Commentary: Keep Laguna from being a Potemkin village

Bryce Alderton’s piece “Laguna’s charm? That’s a trademark” (Jan. 22), was timely. Laguna Beach is at a critical crossroad as it applies to the town’s core shopping district. Absent the Haggen fiasco, those businesses that appear to be thriving are either chain-related or those with a regional presence. The rest measure profitability in terms of basis points — not percentages — in a good year.

Sam Goldstein’s comments, particularly in light of his position as a lessor, were both instructive and troubling. His point that chains exhibiting good qualities and fiscal fitness have a good fit within the Village, e.g. his Tommy Bahama tenant in the Heisler building, was instructive. But his comment “You have to have companies that offer deals” was troubling. What “deals” can be made by a core business community that is comprised primarily of single-owner businesses?

Mr. Goldstein knows more than most, having vetted the financials of dozens of candidates for the Heisler building locations, that most are under-capitalized or factored — with little hope but of little more than limited sustainability. They are squeezed between two forces — building owners wanting nothing less than a triple net lease arrangement, which generally includes a percentage of profits, and tourist as well as local consumers who want nothing less than deep discounts.

Here’s an idea — might lessors provide flexibility in their lease arrangements wherein they share in the yearly revenue risk, accepting rent discounts in down years and increases in good years? It might make the provision of discounts to consumers on the buy side of the equation a little easier for single owners to live with. But, in a region where wealth has been built on sharp-elbowed real estate deals, we’re not likely to see creative balancing of the risk occur anytime soon.

Meanwhile, lessors, with all due respect and acknowledgment to the challenges they face with capital and operating expenses, will most likely defer to fixed rental prices — and, as a result, under-capitalized owners will continue to fail and Laguna Beach’s commercial viability will continue to fade, giving way to nothing more than a charming Potemkin village running along Forest and Ocean, where the parking spots are filled with beachgoers while stores remain empty. There’s no easy answer and there are no villains — it will take owners, merchants and the council to address downtown in creative ways to face challenges that have found Laguna Beach at the tipping point.

RICH ENGLISH is a Laguna Beach resident.