With a set of substantial projects in the works, Laguna council will consider way to fully cover city costs

Laguna Beach is moving to shore up its coffers ahead of several substantial developments proposed by a local real estate company.

The City Council is expected to sign an agreement Tuesday with the Laguna Beach Co. to cover 100% of any city costs related to the firm’s six upcoming major developments.

Doing so would levy an additional “cost recovery fee” of 25% on the company — on top of the recently upped local building and zoning fees that typically cover 70% to 75% of city costs for large projects, according to a staff report.

The company is “amenable to this approach to recover city costs,” the report states.

Laguna Beach Co. has made restoring the historic Hotel Laguna on the corner of South Coast Highway and Laguna Avenue its priority. As part of that effort, the company also is expected to redo several other buildings it owns on Coast Highway between Laguna Avenue and Legion Street.

Other company-proposed projects include replacing the Holiday Inn on the corner of Cleo Street and South Coast Highway with the Cleo Hotel, developing a boutique hotel and retail and gallery space along North Coast Highway between Jasmine Street and Cliff Drive, reconfiguring The Hive property on Laguna Canyon Road and developing housing on an empty lot at the corner of Laguna Canyon and Canyon Acres Drive.

All those projects are in the initial concept review stage, according to the company.

City Manager John Pietig said the fees proposal has nothing to do with an earlier offer by Mo Honarkar, president of the Laguna Beach Co., to provide $250,000 for additional city staffing to process the major projects. Pietig pulled that item from the council agenda in January after receiving negative feedback from the community.

“It’s completely different,” Pietig said. “Because their projects are more complex in nature and likely to undergo more scrutiny, among other things, it’s going to cost more to process — more than the typical fee would recover.”

He noted the proposal would “accomplish the City Council’s goal of 100%” recovery. To that end, the council in April approved forming an ad hoc committee made up of two council members, city staff and company representatives to analyze the projects and negotiate possible public benefits.

More Design Review Board changes

The council also is expected to make a couple decisions Tuesday concerning the often-contentious Design Review Board.

One is a mostly procedural vote — but that could change if Mayor Pro Tem Steve Dicterow’s suggestion is adopted.

The council decided in 2006 that anyone appealing a DRB decision would have to provide substantial evidence about the specific appeal. That procedure eliminated de novo appeals — under which a matter can be reviewed in its entirety without consideration of previous decisions by other bodies.

As written, the proposed ordinance would have the council conduct a de novo appeal hearing only if the DRB’s original vote was close. If four or more of the five board members supported a decision, then the council would continue to review cases on a substantial evidence standard.

Dicterow wants to revise the ordinance so that any DRB appeals would be judged de novo. He said he has disagreed with DRB decisions in the past, but his “hands were tied” by the substantial evidence standard.

“This is not saying that our judgment is better than Design Review,” Dicterow said. “Frankly, Design Review has much greater expertise and I would still probably give tremendous deference … but, I want my hands untied.”

The council also will give direction on whether to allow more projects and minor variances to be reviewed administratively. The proposal is part of the second phase of efforts aimed at streamlining the local design review process.

The council will hold a joint meeting with the Design Review Board at 4 p.m. Tuesday, with its regular meeting following at 6 p.m. Both will take place in the council chambers at City Hall, 505 Forest Ave.

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