The Royal Hawaiian, once the watering hole for locals hankering for a good tropical drink and a kitschy, tiki vibe, closed its doors last weekend after 65 years.
The latest owner, Lyndon Douglas Cole, said the largest contributor to its closure was the restaurant's conditional use permit, which only allowed amplified music and entertainment until 11 p.m. Fridays and Saturdays. He also cited lease negotiations and the slow economy.
Before the permit was issued Feb. 23, 2011, the restaurant had offered live entertainment until 1 a.m. Fridays and Saturdays without necessary city approval. Cole said that without those extra two hours, the restaurant lost nearly $25,000 a month.
However, the city maintains that it did its best to balance the considerations of the adjacent neighborhood and those of the business.
Some Lagunans contend that the Royal Hawaiian's change of ownership in 2006 from Francis Cabang, who opened it in 1947, altered the restaurant dramatically. After that happened, the place just wasn't the same.
Planning Commission takes action
In recent months, the Planning Commission found that the restaurant's noise levels had surpassed limits on multiple occasions, and were in violation of the restaurant's permit.
At the commission's March 28 meeting, the panel notified the Royal Hawaiian that it was on a three-month probationary period and if multiple violations occurred, a hearing would be called to discuss possibly revoking its permit.
The city's planning manager, Ann Larson, said Thursday that in her more than 20 years with the city, she has seen only two permits revoked. She added that it would have taken continued violations to get to that point for the Royal Hawaiian.
Seven people came to support Cole and the Royal Hawaiian at the March meeting, two of whom were employees.
Local artist Nicholas Hernandez appealed to the commission, asking for it to consider the people who enjoy the restaurant's offerings. He pointed to music as an important part of a community gathering.
Employee Joaquin Garcia said he worried that the restaurant would shut down because of one neighbor who he believed was issuing the majority of complaints: Carole Zavala.
Multiple speakers at that meeting were worried that continued complaints could cause the restaurant to violate its probation.
Larson pointed out at the end of public comments that a hearing was "not going to be based on the complaint but the substantiation of a violation."
However, Zavala wasn't the first or only resident to complain.
Other residents have attended meetings, submitted letters and called Laguna Beach police since as early as 2007, according to city documents.
A resident at 350 Cliff Drive submitted a letter to the city on Dec. 1, 2010, to report that the home's windows and floors vibrated late into the night, and that the noise seemed much louder since the restaurant's remodeling, which began in 2006.
Residents Ron and Dianne Russell wrote on Dec. 8, 2010, that the restaurant was creating a "nightclub atmosphere" and that they were experiencing parking issues, increased loitering and traffic.
Julie Harnes, who lives on Coast Highway, also reported that day that she awoke at 3 a.m. one day to people vomiting and attempting to "sober up" prior to driving.
At the March 28 meeting, the Royal Hawaiian's lawyer, Michael Cho, said the owner had attempted to address these concerns over time. He mentioned one complaint came in at 9:45 p.m., well before the 11 p.m. cut-off.
"If you're going to live next to a commercial area, there are certain noises you will have to live with," Cho said. "If you want perfect quiet you can move somewhere in the canyon, up a hill and not have to deal with it."
'We were just enforcing city code'
Planning Commissioner Norm Grossman said Monday that the Royal Hawaiian wasn't being treated differently than any other restaurant in a residential area.
Grossman cited the city's noise ordinance that has set a limit for the last decade.
After a code enforcement officer's measurements revealed the noise levels were too high, Grossman said, the commission offered to hire an independent party to do new readings, as a means to exhaust all options for Cole.
Cole said by the time that option was offered, he was too far down the hole to afford it.
"It was already over," Cole said. "I had already thrown out a quarter of a million dollars."
Grossman said the city was not imposing any new noise requirements on the restaurant.
"We were just enforcing city code," he said.
Cole said he was originally under the impression that his entertainment permit could be grandfathered in after the ownership change, but Larson said the city had no evidence that the prior owners ever had live music. She said in order to be grandfathered in, the previous owner would have had to continuously provide music for a year, with city approval.
Planning Commissioner Anne Johnson said when it came down to it, the main concern wasn't neighbors' complaints, but the fact that the Royal Hawaiian was violating its permit and the city's noise ordinance.
"We said, 'Be nice and stick to your [conditional-use permit] and there will be no problems,'" she said.
Johnson said she was surprised by the news of the closure and that she hadn't heard complaints since the March 28 hearing.
"We're always very sorry to see a business in town close," she said.
Cole, a Corona del Mar resident, said trying to keep the island-themed restaurant afloat cost him nearly $5 million. At this point, he said he doesn't know if he'll be able to keep his house.
An ongoing issue
Grossman said "the balancing act" of supporting local businesses while taking residents' concerns into consideration is an issue the city constantly confronts.
Larson pointed to Mosun at 680 S. Coast Hwy. as an example. That sushi restaurant closed last August.
After a number of residents complained about its upstairs "Club M," the building required modifications to muffle the sound. Special sealers were installed around the doors and windows, and insulation was added.
Mozambique also had to modify its building to muffle sound, Larson said.
Cole said that people are going out half as much due to the economic downturn, and when they do go out, they wait until the weekend. He said his business, and others, usually scrape by during the week and then make a profit on weekends.
He said the 11 p.m. wrap-up time for music was the nail in the Royal Hawaiian's coffin.
Cole said although he loves Laguna Beach, he has found it to be an "incredibly negative business atmosphere."
'I think it lost its soul'
Except for its legendary drink, the lapu lapu, the Royal Hawaiian ditched its original flair with the ownership change and subsequent remodel, which finished in 2008.
The renovation changed the Hawaiian restaurant that had become iconic for its campy decor, from its aquariums full of colorful fish, Polynesian scenes adorning the walls and tiki lamps to its looming red-eyed tiki statue that greeted patrons at the front door.
Plasma TV screens, sleek booths, granite surfaces and contemporary tables took over during the two-year renovation.
"It wasn't nearly the same," said Michael Rodriguez, a Laguna Beach native. "It closed as soon as the Cabangs sold it."
Rodriguez, 48, was a Royal Hawaiian regular from the 1980s until about 2004. He went back last summer.
"I think it lost its soul," he said.
Billy Sherman, 47, said he was disappointed to hear about the closure, but said he wasn't surprised.
"It had changed from the way it used to be," he said. "It lost the whole classic vibe it was and turned into something more generic."
Regardless, Sherman said, the city is losing a piece of history.
"It's losing a landmark. I hate to hear it close," he said. "Everyone wanted a piece of it because it's going to be missed."