Planners Reject CVS in Downtown

By Lauren Korduner, Special to the Independent

The Planning Commission voted unanimously, 5-0, to deny CVS Pharmacy entrance into downtown Laguna Beach at a hearing this week. The national retail pharmacy sought to take over Laguna Drug, which operators say has struggled to turn a profit.

CVS spokeswoman Stephanie Cunha said, “At this time, we are reviewing the planning commission’s decision in order to determine our next steps.” The applicant has a 14-day right to appeal the Wednesday, June 7, decision to the City Council.

At the hearing, Sheila Bushard Jamison, of Bushard’s Pharmacy, told commissioners 1,200 people signed copies of a petition against the CVS project. Many other speakers cited their affection for Bushard’s and potential competition for the business as their main reason to oppose the project.

Among them was Tom Heath, owner of Main Beach Toys Games. He expressed concerns that local independent businesses would suffer. “The city would lose a lot of the charm that is has, and I see a lot of retail closings, if CVS comes to town,” Heath predicted.

Heath and other residents cited the proposal’s plan to sell alcohol as a reason to reject it. Downtown has an “undue concentration” of alcohol licenses for off-site consumption, according to the staff report.

Five businesses currently operating within the downtown area hold such licenses. The California Department of Alcoholic Beverage Control defines “undue concentration” in this area as two or more “off-sale” licenses, the staff report says.

Several residents spoke in favor of the project. Linda Frost, a resident since 1972, said she would rather not travel to South Laguna’s CVS because she loses her parking space “for days on end.” She would prefer to walk downtown to pick up prescriptions for herself and her husband.

Carole Zavala, a former interim executive director of Laguna Beach Seniors, said, “health is a primary issue for this aging demographic and having more than one option is very important to us.” Zavala worked with Pacific Planning Group’s Karen Martin to interview seniors and conduct focus groups, she said.

Not all pharmacies in town are open on Sundays or carry cancer drugs, she added. On Sunday, Bushard’s pharmacy is closed, while CVS and Sunset Drug keep pharmacy hours.

The space occupied by Laguna Drug in 2004 previously stood vacant for eight years, pointed out Mike Henn, chief financial officer for Quality Drug, which operates Laguna Drug and two other pharmacies in Newport Beach.

In arguing for approval of CVS, he cited Quality Drug’s record of service in Laguna Beach, including serving the needs of HIV, Hepatitis C and the economically disadvantaged populations within the community.

If the CVS application is not approved, Laguna Drug will seek early termination of its lease, which expires in 2020, Henn said in a previous interview. “We have no plans to approach another buyer at this time,” he said.

Henn argued that the proposal does address an unmet need he called “health care service,” which had not yet been part of the conversation, he said.

Commission member Ken Sadler focused on alcohol licensing and the police department’s description in the staff report of downtown as a “high problem area.” It is rare for the police department to weigh in on a permit application, Sadler said. For project approval, commissioners would need to justify the sale of alcohol at this location as a “public convenience or necessity,” staff said.

In its objections to the proposal, staff cited the city’s Downtown Specific Plan, which lays out development guidelines that discourage national chains that fail to differentiate their product offerings. Staff noted that the proposed interior design plan by CVS would be distinctive from other locations, but its proposed inventory is “comparable” to items found at Coast Hardware, Whole Foods Market, Bushard’s Pharmacy, and other downtown merchants. The CVS proposal also fails to meet the “unique merchandise” requirement of the Downtown Specific Plan, the report says.

In a May 23 letter, advocate Pacific Planning Group argued that the proposed CVS inventory satisfies an “unmet need,” such as “every day goods and necessities,” including milk and eggs, affordable health and beauty items, underwear and socks, school and office supplies, and customized seasonal items. Nearby retailers offer “specialty” and “luxury, high-end comparable products,” the letter said.

This was not enough to sway city planners, however. “Staff believes that the ubiquity and brand recognition merits more differentiation than has been submitted,” the report said.

In seeking another operator for the space, Quality Drug aims for a new business direction and plans Quality Drug Clinical Care, Henn said. This facility will continue the company’s “holistic approach” with private consultation rooms and referral services to organizations such as Shanti Orange County and Laguna Beach Community Clinic. Henn provided no timeline for the project or a location.

Shanti Orange County executive director and Laguna Beach HIV Advisory Committee member Sarah Kasman signed a letter of support for CVS.

Should the CVS project move forward, the national pharmacy chain will retain non-HIV prescriptions, Henn said. Regardless of the outcome, Henn said Quality Drug will continue to provide delivered prescriptions for all of its HIV customers—over 500 living in south Orange County. “Clients will experience uninterrupted – and even enhanced – service,” Henn said.