STAFF REPORT
22 Meeting Date:
August 12, 2025
SUBJECT: CONDITIONAL USE PERMIT 25-1201 AND COASTAL DEVELOPMENT PERMIT 25-1202 FOR A REDUCTION OF ONE REQUIRED OFF-STREET
PARKING SPACE BASED ON THE IMPLEMENTATION OF A PARKING AND
TRANSPORTATION DEMAND MANAGEMENT PLAN PURSUANT TO LAGUNA BEACH MUNICIPAL CODE SECTION 25.52.006(G)(3) FOR AN INFILL HOUSING PROJECT AT 1040 SOUTH COAST HIGHWAY AND FINDING THE
PROJECT CATEGORICALLY EXEMPT PURSUANT TO STATE CEQA
GUIDELINES SECTION 15303 (CLASS 3)
RECOMMENDATION: It is recommended that the City Council:
1. Open the public hearing, including receiving a staff report, take public testimony and all evidence relating to the consideration of Conditional Use Permit 25-1201 and Coastal Development Permit 25-1202; and
2. Adopt the attached Resolution titled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA, APPROVING CONDITIONAL USE PERMIT 25-1201 AND COASTAL DEVELOPMENT PERMIT 25-1202 FOR A REDUCTION OF ONE REQUIRED OFFSTREET PARKING SPACE BASED ON THE IMPLEMENTATION OF A PARKING AND
TRANSPORTATION DEMAND MANAGEMENT PLAN PURSUANT TO LAGUNA BEACH MUNICIPAL CODE SECTION 25.52.006(G)(3) AT 1040 SOUTH COAST HIGHWAY AND FINDING
THE PROJECT CATEGORICALLY EXEMPT PURSUANT TO STATE CEQA GUIDELINES SECTION 15303 (CLASS 3)”.
Appropriation: $0 Fund: N/A
Submitted By: Matthew Scheider Approved:
Matthew Schneider, Director of
Community Development
Dave Kiff, City Manager
SUMMARY OF THE MATTER
The applicant, Anders Lasater, for the property owner (“Applicant”) of 1040 South Coast Highway (“Property”) seeks City Council approval of Conditional Use Permit (“CUP”) 25-1201 and Coastal Development Permit (“CDP”) 25-1202 to reduce the site’s off-street parking requirement by one space, based on a transportation demand management (“TDM”) plan, to facilitate an infill housing project providing four new residential units in accordance with Laguna Beach Municipal Code (“LBMC”) Section
25.52.006(G)(3) (the “Project”). On July 16, 2025, the Planning Commission (“Commission”) held a public hearing and recommended the City Council approve CUP 25-1201 and Coastal CDP 25-1202. City staff recommends that the City Council hold a public hearing on the entitlements and adopt the draft resolution conditionally approving the Project.
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
DISCUSSION
Background
On July 2, 2025, the Commission held a public hearing to consider a request for Design Review 25-1044 and Coastal Development Permit 25-1045 for a new mixed-use structure (major remodel to an existing single-story commercial building with additions exceeding 50%, including upper-level additions to establish four new apartment units) (the “project”). Design review was required for the new structure (major remodel to an existing structure with additions exceeding 50%), elevated decks, remodel of the commercial building façade, landscaping, HVAC equipment, and site improvements including parking lot modifications and trash storage. A coastal development permit was required for development within the coastal zone.
Additionally, pursuant to LBMC Section 25.52.006(G)(3), the Planning Commission was asked to make a recommendation to the City Council on CUP 25-1201 and CDP 25-1202 for a request to reduce the number of required off-street parking spaces based on the implementation of a parking and TDM plan.1 During the Commission’s deliberation, the Commission largely supported the project design, but due to the 21-day staking required for the revised design for the upper-level residential units, the Commission continued the project to July 16, 2025. In addition, the Commission directed the applicant to address design concerns regarding the dark bronze material proposed for the fascia. (The July 2, 2025 Commission staff report, attachments, and public comment are attached as Attachment 3.) On July 16, 2025, the Commission held a public hearing and voted 5-0 to approve Design Review 25-1044 and Coastal Development Permit 25-1045 and a Class 3 (New Construction or Conversion of Small Structures) categorical exemption from the California Environmental Quality Act (“CEQA”) for the aforementioned project, including replacement of the dark bronze color on the fascia and roof material with a lighter color, and recommended City Council approval of Conditional Use Permit 25-1201 and Coastal Development Permit 25-1202 in accordance with LBMC Section 25.52.006(G)(3) to reduce the required off-street parking spaces by one space since the proposed use incorporates innovative parking solutions.
