Attach 1 - Resolution - 238 Chiquita Street — Laguna Beach City Council, May 13, 2026

RESOLUTION NO. 26.XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LAGUNA BEACH, CALIFORNIA, DENYING THE APPEAL
AND SUSTAINING THE DESIGN REVIEW BOARD’S DENIAL
OF COASTAL DEVELOPMENT PERMIT 2026-0148 FOR A
DETACHED ACCESSORY DWELLING UNIT IN THE R-2,

RESIDENTIAL MEDIUM DENSITY ZONE, AND

DETERMINING THAT THE CALIFORNIA ENVIRONMENTAL

QUALITY ACT DOES NOT APPLY TO PROJECTS THAT ARE

DISAPPROVED
WHEREAS, Jonathan Lukoff (“Applicant”), for 238 Chiquita Street (the “Property”) applied for Coastal Development Permit (“CDP”) 2026-0148 for a detached accessory dwelling unit (“ADU”) with excess building site coverage (the “Project”); and WHEREAS, on February 23, 2026, the Heritage Committee (“Committee”) held a public meeting to consider the Project and provide a recommendation to the Design Review Board (“Board”). Following discussion, the Committee voted 5-0 to recommend that the Board deny the Project based on incompatibility with the Secretary of the Interior’s Standards for the Treatment of Historic Properties (“SOIS”) and a conflict with Section 3b of the Applicant’s Mills Act contract with the City; and
WHEREAS, on February 26, 2026, the Board held a duly noticed public hearing to consider the Project. During the hearing, the Board evaluated the proposed design and received public testimony, which focused primarily on view impacts, neighborhood compatibility, and SOIS compliance. Following discussion, the Board voted 4-0 (Bauta absent) to direct staff to revise the draft resolution presented with the staff report to reflect the additional reasons stated by the Board in support of the Project denial, and continued the public hearing to March 12, 2026; and WHEREAS, on March 12, 2026, the Board reviewed the revised Resolution to deny Coastal Development Permit 2026-0148. After considering all evidence and public testimony, the Attachment 1
51 -2- Reso. #26.XXX
Board found that the draft resolution attached to the staff report accurately and completely incorporated the Board’s direction from the prior hearing and voted 3-0 (Bauta abstaining and Coveny absent) to adopt Resolution No. 2026-0148 to deny the Project (the “Board Denial”); and WHEREAS, on March 18, 2026, Edwin Keseil (the “Appellant”), the attorney representing the Applicant, filed a notice of appeal of the Board Approval (the “Appeal”). The Appellant contends that the Board denied the project on erroneous factual findings, citing eight contentions; and
WHEREAS, LBMC Section 25.05.070 requires certain forms of public notice for an appeal. Public notice was duly provided to consider the Appeal of the Project at the May 13, 2026 City Council meeting in accordance with LBMC Section 25.05.065; and WHEREAS, on May 13, 2026, the City Council held a duly noticed public hearing to consider the Appeal and carefully considered the oral and documentary evidence and arguments presented.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES RESOLVE:

SECTION 1. The recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

SECTION 2. The City Council hereby makes the following findings in response to grounds for appeal stated in Appellants’ notice of Appeal:

1. “Neighborhood Compatibility Finding: The factual findings of the resolution regarding the neighborhood compatibility finding are flawed because they are woefully incomplete.

