Laguna Beach looks for answers to boost businesses

Laguna Beach city officials, responding to the findings of a survey conducted last summer, are looking for solutions to improve the local business climate.

The Laguna Beach Chamber of Commerce worked with a consultant, Kosmont Cos., to identify challenges and opportunities for the city’s businesses.

A survey open from July to August collected 389 responses from business and property owners, employees, residents and visitors.

Top issues discussed during a Jan. 28 City Council study session were retail vacancies and parking requirements as barriers for prospective new businesses.

Kosmont’s report noted the city has 1.3 million square feet of retail space, a number that has remained unchanged in the past six years.

Vacancy rates in those buildings, however, rose from 3.7% in 2022 to 8.3% at the time of the survey. A significant portion of the increase was attributed to the closure of the Gelson’s grocery store in South Laguna.

Retail trends have shown a shift in consumer preference to shop online for a variety of goods, although the study found Laguna Beach performs well against other nearby coastal communities when it comes to sales per capita for its food and drinking establishments, as well as its clothing stores.

City Manager Dave Kiff said the downtown area “needs a lot of help,” expressing disappointment in the empty storefronts.

Mayor Pro Tem Mark Orgill offered up a suggestion, saying, “I would like to explore a vacancy ordinance to light a fire under some of our landlords that let these buildings go vacant for years and years.”

In addition to rent climbing by 12% over the past three years to $62 per square foot, Laguna business operators said they were frustrated by regulatory restrictions.

Zac Cornwell, the owner of Wigz Sandwich Shop, said that once he applied to open a business in 2020 it took him 27 months to get necessary approvals from the city and the county, and another six months to build out the shop.

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“I am what you guys want, what the town wants,” said Cornwell, describing the business as a fast-casual, outdoor dining option that caters to the locals. “Would I do this again? Not without a huge investor who wanted me to run their restaurant and be a part owner with them. It’s just too stressful. My entire future career, my family’s future was on the line of regulations here that I didn’t even understand when I got into it.”

A call for additional public restrooms in South Laguna was made by another business owner, who said he ran a liquor store adjacent to the sandwich shop.

Laguna Beach averaged approximately 136,800 weekly visitors to its downtown area over a recent 12-month period, which comes out to about 7.1 million visitors for the year. Kosmont representatives said they utilized anonymized mobile app data to come up with the figures.

Roughly half of the survey’s respondents said they felt the business climate in the city had experienced a decline in the past few years. Only a quarter of responses said it had improved.

Parking for customers and employees was a concern for 68% of those surveyed.

“[The] parking code, we have to tackle that,” Councilman Bob Whalen said. “It’s a mess. … I think it’s just nonsensical in lots of ways. … There were a number of people concerned when we changed the parking standard downtown to three [spaces] per 1,000 [square feet], that it was going to be a disaster, it was going to be a food court and the roof was going to fall in. None of that’s happened.

“I think we really need to be proactive in moving ahead with changes to the parking code that will assist businesses. ... I think it will assist some landlords, owners [in] improving their abilities if they have opportunities to expand a little bit without being hamstrung by parking.”