Condition No. 14 of Commission-adopted Resolution No. 25-1044, states that “[a]pproval of DR 25-1044 and CDP 25-1045 is explicitly contingent upon City Council approval of a Conditional Use Permit to reduce the number of required off-street parking spaces based on the implementation of a parking and transportation demand management plan. If the City Council does not approve said parking reductions, this Resolution shall be null and void and of no force or effect. It shall be as if the Resolution had never been adopted.” (The July 16, 2025, Commission Staff Report and Commission-adopted Resolution No. 25-1044 are attached as Attachments 4 and 5, respectively.)
Parking Incentive Request
The applicant has requested CUP 25-1201 and CDP 25-1202 for the Project, or to reduce the site’s parking requirements by one space to facilitate an infill housing project providing four new residential units in accordance with Laguna Beach Municipal Code Section 25.52.006(G)(3). 1 LBMC Section 25.52.006(G)(3) allows parking reductions with the implementation of a parking and TDM plan when a project promotes alternative modes of transportation, and where the reduced parking requirement will not adversely impact public access to beaches, parks, open spaces, and trails. Final project approval by the City Council is required for a reduction in parking standards following a recommendation by the Planning Commission.
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
The proposed reduction of required off-street parking is being requested as the project site is currently developed with a single-story, 2,308-square-foot, commercial building with a six-car surface parking lot on an approximately 5,000-square-foot lot. The existing development limits the applicant’s ability to provide the one additional required on-site parking space. CUP 25-1201 and CDP 25-1202 relating to the Project (i.e., the parking reduction) are the only entitlements before the City Council at this time and deliberation should be focused on such Project only.
Pursuant to LBMC Section 25.52.006(G)(3), the City Council may approve a conditional use permit and coastal development permit, upon recommendation from the appropriate approval authority (i.e., the Commission), to reduce required parking standards when a project promotes the use of alternative transportation, such as ride-sharing, public transit, bicycling, or walking, and where the reduction will not adversely affect public access to beaches, parks, open space, or trails. Any proposed innovative parking solution shall provide parking mitigation measures at an equivalent ratio to the parking spaces required by Section 25.52.012(G) for the proposed intensification of use. The applicant is requesting one parking credit for the proposed commercial use. As demonstrated by Table 1 below, the proposed mixed-use project will satisfy the parking requirement for the proposed uses if the parking requirement is reduced by one space.
Table 1. Parking Requirements
Parking Analysis Square Footage Required Ratio Total Spaces Commercial/Retail 1 space/250 sq. ft. 5 spaces 5 spaces Residential (4 units) 0.5 space/unit 2 spaces 2 spaces
Total Spaces Required 7 spaces
Parking Provided -6 Spaces
TDM Reduction -1 Spaces
Total Required 1 Space
The Project will incorporate TDM strategies to reduce the number of required parking spaces by one space or 14%, from seven to six spaces. To support this request, the Applicant has submitted a Transportation Demand Management study prepared by RK Engineering Group, dated March 28, 2025, for the Project (the “TDM Study” (Attachment 2). The TDM Study has been peer reviewed and supports the request to reduce the required number of parking for the development by one parking space by facilitating access to transit.
The proposed Project will implement the following strategies in the TDM Study to lessen the parking demand and prevent overflow parking for the project:
• Eight (8) secure bicycle lockers (4 on-site & 4 off-site) • Encouraging bike commuting through education
• Local transit information bulletin
• Public transit vouchers
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
Figure 1. Proposed parking layout.