The compatibility finding states, “Here, many of the homes along Chiquita are single-story 52 -3- Reso. #26.XXX
structures (including 248 Chiquita St. directly to the north and 239 Chiquita St., directly across the street) or appear as a single-story from the street. A two-story ADU in front of a two-story home would not maintain this neighborhood development pattern.” This conclusory analysis fails to note that there are two-story homes and two-story ADUs within the Hillcrest neighborhood. Additionally, from review of GIS map, which was shown by City staff during the hearing, there appear to be many other R-2 zoned lots in the vicinity developed with multiple units. This property is near 1673 Louise Street, where the City approved a second-story ADU. For the 1673 Louise Street approval, which is in the same Hillcrest neighborhood, the City made that a finding for a second-story ADU was met because the surrounding areas “consist of both one-story and two-story homes” (CDP 25- 0036). Additionally, as was presented to the Design Review Board, there is a mix of oneand two-story homes in the Hillcrest neighborhood of North Laguna, including apartment buildings with up to four units, which is evident during any site visit. Finally, the City’s consultant report provided by HRG concluded that “the proposed ADU will be a compatible design and differentiated from the existing residence, that it will not impact the setting of the neighborhood because it will retain the required setback, and that it will be a stand-alone structure and not physically impact the existing residence” (emphasis added). The DRB chose to ignore the findings of the City’s own consultant that did not suit the City’s findings, demonstrating an unreasonable decision and abuse of discretion.

City Council’s Response
The Appellant asserts that the Board’s neighborhood compatibility finding is incomplete because the broader Hillcrest neighborhood includes a mix of one- and two-story homes, some 53 -4- Reso. #26.XXX
multi-unit development, and at least one recently approved second-story ADU. The Appellant further contends that the Board disregarded a statement in the HRG analysis indicating that the proposed ADU would be a compatible design that would not impact the setting of the neighborhood. However, these recommendations and overall topic were addressed head on and discussed in substance by the Board during its deliberations.

The Board found that the Project did not comply with CDP Review Criteria No. 6 (LBMC Section 25.07.012(F)(6)), which requires that development “will be visually compatible with the character of surrounding areas, and where feasible, will restore and enhance visual quality in visually degraded areas,” as follows (from Board-adopted Resolution No. 2026-0148):
“Here, many of the homes along Chiquita are single-story structures (including 248 Chiquita St. directly to the north and 239 Chiquita St., directly across the street) or appear as a single-story from the street. A two-story ADU in front of a two-story home would not maintain this neighborhood development pattern.

Due to the historic home’s placement on the City’s Historic Register, the home itself is also considered a coastal resource. The City’s historic consultant has determined in the HRG Report and Supplemental HRG Report that the size of the ADU and its placement on the site would cause it to block views of the historic home. The Project does not preserve the historic integrity of the existing single-family residence. HRG reviewed the Project and determined it did not comply with the Secretary of Interior Standards ‘because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively impacting the spatial relationship that characterizes the property.’”
54 -5- Reso. #26.XXX
The record does not support the conclusion that the Board’s neighborhood compatibility finding is erroneous or unsupported. The issue before the Board was not whether two-story structures exist somewhere within the broader Hillcrest neighborhood, nor whether other R-2 properties in North Laguna contain multiple units. Rather, the required inquiry under Coastal Development Permit Criterion 6 was whether the proposed development, as designed and sited on this specific property, would be visually compatible with the character of the surrounding area.

That is a site-specific determination that turns on the relationship of the proposed ADU to the existing historic residence, the street frontage, and the immediately surrounding development pattern.

Here, the Board reasonably focused on the relevant portion of Chiquita Street and the immediate context of the subject Property. The record reflects that the existing historic residence is set well back from the street and that the front portion of the lot has historically remained open, without structures. The proposed Project would place a new, two-story structure between the street and the historic residence, approximately 3 feet from the front porch and approximately 9 feet 8 inches from the front façade of the existing home. As analyzed in the staff report and discussed during the public hearing, the proposed ADU would span approximately 31 feet in width, exceeding the width of the primary façade of the historic residence, and would obscure a substantial portion of the residence when viewed from the public right-of-way. In that respect, the Board’s finding was not based simply on the fact that the ADU is two stories tall; it was based on the combined effect of the ADU’s height, width, massing, and siting in front of a designated historic residence on a lot with an established open front setback pattern. 55 -6- Reso. #26.XXX
The Appellant’s reference to other two-story homes, apartment buildings, and second-story ADUs in the Hillcrest neighborhood does not establish that the Board’s finding was incomplete.

