employees continue to violate the conditional use permit. A video shot by a local resident, who was present at the meeting, demonstrated that just a week prior, outdoor solicitation was occurring outside the Oceane storefront.
The council held a de novo review, which allows councilmembers to make a fresh appraisal of the situation and rule without deference to the Planning Commission decision.
Mayor Steve Dicterow asked councilmembers to consider a basic question, “has the conditional use permit or ordinance been violated,” he said.
Attorney Noah Balch contested the revocation proceeding on behalf of shop owners, Sanja Simidzija, of Laguna Beach, and Liam Ben David and Shay Ben Hamo, both of Los Angeles. City planning records list the property owner as Waheguru Investments LLC, which acquired the Forest Avenue property for $1.5 million on Dec. 27, 2012. Waheguru is controlled by Harjit Bagga, who listed an address on Mountain View Drive in Laguna Beach, California Secretary of State records show.
In her permit application, Simidzija said she intended to bring to downtown “an organic high-end skin-care and make up store.” She said the store would carry multiple high-end lines, including Oceane, consisting of ingredients from the ocean. The Oceane Company, based in Atlanta, “caters to those who are seeking to rejuvenate their youthful appearance and to defy the aging process,” according to the company’s website.
Balch contested what he described as improper targeting of Oceane for violations, noting that the First Amendment protected commercial speech in the form of sales solicitation.
In defense of Oceane’s practices, Balch cited other businesses conducting operations outside of their buildings, including Adonis Restaurant, Brussel’s Bistro and Tight Assets, also code violations documented in the city’s staff report. These instances, according to Balch, proved that Oceane had been improperly singled out for code enforcement violations.
Simidzija, who had previously owned an art gallery at the Forest location, also defended the shop’s business practices. “How can you make it in business in Laguna unless you try to do something different and approach customers?” asked Simidzjia, who says she ran three other businesses in Laguna in recent years. She said her business experience made her “familiar with what Laguna residents like and want.”
Her business partner, David noted that “the city does like and even encourages businesses offering different kinds of interaction with customers.” He noted that he and his partners “were committed to the business” and that he had invested his life savings of $250,000 to make the operation a success.
Others who favored revoking the store’s conditional use permit echoed the comments of Barrett, who spent $1,000 on products that produced a serious allergic reaction. She was rebuffed when she sought a refund, and described Oceane’s tactics as “unfriendly customer service practices.”
Michael McFadden, owner of the nearby Rock Martin Custom Jewelry shop, said “this is not how we do business in Laguna Beach; these kind of practices we cannot allow.”
He added, “I hear complaints from customers every day about these practices; descriptions of people walking around our store to avoid getting accosted.”
Local Ann Wareham said her routine walk on Forest Avenue now detours around Oceane. “I am not easily intimidated, but I avoid that part of Forest,” she said. “It is not a pleasant experience. I don’t expect this in Laguna Beach.”
“As a local person in town, I would not step foot in this place,” Tara P wrote on the social media site Yelp. “They obviously don’t know this town’s vibe. I hate how they lurch out at you as you pass by like used car salesmen. I like to support local business, but this place is sketchy.”
The council’s deliberations included discussion of municipal rules governing conditional use permits, public nuisances and First Amendment protections of retail speech.
Councilmember Bob Whalen asked the City Attorney Phil Kohn if the city’s regulatory scheme could be balanced in this case with First Amendment considerations. “That is the main issue here, whether we can enforce or if that is a First Amendment violation,” he said.
Kohn felt confident that the restrictions in the Downtown Specific Plan and the conditional use permit did not violate free speech provisions. “As I sit here tonight, there are different and distinguishable types of speech that are protected,” he said.
Before the unanimous vote to deny the owner’s appeal and shutter the operation, Mayor Dicterow reiterated the question of “whether the ordinance or the conditional use permit had been violated.” The answer: a resounding yes from the five members.
Whalen noted that it was “extremely rare for a revocation to occur, but noted that the activity was uncharacteristic of downtown merchants.”
Councilmember Kelly Boyd said that “the video shown earlier is saying to us that the business is not planning to change. It is disruptive to the business close by. I am in favor of revocation.”
For Mayor Pro Tem Iseman, walking by the store “felt like an invasion of my activity,” she said. “People are avoiding that part of Forest. We have no choice but to revoke.”
Oceane’s owners will have 90 days to wind down, though the business can be cited for additional violations by code enforcement if new complaints are received from the public.
Attorney Balch could not be reached by phone or email about the possibility of an appeal.