The Project supports alternative transportation through the provision of public transit vouchers, eight bicycle parking spaces (four on-site and four off-site), encouraging bike commuting via education, and local transit information, and is designed to serve local residents and visitors who are likely to walk, bike, or use other low-impact transportation modes. These measures will be the responsibility of the Project's commercial tenants only, as the one space reduction being requested is for the required parking of the commercial/retail use on site. Compliance will be ensured via inclusion of Condition No. 24 in the Resolution.
While the authority to issue parking credits rests with the City Council upon recommendation from the Commission, staff finds that the proposal is consistent with the intent of LBMC Section 25.52.006(G). As demonstrated by the peer-reviewed TDM Study, the implementation of the proposed strategies in the TDM Study will address the one-space parking deficiency.
REQUIRED ENTITLEMENTS
Below is staff’s analysis of the required entitlements for the parking incentive request: (1) CUP 25-1201; and (2) CDP 25-1202.
Conditional Use Permit
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
The reduction of required parking spaces requires the approval of a CUP pursuant to LBMC Section
25.52.006(G). CUPs are governed by LBMC Section 25.05.030 and in this case is considered by the City Council upon recommendation from the Planning Commission at a duly noticed public hearing where the following findings are considered in relation to the proposed development.
Finding No. 1: The site for the proposed use is adequate in size and topography to accommodate said use, and all yards, spaces, walls and fences, parking, loading and landscaping are adequate to properly adjust such use with the land and uses in the vicinity.
The proposed Project involves the implementation of TDM strategies to reduce the Project site’s off-street parking requirement by one space and facilitate an infill housing project providing four new residential units.
The infill housing project is adequately sized to accommodate the development with respect to yards, loading, and landscaping. The four one-bedroom residential units require a total of two parking spaces. A six-stall surface parking lot will be provided at the rear of the site, with the two spaces closest to the building marked or signed to indicate their exclusive use for residents. The remaining four spaces, located closest to the alley, will be available for the commercial use. Although only four of the five spaces required for the commercial use will be provided, the implementation of strategies in the TDM Study will offset the parking shortage by providing secure bicycle lockers on-site and at the Pottery Place parking structure and utilizing TDM strategies to reduce the parking demand, as demonstrated by the peer-reviewed TDM study prepared by RK Engineering Group, dated March 28, 2025 for the Project.
Finding No. 2: The site for the proposed use has access to streets and highways adequate in width and pavement type to carry the quantity and kind of traffic generated by the proposed use.
The Project site will have access to streets and highways to carry the quantity and kind of traffic generated by the proposed use with no significant transportation impact. The proposed Project involves the implementation of TDM strategies to reduce the Project site’s off-street parking requirement by one space and facilitate an infill housing project providing four new residential units that was approved pursuant to CUP 25-1201 and CDP 25- 1202. As such, no new or intensified land uses are proposed, nor does the Project modify the site’s street access.
The commercial use is not proposed to be enlarged or intensified, and the trips generated by the infill housing project’s residential units are estimated at 20-30 per day, per ITE generated rates. According to the Governor’s Land Use and Climate Innovation Technical Advisory on Evaluating Transportation Impacts in CEQA (2018), land use projects, such as the project, “that generate or attract fewer than 110 trips per day generally may be assumed to cause a less-than-significant transportation impact.” While the construction of four residential units would include a small increase in the number of trips relative to existing conditions, operation of this project will not create significant impacts vehicle miles travelled onto the road networks. Furthermore, the implementation of the strategies in the TDM Study as part of the Project will encourage the use of alternative modes of transportation and reduce reliance on single-occupancy vehicles.
Finding No. 3: The proposed use will have no substantial adverse effect upon abutting property.
The proposed Project involves the implementation of TDM strategies to reduce the Project site’s off-street parking requirement by one space and facilitate an infill housing project providing four new residential units that has been approved pursuant to CUP 25-1201 and CDP 25-1202. No new uses are proposed as part of the Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
currently proposed Project. As set forth by Commission-Adopted Resolution No. 25-1044, the approved residential use will have no substantial adverse effect upon abutting property because the residential use is compatible and consistent with existing development in the Project vicinity. The proposed Project’s South Coast Highway-fronting location is an appropriate location for mixed-use development due to the property’s zoning designation, which is intended to be used for a wide range of commercial and residential purposes.