A neighborhood may contain a range of development types while still supporting a finding that a particular Project is visually incompatible in its specific context. The presence of other two-story development in the broader area does not compel a conclusion that any new two-story structure is compatible regardless of siting, relationship to the street, or effect on a historic resource. The Board was entitled to distinguish between development located elsewhere in the neighborhood and the proposed placement of a new detached two-story ADU in front of the subject property’s historic residence and its relation to the surrounding areas. Addressing this finding is not a matter of simply searching neighborhood-wide for other properties that may have second-story ADUs; instead a site-specific analysis based on the whole of the record is more appropriate Similarly, the Appellant’s reliance on the City’s approval of another ADU at 1673 Louise Street is unpersuasive. That approval involved a different property, different lot conditions, different surrounding context, and a different project design. Land use determinations are inherently parcel-specific. The fact that the City was able to make compatibility findings for a second-story ADU on another site does not establish that the same finding must be made here.

The Board was required to evaluate this Project based on the actual conditions at 238 Chiquita Street, including its Mills Act status, the location of the historic residence, the historic open front yard condition, and the visual relationship of the proposed ADU to the surrounding portion of Chiquita Street.

The Appellant’s argument also overstates the significance of one statement in the HRG analysis. HRG’s review was directed primarily to compliance with the SOIS and the effect of the 56 -7- Reso. #26.XXX
proposed ADU on the historic resource. Even if one sentence in the report suggests that the ADU would be differentiated from the existing residence or would not physically attach to it, the report as a whole does not support the Appellant’s position. To the contrary, HRG’s ultimate conclusion was that the Project does not comply with the applicable standards because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively affecting the spatial relationship that characterizes the property.

The Board was entitled to read the consultant’s analysis as a whole and rely on its ultimate conclusions rather than isolate a single statement divorced from the report’s overall findings.

More fundamentally, neighborhood compatibility under CDP Review Criterion 6 (LBMC Section 25.07.012(F)) is not delegated to HRG. HRG’s role was to evaluate the Project’s effect on the historic resource. The ultimate determination regarding visual compatibility with the surrounding area was for the Board to make based on the full administrative record, including the staff report, plans, photographs, public testimony, site visits, and its own observations of the neighborhood context. The Board expressly did so. Chair Gibbs stated that he walked the area and found the relevant visual context to be middle and lower Chiquita, where the proposed ADU would be visually prominent and inconsistent with the established streetscape. Other Board members concurred with that conclusion. That determination falls squarely within the Board’s discretion.

The record also supports the Board’s determination that the Project would not maintain neighborhood development patterns. As set forth in both the staff report and Resolution No. 2026- 0148, the proposed Project would exceed maximum allowable building site coverage, and the Municipal Code allows modification of that standard only where necessary to preserve views or 57 -8- Reso. #26.XXX
maintain neighborhood development patterns. The Board found that the Project does neither.

Thus, the neighborhood compatibility issue was not only relevant to CDP Review Criterion 6, but also directly related to the separate finding required to justify excess building site coverage. The Board’s conclusions on these points are internally consistent and supported by the same body of evidence. Additionally, while the Applicant refused to stake the Project, the Board’s findings are clearly supported by the Project plans, which depict a detached ADU at the front yard setback with a vertical, two-story appearance and a general lack of modulation of the building mass, with both the first and second floors stacked near the setback line along Chiquita Street.

Finally, the Appellant characterizes the Board’s finding as “woefully incomplete,” but the record demonstrates the opposite. The issue of neighborhood compatibility was the subject of staff analysis, public testimony, expert input, and Board deliberation. Nearby property owners raised concerns regarding the Project’s scale, massing, and effect on the streetscape. The HRG representative testified that the proposed placement would negatively affect the relationship of the property to the street and surrounding neighborhood. The Heritage Committee recommended denial, in part based on mass, scale, and neighborhood compatibility. The Board then discussed the visual character of the area and concluded that the proposed ADU would not be compatible with the surrounding development pattern. That is precisely the type of evidence-based, discretionary determination the Board is charged with making.

