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Laguna Beach is famous as the perfect spot for dinner, a seaside Sunday brunch or a stroll around the city’s many shops and art galleries. Beach-goers flock there year-round for a rowdy game of volleyball and a dip in the ocean.

But what’s it like to live there? According to Bill Thomas, it’s not always paradise. “On weekends there’s too much traffic. I tend to stay holed up in the house,” he said. “But I’m still fond of Laguna Beach. People smile a lot. It’s like no other place.”

Thomas was among the many military men who remained in Orange County after being stationed here during World War II. When the war ended, he moved to Laguna Beach and teamed up with his father to run a photographic equipment and art supply store. The shop became Bill Thomas Camera, and eventually settled into its present location on Ocean Avenue. Although Thomas sold the store last year, the new owners kept the name and the store is still a mainstay of the central Laguna Beach business district.

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Even though the area is crowded now, it still retains a village atmosphere. “From here you can walk or ride a bike to the store, to a movie, even to work if you are lucky enough to work here too,” said Katera Robbins, who moved to central Laguna Beach three years ago.

By the looks of things, residents have learned to utilize the mild climate to turn their yards into private refuges. It’s common to see such cottage flowers as sweet peas and sunflowers growing in front yards instead of clipped hedges and manicured lawns. Bougainvilla-covered fences mark property lines between clapboard cottages with lace curtains at the windows. Some of the larger craftsman-style homes have chimneys and fences made of stones rubbed smooth by the sea. It’s not a fussy neighborhood.

If you really want to know Laguna Beach intimately, walk back towards the village and stop in at the library on Glenneyre Street. Ask for Karen Wilson Turnbull’s book, “Cottages and Castles of Laguna-Architectural History 1883-1940.” Turnbull, a third-generation Laguna Beach resident, tells the stories behind many of Laguna’s beach cottages and interesting structures.

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For example, the Hotel Laguna, a dominating presence in the neighborhood, was built in the classic mission style popular in the 1930s, while the Cottage Restaurant is a perfect example of a 1917 craftsman bungalow with Japanese-Swiss styling. The restaurant has an extensive historical photo collection on display that provides visitors with a sense of how Laguna Beach evolved.

The area has long served as a seaside hideaway for Southern Californians seeking a refuge. In the early part of the century, it was tradition for many families to pitch a tent on the main beach for several weeks during the warm summer months. This led to the construction of beach cottages and summer homes. A small nucleus of houses and shops evolved near the main beach and eventually became the core of the city. The area gained some reknown as an artist’s colony and remained secluded until construction of Coast Highway in 1926 provided links to the north and south.

Recently the San Joaquin Hills Transportation Corridor Agency approved a key document that could allow construction to begin on a major toll road inland through Laguna Canyon. Many Laguna Beach residents fear the highway would lead to overwhelming growth, traffic congestion and air pollution. Residents of the city’s central portion would be affected most since visitors flock to the restaurants and shops just a few blocks from their homes.

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Opponents recently raised $18,000 with an art auction to help the Natural Resources Defense Council wage a court battle against the road. In a related effort, the City Council last month unanimously approved a historic agreement to purchase 2,150 acres of land in Laguna Canyon from the Irvine Co. The $78 million purchase blocks a 3,200-unit development proposed by the Irvine Co.

The fight against the toll road and to preserve open space is typical of many Laguna Beach residents’ community involvement. The Friends of the Laguna Beach Library are working to raise funds for a 450-square-foot addition.

At a recent afternoon strategy session, Friends of the Library members John and Margaret Hefti, who have lived in Laguna Beach 21 years, admitted that the meeting disrupted their favorite daily ritual--an afternoon swim in the ocean.

“We get down to business around here. It’s not all sun and fun,” said Margaret Hefti. “But I think people live here just so they will be able mix more fun and enjoyment into their daily life. On a warm day, the ocean and the beach are just irresistible.”

Population Total: (1990 est.) 3,264 1980-90 change: +-6.0% Median Age: 34.9

Racial/ethnic mix: White (non-Latino): 88% Latino: 7% Black: less than 1% Other: 5%

By sex and age: MALES Median age: 34.5 years FEMALES Median age: 35.6 years

Income Per capita: $18,822 Median household: $27,145 Average household: $33,267

Income Distribution: Less than $25,000: 46% $25,000-49,999: 33% $50,000-74,999: 13% $75,000-$99,999: 4% $100,000 and more: 4%

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