Moreover, a peer-reviewed TDM Study demonstrates that the proposed one-space reduction in the site’s offstreet parking requirements will not create spillover effects because the implementation of the strategies in the TDM Study will lessen the proposed project’s parking demand.
Finding No. 4: The proposed use is consistent with the objectives and policies of the City's General Plan.
The Project involves the implementation of TDM strategies to reduce the Project site’s off-street parking requirement by one space, which will facilitate an infill housing project providing four new residential units that has been approved pursuant to CUP 25-1201 and CDP 25-1202. As indicated below, the Housing Element encourages the expansion of housing opportunities, including expansion of rental housing and infill housing.
The Project facilitates the approved infill housing project that will provide four rental housing units once constructed by allowing a constrained site to meet the City’s off-street parking requirements. For these reasons, the Project is consistent with the objectives and policies of the City’s General Plan.
HE-2.13: Encourage the expansion of rental housing opportunities in the City.
HE-2.17: Foster opportunities for small scale infill development as a means to expand housing opportunities and incrementally provide affordable housing.
HE-3.6: Promote the expansion of housing opportunities throughout the City.
Finding No. 5: The conditions stated in the decision are deemed necessary to protect the public health, safety and general welfare.
The conditions stated in the Resolution for the Project are necessary to protect public health, safety, and general welfare because the conditions imposed provide for such protections to ensure continued land use compatibility. Inclusion of Condition No. 24 will ensure that the strategies in the TDM Study identified by RK Engineering for the Project remain binding for future commercial tenants of the mixed-use building.
Coastal Development Permit
The reduction of required parking spaces also requires the approval of a CDP pursuant to LBMC Section
25.52.006(G). CDPs are governed by LBMC Chapter 25.07 and in this case is considered by the City Council upon recommendation from the Planning Commission at a duly noticed public hearing where the following findings are considered in relation to the proposed development.
Finding No. 1: The project is in conformity with all the applicable provisions of the certified local coastal program, including the following review criteria:
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
1. The proposed development will not encroach upon any existing physical accessway legally utilized by the public or any proposed public accessway identified in the adopted local coastal program land use plan.
The proposed Project and reduction of one required parking space would not encroach upon any existing physical accessway or proposed public accessway in that improvements are limited within the property and no such existing or proposed public accessways are located on or adjacent to the Project site.
2. The proposed development will not adversely affect marine resources, environmentally sensitive areas, or archaeological or paleontological resources.
The proposed Project would not affect marine resources, environmentally sensitive areas, or archaeological or paleontological resources in that no such resources or areas are identified on site or within the immediate Project vicinity. Additionally, no grading is involved with the Project.
3. The proposed development will not adversely affect recreational or visitor-serving facilities or coastal scenic resources.
The proposed Project would not adversely affect recreational or visitor-serving facilities or coastal scenic resources in that no such facilities or resources exist on site and the proposed reduction in required parking requirements would have no effect on any nearby parks or coastal views from South Coast Highway. The implementation of strategies in the TDM Study will encourage the use of alternative modes of transportation and reduce reliance on single-occupancy vehicles. A peer-reviewed TDM Study demonstrates that the proposed one-space reduction in the site’s off-street parking requirements will not create spillover effects because the implementation of the strategies in the TDM Study will lessen the proposed project’s parking demand.
4. The proposed development will be sited and designed to prevent adverse impacts to environmentally sensitive habitats and scenic resources located in adjacent parks and recreation areas, and will provide adequate buffer areas to protect such resources.
The proposed development would have no adverse impacts to environmentally sensitive habitats and scenic resources located in adjacent parks and recreation areas in that no such habitats exist on the Project site and there are no parks or recreation areas adjacent to the Project site.
5. The proposed development will minimize the alterations of natural landforms and will not result in undue risks from geological and erosional forces and/or flood and fire hazards.