Accordingly, the City Council finds that the Design Review Board did not ignore relevant evidence, misstate the neighborhood context, or abuse its discretion in making the neighborhood compatibility finding. Rather, the Board evaluated the Project in its actual physical and historic setting and reasonably concluded, based on substantial evidence in the record, that the proposed 58 -9- Reso. #26.XXX
ADU would not be visually compatible with the character of the surrounding area and would not maintain neighborhood development patterns.

2. “Misplaced Reliance on Erroneous City-Procured Consultant Report: It is clear that the DRB based its findings on errors contained in the City-procured HRG consultant reports.

The earlier 2023 Sapphos report found that a two-story ADU project was consistent with Secretary of the Interior Standards for historic preservation. That report analyzed a larger structure than what was considered by the DRB. A core factual inconsistency between the reports, leading to the divergent conclusions, is that the Sapphos report states that the significant characteristics of the home are the upper story windows and cross-gabled roof… Mr. Lukoff’s belief is that the historically significant features of the property as he understood it were the upper story windows and cross-gable roof. This is consistent with Sapphos’ opinion. Mr. Lukoff’s position is also grounded in a 2013 historical report for the property, contained in City records, that the City of Laguna Beach relied on for a prior addition to Mr. Lukoff’s property. The GPA report found that on the front façade of the property, the pergola, first floor window, porch, and main entry door “are non-character defining.” On the other hand, the City’s consultant incorrectly asserts that Mr. Lukoff’s entire front façade is historical, including the 1960s or later modifications made to the front entry. As Mr. Lukoff stated at the DRB hearing, during prior discussions of Mills Act rehabilitation projects, the City had asked Mr. Lukoff to modify front entry door, first-floor picture window, porch, and pergola to make them more historically compatible. This provides further evidence of the City’s understanding that these are not historically significant features. Starting from a faulty understanding of the historically significant 59 -10- Reso. #26.XXX
characteristics of the property leads to faulty analysis and conclusions regarding potential compliance with Secretary of Interior Standards. The through line for the historic reports is that the significant features of the property are the upper story windows and cross-gable roof. Mr. Lukoff’s design preserves way more than 50% of the views of these significant features, meeting the Secretary of the Interior Standards. Also, in terms of discussing Mills Act requirements, it is important to consider the contract terms as they were at the time the contract was commenced and not 17 years later. See, e.g., King v. Dep’t of Navy, 130 F.3d 1031, 1033 (Fed. Cir, 1997). This includes Mr. Lukoff’s obligations regarding preservation of the significant features of the historic residence. Extrinsic evidence is available to aid in contract interpretation when contract terms may be ambiguous. See, e.g., Beta Sys. v.

U.S., 838 F.2d 1179, 1183 (Fed. Cir. 1988). In that vein, the 2013 GPA report, finding that the “[t]he extant pergola, front first floor window, porch, and main entry door are noncharacter defining” is more contemporaneous to the Mills Act transaction than the Cityprocured 2023 HRG report, and the 2013 GPA report is thus more reliable for interpretation of the Mills Act contract. From a factual standpoint, the DRB’s decision rests on erroneous analysis from HRG and ignores precedent from the 2013 report available in City records and dismissing the Sapphos report, which found that a (larger) two-story ADU project was consistent with the Secretary of the Interior Standards for historic preservation.”
City Council’s Response
The Appellant asserts that the Board improperly relied on the HRG reports, which allegedly contain factual errors and are inconsistent with prior historic analyses, including the 2013 GPA 60 -11- Reso. #26.XXX
report and the 2023 Sapphos report. The Appellant further contends that HRG incorrectly identified the historically significant features of the residence and that this alleged error undermines the Board’s findings regarding compliance with the SOIS and the Mills Act contract.

The Board found that the Project did not comply with the following applicable provisions of the Certified LCP and the Historic Resources Element.

