Mayor addresses challenges, successes in Laguna

The city is changing more now than at any time in the past couple decades, Mayor Elizabeth Pearson told a group of business leaders at the annual State of the City address May 8 at the Montage Laguna Beach.

A demographic shift, coupled with increased demands on city staff and competing agendas from special-interest groups, is taxing resources like never before, said Pearson, who is serving her third full mayoral term.

She called on business owners to foster a tourist-friendly city and continue contributing to arts organizations that draw visitors and generate needed revenue.

“Without our tourists, we’re not meeting a good chunk of the city’s budget needs to serve residents,” said Pearson, who has decided not to run for re-election in November.

Laguna is losing day visitors who are fed up with traffic and parking difficulties, Pearson said.

“Everyone tells me what a pain it is to come to Laguna,” she said. “The day-trippers can’t get to restaurants. We need to accommodate visitors to ensure the economic health of the city.”

Tourism’s role is evidenced in how the city generates revenue, primarily through property, sales and hotel bed taxes, said Pearson, who was speaking at an event sponsored by the Laguna Beach Chamber of Commerce.

Bed taxes generate 11% of the city’s operating revenues, with 1% earmarked for the arts.

Sales taxes make up 10% of operating revenues, a large portion coming from bars and restaurants.

“Ours is, in large part, a tourist economy,” she said. “Our arts organizations generate about $49 million a year in economic benefit to Laguna Beach. The arts create and maintain jobs and bring tourists to our hotels and restaurants year-round.”

Pearson listed three challenges facing Laguna: public safety, parking and getting around, and increased demand to repurpose land.

“Contrary to popular belief, the city does not own a lot of the land in the city,” Pearson said.

She referenced the county-owned open space areas and Laguna Canyon Road and Coast Highway, both of which are state highways.

“With our history as a disaster-prone city, and with increased awareness of the importance of being able to navigate the city in a disaster, we are seeing more demands for ensured egress and ingress in Laguna Beach in the event of a disaster,” Pearson said. “Funds need to be expended to minimize the risks that are inherent with above-ground utility lines. This is an expensive undertaking, and money becomes an issue.”

Collaboration among multiple agencies is time-consuming but critical, Pearson said.

The city is working with a consultant and Caltrans on possible improvements to Laguna Canyon Road, such as paths dedicated for pedestrians and bicyclists and the burying of utility poles.

Laguna also will experiment this summer with strategies designed to relieve parking congestion, primarily downtown. On- and off-street meter rates in some areas will increase to align with demand, and the city is promoting peripheral lots to encourage the use of public trolleys and buses.

The mayor noted progress, from preserving open space areas to securing property for the day laborer site, the Pacific Marine Mammal Center and the dog park.

But the demands haven’t stopped.

Both the mammal center and dog park sit in Laguna Canyon, which has seen a slew of development proposals in recent months. The council directed city staff earlier this week to investigate a possible moratorium on development until a comprehensive plan for the canyon can be created.

“There is a lot of push-pull going on as it relates to land-use requests and neighbor concerns,” Pearson said. “The amount of staff and City Council time has quadrupled in the last year around these issues.

“Competing groups believe in causes, all good, there’s nothing wrong with them. But the result is polarization as we all witnessed with issues like the Village Entrance proposal, where we had a push-pull situation between the chamber [generally supportive of a parking structure] and the residents.”

Pearson heeded the residents’ concerns, suggested the structure be removed from the project and received support from her council colleagues.

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Second-home destination

Since 2000, the average Laguna resident is older, with more money and living in a house with high market value, according to statistics provided by Pearson

Average household income in Laguna increased more than 20% from 2000 to 2010. Home values rose by nearly 53%, Pearson said.

A swell of homeowners bought second homes in Laguna during that time, but they do not show up in the city’s census count, explaining the decrease from 23,727 in 2000 to 20,364 in 2010, she said.

“Sometimes they don’t necessarily understand our values, and they have a tendency not to commit to our community, especially our nonprofits,” Pearson said of the part-time residents. “In addition, they are not here all year to support our restaurants and retail establishments.

“On the plus side, some of the new professionals who got in during the window were a bit younger with kids,” Pearson said, noting, however, that Laguna’s average age still increased to 48 in 2014 from 43.4 in 2000.

“Clearly our home values ... continue to make it hard for young folks to live here,” Pearson said.

While the city’s overall demographics may have changed in the last two decades, prospective residents still come for the same reason, Pearson said.

“Why did they buy here?” she asked. “Because we have become internationally known, and the wealthy, like everyone here today, are attracted to the environment, uniqueness and lifestyle that is Laguna Beach.”