Laguna Beach begins preparations for 6 major developments

In the wee hours of Wednesday morning, the city of Laguna Beach metaphorically shook hands with local real estate firm Laguna Beach Co., agreeing to collaborate on an expected long list of developments.

The City Council approved a memorandum of understanding, a non-binding agreement that outlines the company’s six upcoming projects and states each party’s intention to negotiate in good faith about bringing them to Laguna.

Though talk of the developments has circulated in town for months, the agreement marked the ceremonial start of a conversation between the city and the developer.

At several points during this week’s discussion, council members and residents noted the uniqueness of the situation — no one could remember so many large-scale projects being proposed in Laguna Beach at once.

“We just appreciate the support of the council, and this is going to be an exciting time for our hometown and our community,” Hasty Honarkar, vice president of Laguna Creative Ventures, a branch of Laguna Beach Co., said in an interview Wednesday. Laguna Beach Co. is owned by her father, Mo Honarkar.

The six major developments outlined in the memorandum are:

• Hotel Laguna: restoring the landmark hotel on the corner of South Coast Highway and Laguna Avenue
• Cleo Hotel: replacing the existing Holiday Inn on the corner of Cleo Street and South Coast Highway
• Museum Hotel: developing a boutique hotel along the ocean side of North Coast Highway between Jasmine Street and Cliff Drive. The memorandum says the developer is exploring a possible collaboration with the Laguna Art Museum for the project.
• Central Bluffs: new retail and residential development and public pathways on the ocean side of South Coast Highway between Laguna Avenue and Legion Street
• The Hive: reconfiguring the property at 777 Laguna Canyon Road, site of the former Bartlett Center and current home to Art-A-Fair. The memorandum cites the possibility of consolidating the Laguna College of Art + Design at that location. LCAD currently is based on the other side of Laguna Canyon Road, with housing and other sites around town.
• Canyon Acres: developing a lot at Laguna Canyon Road and Canyon Acres Drive into housing

Hasty Honarkar said the company plans to begin concept reviews for five projects — all except the Hive — by the end of July. A proposal to consolidate LCAD at the Hive location is expected before the end of the year, according to the memorandum.

Honarkar and Mike Cahill, president of Art-A-Fair, said the parties have an agreement to provide a long-term home for Art-A-Fair if the Laguna Canyon Road property is developed.

The memorandum passed the council on a 4-1 vote near the end of a seven-hour meeting that began Tuesday evening. Councilwoman Toni Iseman voted no, saying the country is headed toward “what is probably a shaky economy” and she wanted more time to secure an assurance bond from the developer and look at the projects one at a time.

Mayor Bob Whalen emphasized that the memorandum is only a non-binding agreement to “explore” the development opportunities. Each project would still have to circulate through the city’s traditional review processes, he said.

Still, it caused concern for some residents. Those who stayed for the entire council meeting voiced a variety of preferences, such as ensuring the developer completes the projects and taking the projects one at a time instead of together.

Resident Jacob Cherub said Laguna Beach Co. is “flooding the zone” by bringing forward six projects at once.

“This is all wrong,” Cherub said. “Here we are in the middle of the night talking about something that is the biggest impact of anything that I remember in my nearly three decades here. One of them at a time — let them prove themselves.”

He noted Mo Honarkar’s proposal in January to advance a portion of his expected developer fees to provide $250,000 to help the city’s Community Development Department process large-scale applications. The proposal was halted when City Manager John Pietig pulled it off a council meeting agenda after overwhelmingly negative response from the community.

Mark Orgill, consultant for Laguna Beach Co., said the intent of bringing all the projects together was to be transparent.

“They’re being stacked up so the public can have a clearer view of what we’re talking about,” Orgill said. “The intentions were good with putting this together.”

Heidi Miller, who owns downtown businesses Tight Assets and the World Newsstand, said she’s excited about the developments.

“All of the empty businesses around my business are killing me,” Miller said. “I represent dozens of business owners who want change. … We support these projects because we have to have them to survive.”

In addition to passing the memorandum, the council voted 4-1, with Iseman dissenting, to allow Whalen and Councilwoman Sue Kempf to join city staff in negotiating the projects with the developer. The council approved the formation of the ad hoc committee in April but clarified the council members’ responsibilities at this week’s meeting.

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