Here, the Project does not preserve the historic integrity of the existing singlefamily residence. The property owner has received a significant incentive in the form of a reduced property tax rate as a result of their participation in the Mills Act program. A condition of this incentive is compliance with the Secretary of Interior Standards. HRG reviewed the Project and determined it did not comply with the SOIS “because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively impacting the spatial relationship that characterizes the property.”
General Plan Historic Resources Element - Goal #1: Preserve and enhance buildings and structures of historic significance in Laguna Beach. Assure that neighborhoods which have a preponderance of older homes and which greatly contribute to the village atmosphere be maintained as cohesive neighborhood units through consistency of size, scale and character.

Here, the Project does not preserve the historic integrity of the existing single61 -12- Reso. #26.XXX
family residence. The property owner has received a significant incentive in the form of a reduced property tax rate as a result of their participation in the Mills Act program. A condition of this incentive is compliance with the Secretary of Interior Standards. HRG reviewed the Project and determined it did not comply with the SOIS “because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively impacting the spatial relationship that characterizes the property.”
Open Space and Conservation Element Policy 12-C: Development adjacent to a place, structure or feature found to be of historical significance shall be designed so that the uses permitted and the architectural design will protect the visual setting of the historical site.

Here, the proposed ADU would not protect the visual setting of the historical site in that it would be placed in front of the existing residence, altering the spatial relationship that characterizes the property. The existing residence was constructed at the rear of the parcel and has approximately a 50-foot setback from the street. Placing the ADU within the setback will remove a space that has been historically open since the residence was constructed in 1925. In addition, because the ADU will be located 10 feet from the existing residence it will obscure a majority of the view of the residence from the street.

LBMC Chapter 25.45.010 Procedures for alteration of a historic resource: “Prior to the issuance of a building permit to remodel or alter any historic resource, City staff shall review the proposed changes to determine if the proposal is consistent with the design review criteria, the Secretary of the Interior’s Standards (SOIS) or the City’s Local Design 62 -13- Reso. #26.XXX
Guidelines.”
Here, HRG evaluated the Project and determined in the HRG Report and Supplemental HRG Report the proposed Project did not comply with the Secretary of Interior Standards.”
The record does not support the conclusion that the Board’s reliance on the HRG reports was misplaced or erroneous. To the contrary, the Board considered multiple historic evaluations, including the Sapphos report, the HRG peer review, and HRG’s updated memorandum, and exercised its discretion in weighing those materials alongside the applicable regulatory framework.

First, the existence of differing professional opinions between qualified historic consultants does not render one report “erroneous” or invalidate the Board’s reliance on one analysis over another. It is not uncommon in historic preservation matters for consultants to reach different conclusions regarding the application of the SOIS, particularly where the analysis involves qualitative considerations such as spatial relationships, setting, and visibility of a historic resource.

The Board, as the decision-making body, is charged with evaluating conflicting evidence and determining which analysis is more persuasive based on the entirety of the record – not disregarding one report in favor of the other. Here, this is exactly what the Board did. After careful deliberations it reasonably found HRG’s analysis to be more consistent with the applicable standards and the specific conditions of the site.

Second, the Appellant’s argument improperly narrows the scope of historic analysis to a limited set of individual architectural features, such as upper-story windows and the cross-gabled roof, while minimizing the importance of broader contextual and spatial characteristics that are expressly protected under the SOIS. The Secretary of the Interior’s Standards do not limit 63 -14- Reso. #26.XXX
preservation to isolated architectural elements; rather, they require that new construction be compatible with the historic property’s setting, massing, scale, and spatial relationships. Standard 2 requires that the historic character of a property be retained and preserved, including the property’s distinctive materials, features, spaces, and spatial relationships. Standard 9 further requires that new additions and adjacent construction not destroy historic materials or alter spatial relationships that characterize the property.

