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Laguna Beach City Council members are grappling with how to best boost the city’s sales tax revenue as staff warn it’s not increasing as it should.
Like nearly every other Orange County city, Laguna Beach is grappling with increasing empty shop spaces as online retailers gain a stronger foothold.
[Read: Dwindling Sales Tax Forces Orange County Cities to Rethink Approach to Revenue]
This year, city staff project Laguna Beach’s sales tax revenue to be just under $7.7 million – a $260,000 drop compared to last year, according to the current budget.
In a study session last Tuesday, Laguna Beach mulled over a survey that showed some of the biggest issues included vacant storefronts, a lack of parking and a complicated permit process to open businesses in the city.
According to the presentation, the vacancy rates of buildings in Laguna Beach rose from 3.7% in 2022 to around 8.3% in 2024.
The report also notes that there’s nearly 110,000 square feet of vacant retail space in the city.
The survey – conducted by Kosmont Companies and the local chamber of commerce – was put together over the summer and surveyed 389 business owners and residents in the city.
Mayor Pro Tem Mark Orgill said at the meeting that he’d like to explore a vacancy ordinance to “light a fire” under landlords whose properties are vacant.
Nearly half of the respondents said that business spaces in Laguna Beach are underrepresented.
This also comes after the city council approved a $5 million dollar makeover for downtown in November — in part to raise revenue from the city’s bed tax.
[Read: Laguna Beach’s Downtown is Getting a $5 Million Makeover]
Nearly 68% of respondents said parking was a challenge in the city.
City staff say that adding parking can be a challenge as the California Coastal Commission needs to approve parking rates, adding that commissioners are often reluctant because they prioritize beach access.
Respondents also noted the loss of parking spaces to outdoor dining and trolley stops — last November, the city received $7.2 dollars in county grant money to expand their trolley services.
[Read: Laguna Beach Expands Trolley & Free Ride Sharing Services]
City councilmember Bob Whalen called the parking code “nonsensical” and expressed an interest in amending it to assist businesses.
At the study session, Mayor Alex Rounaghi directed city staff to create a plan addressing the parking situation in Laguna Beach.
“It’s not that complicated a problem. It’s an easy problem if we want our small businesses to succeed. If you’re a small business, it’s an irrational act to open a business in Laguna Beach,” Rounaghi said at the meeting.
Zac Cornwell, owner of Wigz Laguna, a local sandwich shop, said that his business took almost three years to get approved due to the parking requirements.
“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,” Cornwell said during public comment.
Cornwell said that he needed a certain amount of parking spaces in proportion to the square feet of his sandwich shop and called the parking requirements “unrealistic.”
Laguna Beach considered charging for parking last summer in an effort to raise more revenue for the city.
[Read: Free Parking Might Soon Be More Sparse in Laguna Beach]
Meanwhile, half of the survey respondents said that the business climate in Laguna Beach has declined over the past few years.
Emily Wilson is a Voice of OC intern. You can reach her at egwilson33@gmail.com or on Twitter @ewilssson.
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