Letter: Consideration of Local Initiatives

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While I have worked in Laguna for many years, I am now seeking to raise a family in this city. I understand the frustrations that many feel about the growing amount of visitors and traffic that come to the city. Unfortunately, it is everywhere. Our issues are not as bad as larger cities such as San Francisco and Los Angeles, but we sometimes feel it more. We have only two roads in and out, a complicated landscape of hills and ocean that require specialized management, but our greatest challenge may be the government mandates that require us to provide affordable housing and access for millions of visitors a year. Under these mandates, we must provide more affordable housing, and we must provide incentives for developers to providing affordable housing.

For 16 years, I had the pleasure of living in Costa Mesa before buying a home. Costa Mesa has a residency of more than 60% rentals. According to the Regional Housing Needs Assessment, Costa Mesa didn’t need any more affordable housing, but families wanted to move there and buy homes. Lots that were once filled by one home were being bought and developed into lots with six to eight townhomes. A group of residents known as Costa Mesa First ignited, but in actuality, they were always there. They opposed the Segerstrom Home Ranch Project that would have developed up to 3.1 million square feet and up to 20 stories high in 1988.

In 2016, Costa Mesa First created an anti-growth initiative to halt all new development. It is almost identical to the initiative that Laguna Residents First has created. In a quest to better understand the viewpoint of Laguna Residents First, I have met with some of their leaders and proponents. Of their complaints, the issue I find most prevalent is that they do not believe that our City Council listens to and represents the residents of Laguna Beach. Strangely enough, that was actually the same complaint of the Costa Mesa First folks. So, what the two cities really have in common are residents that are angry at their local city leaders.

Forward a few years later, Laguna Residents First has qualified to have their initiative on the ballot. For me, it’s Déjà vu all over again! Angry residents and a defiant council majority that is fighting back. How did this story turn out for Costa Mesa? Well, the council majority lost and the unions came in funded a new council that in turn voted for the development of a 15-acre multi-use development property with 1,057 rental units known as One Metro West.

What does this mean for Laguna Beach? On the ballot will be three initiatives. One anti-development initiative by Laguna Residents First and two by a monstrous union known as UNITE HERE Local 11. This union has raised a million dollars to support their initiatives. They are responsible for preventing Disneyland from opening late in the pandemic hurting thousands of employees. The initiatives created by UNITE HERE not only parallels the language of the Laguna Residents First initiative, but creates a minimum wage of $18 an hour for hotel workers with a $1 increase per year through 2026. Think this sounds good? Ask the residents of Costa Mesa that watched their hotel industry turn into dozens of dilapidated motels that house hundreds of homeless, human traffickers, and drug peddlers. These initiatives will cripple the tourism industry that helps keep this city vibrant. Many of the businesses and restaurants that you love will struggle to survive. Don’t believe me, believe them. Ask them!

Doug Vogel, Laguna Beach

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8 COMMENTS

  1. Doug Vogel, you forgot to mention pedophiles and murderers in you fear mongering article. The LRF ballot initiative is not anti growth but will give the citizens a voice in determining the type of growth that minimizes the degradation of our quality of life just to enrich the absentee property owners and the businesses in Laguna Beach. Since property taxes account for a disproportionate amount of the city budget and the city subsidizes the building owners and business interests to the tune of, now, well over $20 million annually many residents believe we need to decide on large projects that are inconsistent with our city’s charm and character. Why should the residents not have a voice, for example, in developments that do not mitigate their additionally caused traffic and parking problems? And why should the residents pay for parking structures that increase the value of commercial real estate? This is crony capitalism at its finest.

  2. Welcome to Laguna Beach. Now that you make a cogent arguement against the Politboro you’ll be ostracized and froze out. Thanks for coming, we don’t need you. There are millions lined up all over the world to put up with our nonsense.

  3. Thanks Chris! As I had to edit my original letter to fit, I forgot to mention that someone will mostly likely accuse me of fear mongering. Now I can continue on with what I had to leave off.

    In actuality, the pedophiles and murderers could actually already be here. There are some individuals who I have noticed living in some of our more affordably priced hotels for months at a time. I have seen them disturbing the peace and police are often called out to respond to them. I do not believe that Megan’s law protects the public when offenders wish to live in hotels for extended periods of time.

    Property taxes do not pay for as much as you think. As a city, Laguna Beach receives less than 10 cents on the dollar of property tax revenue while San Francisco receives robust share as much as $1.60 on the dollar. That is why they have more resources to tackle their homelessness problem. While Laguna Beach does receive more property tax revenue than many other cities in Orange County, because of all the new homes that have been purchased in the last 10 years, it is not enough. For this reason, the City relies on sales tax and the transiency occupancy tax that is generated through tourism. In fact, more than $80 million is generated just through arts based tourism in Laguna Beach each year.

    Should this initiative pass, it may trigger enhancements on projects to be reviewed that are already in operation. Extra outside seating at restaurants would be considered an enhancement. The use of a property as a carwash could be an enhancement. Even the use of the South Laguna Community Garden could be considered an enhancement. I think there would be many unintended consequences that the authors of these initiatives did not intend.

