Laguna Beach partially withdraws Hotel Laguna stop-work order

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A lone guest keeps a light on at Hotel Laguna in the last weeks of its operation back in December 2017. Photo by Mitch Ridder

Laguna Beach partially lifted a stop-work order at Hotel Laguna on Thursday, allowing a remodel of the restaurant, bar, and hotel lobby to resume, according to a city press release.

City building officials recently inspected and confirmed that the interior work underway at Hotel Laguna by lease-owner Mohammad Honarkar meets the required construction standards. However, work won’t be allowed in other areas of the hotel, including the Rose Garden and Terrace, until the developer submits a comprehensive plan for the overall restoration of Hotel Laguna and receives permits. 

“Hotel Laguna is a historic landmark and an important asset to this community, and we are supportive of the end-goal of restoring Hotel Laguna,” City Manager Shohreh Dupuis said in a prepared statement. “At the same time, we will continue to make it clear that all the procedures and requirements applicable to the project are to be followed.”

None of the areas where work will resume are part of the Coastal Development Permit appeal to the California Coastal Commission filed by Laguna Beach residents Mark and Sharon Fudge, city officials said. City officials notified the Coastal Commission staff that the remaining minor work is resuming.

Before Laguna Beach issues a temporary occupancy permit for the first-floor restaurant, lobby, bar, and kitchen areas, a structural engineer must confirm that the Hotel Laguna remains in structurally sound condition and is safe to occupy. Building inspectors will continue making regular daily visits to the project site to ensure that no unpermitted work is occurring, according to a press release.

“The decision by the City is vindication for me, my family and the entire team at the Laguna Beach Company,” Honarkar said in a prepared statement Thursday. “We are thrilled to get back to work and complete the first-floor restoration and renovation of the Hotel Laguna. The final touches are expected to take just a few weeks to complete. Then, we will open the doors and join together with the Laguna community to honor the hotel’s storied history while celebrating its future.”

In May, Laguna Beach ordered construction at Hotel Laguna to stop after city officials discovered that exterior work was underway without a permit. This was at least the third time city officials have formally warned Honarkar to stop unpermitted work at Hotel Laguna.

At that time, Mayor Bob Whalen said it was “very disappointing and frustrating” that unpermitted work continued at the Hotel despite previous stop-work orders on various elements of the property.

“We all have a common goal of getting that hotel open again but it has to happen within the rules,” Whalen said in May.

On June 29, the City Council held a closed session discussion to discuss possible legal action regarding Hotel Laguna, according to a letter from City Attorney Phil Kohn to the Fudges. At Tuesday’s city council meeting, Mark Fudge said he had information that city officials discussed a new conditional use permit for Hotel Laguna—these permits are typically necessary when developers want to add new amenities. Kohn has reportedly denied this but didn’t share any public comments regarding this matter on Tuesday.

“My goal is to determine who is telling the truth, what the truth is, and to get Hotel Laguna back in front of the public in a public hearing for a major land-use item and not to have it obscured behind closed doors,” Mark Fudge said.

A timetable for reopening hotel rooms to guests at the historic landmark remains uncertain.

Last month, an Orange County Superior Court judge cleared the way for Honarkar to escape a months-long receivership for an 18-property portfolio that does not include the lease with Hotel Laguna. Judge Charles Margines approved an order granting permission to Honarkar’s companies to refinance a $195 million loan. Before Honarkar inked this refinance deal, his then-creditor had intended to foreclose on the properties. That never came to pass, delivering a major win for the local developer whose hospitality-focused portfolio, according to court records, saw severe losses over the last year due to COVID-19 restrictions.

Honarkar’s team is working to submit a comprehensive plan for the overall restoration of Hotel Laguna. This includes a schedule and description of the future work that is proposed, including all proposed renovations, a summary of the intended use of the lower-level areas such as the conference room and commercial spaces along South Coast Highway.

Plans for the total hotel overhaul will be brought before the Planning Commission for public review at a yet to be determined date, city officials said.