The Project site is already developed with an existing building and related improvements; therefore, no additional alterations to natural landforms would occur. No grading is being proposed with the proposed Project. Additionally, the subject property is not located within a Fire Hazard or Flood zone.
6. The proposed development will be visually compatible with the character of surrounding areas, and where feasible, will restore and enhance visual quality in visually degraded areas.
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
The proposed Project will be visually compatible because the Project involves the implementation of TDM strategies to reduce the Project site’s off-street parking requirement by one space, which will facilitate an infill housing project providing four new residential units that has already been approved. The proposed Project itself does not include proposed development.
7. The proposed development will not have any adverse impacts on any known archaeological or paleontological resource.
The proposed Project will not have any adverse impacts on any known archaeological or paleontological resource in that such resources are not known to exist in the Project area, and the Project site is surrounded by established commercial and residential development. No additional grading is being proposed.
8. The proposed development will be provided with adequate utilities, access roads, drainage and other necessary facilities.
The Project site is developed with an existing commercial building and is equipped with utilities, access roads, drainage, and other necessary facilities that will continue to adequately serve the on-site uses.
9. Other public services, including, but not limited to, solid waste and public roadway capacity have been considered and are adequate to serve the proposed development.
The Project site is developed with an existing commercial building with the necessary and adequate public services already available. The Project involves the implementation of TDM strategies for an approved infill housing project, and as such the Project would not necessitate the provision of additional services.
Finding No. 2: Any development located between the sea and the first public road paralleling the sea is in conformity with the certified local coastal program and with the public access and public recreation policies of Chapter 3 of the Coastal Act.
The Project is not located between the sea and the first public road paralleling the sea, and, therefore, will not conflict with the public access and recreation policies of Chapter 3 of the Coastal Act. Furthermore, as detailed above in the facts supporting Finding Number 1, the proposed Project is in conformity with the certified local coastal program.
Finding No. 3: The proposed development will not have any significant adverse impacts on the environment within the meaning of the California Environmental Quality Act.
As discussed further herein, the proposed Project will not cause any significant adverse impact on the environment and qualifies for a categorical exemption pursuant to the California Environmental Quality Act Guidelines Section 15303 (New Construction or Conversion of Small Structures).
ALIGNMENT WITH CITY COUNCIL GOALS & PRIORITIES
This item supports the City Council’s adopted goals and priorities, specifically the economic development initiative aimed at reducing commercial vacancies and strengthening the local business environment.
Request for Parking Reduction Incentive – 1040 South Coast Highway August 12, 2025
In addition, the proposal promotes multi-modal access to the site through bicycle parking, which aligns with the City’s sustainability goals to reduce reliance on single-occupancy vehicles and encourage environmentally responsible transportation options.
FINANCIAL ANALYSIS
There is no fiscal impact associated with the recommended action.
ENVIRONMENTAL ANALYSIS
The Project for the parking reduction is part of the broader project approved by the Planning Commission on July 16, 2025. Thus, the recommended action is categorically exempt from CEQA pursuant to Section 15303 (New Construction or Conversion of Small Structures) for the same reasons set forth in the CEQA Notice of Exemption (“NOE”) that was filed within five working days of the July 16, 2025 Planning Commission approval. The City did not receive any appeal of the Planning Commission’s approval within fourteen days of such approval and therefore such approval became final. There have been no changes to the project, no changed circumstances, and no new information that could not previously have been known that would trigger the need for subsequent CEQA review.
ATTACHMENTS
1. Resolution (Pgs. X-X)
2. Transportation Demand Management (TDM) Study, dated March 28, 2025 (Pgs. X-X)
3. 7/2/25 Planning Commission Staff Report, Attachments, and Public Comment
4. 7/16/25 Planning Commission Staff Report, Resolution, and Attachments (Pgs. X-X)
5. Commission-Adopted Resolution No. 25-1044
6. City Council Public Hearing Notice
Report Prepared By: Coordinated With:
Shaveta Sharma, Senior Planner Jane Abzug, Assistant City Attorney Anthony Viera, Planning Manager