    You are correct though. The residents should have a voice. They should elect public officials that they believe represent their values and will protect their interests. They should not create initiatives that circumvent the process that holds elected officials accountable. Can you imagine if in the formation of our Republic a group of colonists decided to create an initiative that would seek to override the power of Congress? So I ask you, do you support true democracy, or this type of direct democracy that anarchists speak of?

  4. Doug – Your comments from 29August22 10:37am, expanding on your LTE are misleading in many respects. You make it out that the City relies more heavily on the Sales and TOT taxes than it does, in comparison to the property tax, which in actuality contributes the MAJORITY to the City’s budget. Then, you go on to quote an irrelevant stat (no doubt commissioned by the Chamber of Commerce), about how much money arts-based tourism generates annually:

    “While Laguna Beach does receive more property tax revenue than many other cities in Orange County, because of all the new homes that have been purchased in the last 10 years, it is not enough. For this reason, the City relies on sales tax and the transiency occupancy tax that is generated through tourism. In fact, more than $80 million is generated just through arts based tourism in Laguna Beach each year.”

    You make it sound as though this disputed $80 million goes to the city’s coffers. It doesn’t. Whatever the amount is, goes to pay people’s salaries, business owners’ profits, etc. and the majority of that leaves Laguna with little trace.

    The fact remains, that LB property taxes contribute the lion’s share of the General Fund revenues (ie the account that pays the majority of the City’s operating expenses). Here is the breakdown from the City’s Proposed Budget FY 2021/22:
    * Property Taxes – 56% of General Fund revenues
    * TOT – 13% of General Fund revenues
    * Sales tax – 9% of General Fund revenues
    * Com Dev fees – 3% of General Fund revenues

    Further, your argument about property tax monies leaving the city, while only 10% returns after the journey to Sacramento sounds alarming. But the same thing happens to sales tax monies. Only 1 cent of the 7.75 cents a person spending money at Laguna stores/restaurants or bars returns from its Sacramento journey (that’s roughly 13%). But the fact still remains: property taxes pay the majority of the City’s operating expenses. That’s why opponents of ever more intense businesses, catering to ever larger groups of tourists object to this money losing (for tax payers, but not for private business owners or landlords) proposition.

    Tax-payers subsidize the tourism industry to the tune of approx $20 million annually. If you accept the 6.5 million annual number of tourist/days metric, it means that 1 visitor coming to Laguna on 1 day costs tax-payers about $3.07/day. That cost is largely due to fixed costs that we tax-payers must pay for public safety & public works staffing. You bring in more visitors, our public safety & public works staff will increase, so you don’t get any economies of scale. And, in order for each tourist/day to cover the cost to tax-payers of $3.07? Well, if they only spend on retail or restaurants, that 1 cent per dollar spent metric comes to play; meaning they’d have to spend $307 daily, in our stores or restaurants to cover the costs to tax-payers. (The maths is a bit different if the visitor is paying for City-parking, more of which stays in-City, as well as if they stay in a hotel, where the TOT they pay stays in Laguna).

    Day trippers will bankrupt this city, and ANYTHING the City does to intensify & thus increase the numbers of day-trippers is forcing tax-payers to forego necessities and niceties we would otherwise have.

  5. Michael, I’ll be brief.

    Property tax: 45 million (should be higher)
    TOT Tax (hotel visitors): 15 million
    Sales tax: 6 million

    Our property tax is low considering the value of our homes. More than half of our residents are at 30 year plus prop 13 rates.

    Our sales tax should also be higher to about 12% which is a 100% increase. We need more tourism.

    Our TOT is saving this city’s rear end! Without the TOT, our city could not properly function.

    The numbers I provided are 2020-21 coming out of covid. Sales tax and TOT tax should be higher.

    Again, back to Costa Mesa. After 2007 crash, tou couldn’t depend on property tax revenue. If it wasn’t for South Coast Plaza, they would have had to raise taxes on residents.

  6. P.S. That projected $80million spend on Laguna Beach arts would produce (80,000,000 * .0775)= $6,200,000 in sales tax revenues to Sacramento, of which 12.9% (that’s 1 cent from 7.75 cents sales tax) would flow back to Laguna Beach (6,200,000 * .129)=$799,800. That’s 800K in an annual city budget of approx $100million, or less than .8%. I also look askance at the 80million/yr number that the Chamber puts forward. So many of their “economic activity” estimates incorrectly double-count, that is, they attribute X to arts spending, but some significant portion of X then also shows up in some other category.

  7. Doug Vogel on your fear mongering you forgot to mention ISIS and Russian spies.

    As to your comment about homeowne not paying enough taxes you need to account for the $20,000,000 annual subsidy paid just to have the hordes of 6,500,000+ each year reduce our quality of life. Most of his 29 million comes from the homeowners. But you should be fair and mention that the Hotel Laguna has, I believe, a 99 year lease and of course the owners of the hotel have a tax basis that may be considerably less than 10% percent of its actual value. Ditto for virtually all the rest of the commercial property owners. As an example when the Presbyterian Church purchased a lot on 3rd Street for $1.94 million dollars the tax basis of was about $184,000 for the previous owner, less than one tenth of what the Church paid for it. So please be more even handed when it comes to paying taxes.

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