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Daniel is currently managing editor for the Laguna Beach Independent. He first started reporting on Laguna Beach in 2018. Daniel moved to Orange County from his hometown of Santa Barbara in 2008 to attend Chapman University. He wrote for the college newspaper, The Panther, for nearly four years before obtaining a Bachelor’s degree in Political Science and English with an emphasis in journalism. While attending Chapman, he started interning at the Orange County Register as a community blogger in Orange. In 2012, he was hired as a staff writer covering Orange and Villa Park. He went on to cover the Nixon Presidential Library & Museum as well as housing, development, education, water, and local politics in other Orange County cities. Since leaving the Register in 2015, he has written for Law360, the Foothills Sentry, the Newport Beach Independent, the Laguna Beach Independent, Los Angeles Times Community News, BehindtheBadge.com, and the California Business Journal. When Daniel isn't busy covering Laguna Beach, he serves as ​engagement editor for a nonprofit newsroom, The War Horse. He lives in Irvine with his wife and son.

3 COMMENTS

  1. It is hard to understand how this situation as stated here: “In May, Laguna Beach ordered construction at Hotel Laguna to stop after city officials discovered that exterior work was underway without a permit. This was at least the third time city officials have formally warned Honarkar to stop unpermitted work at Hotel Laguna. At that time, Mayor Bob Whalen said it was “very disappointing and frustrating” that unpermitted work continued at the Hotel despite previous stop-work orders on various elements of the property.” was allowed to continue by our highly paid city management and building staff.

    Why aren’t our city leaders asking for accountability from our city managers snd staff? The cost to taxpayers to provide what sounds like 24/7 oversight on this project now because Mr. Honarker refused to abide by our building processes and city inspectors let this go on and on until a resident brought their ineptness to the public’s attention has to be horrendous. And the city is just now asking for a “comprehensive work plan?” Whaaattt? Who is paying for this additional oversight? Has Mr. Honarker been fined for violating our building codes and is he being billed for all of the city staff time costs incurred since this project started? I sure hope so. So sad that our landmark hotel has been wrapped up in such owner controversy and what appears to be irresponsible project oversight by everyone involved. Let’s hope the California Coastal Commission takes their responsibility a lot more seriously and protects this historic Laguna treasure.

  2. Our city leaders, mayor Whalen, mayor pro tem Kempf and city manager Dupuis love to point with pride and view with alarm instead of serving the residents. Can anyone imagine what they would do if a real development was done by Mo? It’s clear, in my opinion, why Liberate Laguna lavishly supported Blake and Kempf in the 2018 election and Whalen in the 2020 election. Based on his performance on doing all that unpermitted work and allegedly stiffing some of tthe the workers on some of the work done at the Hotel Laguna Mo has shown himself to be above the law in my opinion. And why shouldn’t he? Obviously he has found it’s easier to do the work first and get after the fact permits. Why do we pay all these outlandish salaries to officials that can’t or won’t force a developer to obey the laws? Between the city manager, the director of community development, the manager of inspectors and the individual inspector we probably have an expense of around $1,000,000 annually including salaries and benefits. And they can’t control a straightforward project like this. It appears the developers’, i.e. Liberate Laguna now aka Laguna Forward, support of these three people on our council and the councils’ support of Dupuis for city manager is beginning to show a handsome ROI. I wonder: Laguna Forward to what? Forward to Dana Point type developments? If the council ever approves another project by Mo or anyone else for that matter, there should be a performance bond with respect to design and schedule. It saddens me when I see impotent threats and pleadings for Mo to obey the law when the rest of us who do not have the political clout that are afforded to the powerful few in this village are at city governments mercy. This is why the Laguna Residents First ballot initiative to give the residents an up or down vote on projects that impact our quality of life is necessary if we are to avoid becoming a mirror image of the city south of us. The residents need a voice and that is what the proposed ballot initiative submitted to the city clerk on Wednesday 14 July 2021 will do.

  3. “Laguna Beach partially lifted a stop-work order” that must mean a “partially suppressed start-work order”. Let’s get our Hotel OPEN for BUSINESS. Git ‘er Done already!

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