HRG’s analysis addressed these broader considerations, concluding that the proposed ADU’s location in front of the historic residence, in close proximity to the primary façade, would impair the spatial relationship between the residence and the street and obscure the historic resource from the public right-of-way. These conclusions are independent of whether certain individual elements of the front façade may have been modified in the mid-20th century. Even assuming, as the Appellant argues, that certain features such as the porch or entry elements are not character-defining, the overall spatial configuration of the residence—set back from the street with an open front yard—is itself a defining characteristic of the property. The Board was entitled to rely on HRG’s conclusion that this spatial relationship would be materially altered by the proposed ADU.

Third, the Appellant’s reliance on the 2013 GPA report is misplaced. That report was prepared in connection with a prior project involving alterations to the existing residence and addressed a different scope of work. While it may have identified certain elements of the front façade as non-character-defining for purposes of that project, it does not follow that the entire front yard area or the visual relationship between the residence and the street is non-historic or may be disregarded in evaluating new construction. Historic resource analysis is context-specific, and the 64 -15- Reso. #26.XXX
question before the Board was not whether individual façade elements are historic, but whether the placement of a new structure would adversely affect the integrity of the historic resource as a whole.

Similarly, the Sapphos report evaluated an earlier iteration of the project and reached a different conclusion regarding SOIS compliance. However, as noted in the staff report and confirmed by HRG’s peer review and updated memorandum, the proposed design before the Board differs in siting and configuration, and HRG concluded that the current proposal does not comply with Standards 2, 4, and 9. The Board was not required to adopt the conclusions of the Sapphos report, particularly where another qualified consultant provided a reasoned analysis reaching the opposite conclusion. The Board’s role is to weigh the evidence, not to defer to a single consultant selected by the Applicant.

Fourth, the Appellant’s argument that the Project preserves “more than 50%” of views of certain features does not establish compliance with the SOIS. The SOIS do not establish a quantitative threshold for visibility, nor do they permit partial obstruction of a historic resource based on a percentage calculation. The relevant inquiry is whether the proposed new construction would impair the ability to perceive and understand the historic resource and its relationship to its setting. Substantial evidence in the record, including the HRG reports, staff analysis, and Board observations, supports the conclusion that the proposed ADU would obscure a majority of the primary elevation of the residence and materially alter its spatial relationship to the street. The Board did not find that maintaining a view of the residence’s roofline and a portion of its second floor met the applicable criteria under SOIS. The Board found that the Project substantially impaired the view of the primary façade of the historic resource. 65 -16- Reso. #26.XXX
Fifth, with respect to the Mills Act, the Appellant asserts that the contract should be interpreted based on the understanding of significant features at the time of execution in 2009.

However, the Mills Act contract requires the continued preservation and maintenance of the historic resource in accordance with applicable standards, including the SOIS, which are applied at the time of review of proposed alterations. The contract does not freeze the scope of review to a prior consultant’s interpretation, nor does it limit the City’s ability to evaluate new construction adjacent to the resource under current preservation standards or a Project-specific review by a qualified architectural historian. The Board appropriately considered the Mills Act obligations in conjunction with the SOIS and the City’s historic preservation policies and standards.

Finally, the administrative record demonstrates that the Board did not ignore the Sapphos report or other prior analyses. Rather, those materials were included in the agenda packet, acknowledged by staff, and considered as part of the overall evidentiary record. The Board ultimately found HRG’s conclusions more persuasive, particularly with respect to the impact of the proposed ADU on the spatial relationship and visibility of the historic residence. This constitutes a permissible exercise of discretion and does not amount to an abuse of discretion.

Accordingly, the City Council finds that the Board’s reliance on the HRG reports was appropriate and supported by substantial evidence. The presence of differing consultant opinions does not invalidate the Board’s findings, and the record supports the conclusion that the proposed Project does not comply with the SOIS or the requirements applicable to a designated historic resource under the Mills Act and the City’s Local Coastal Program.

3. “Application Deemed Complete by Operation of Law: We recognize that when the DRB made its decision, it stated that it was treating the application as if it was complete under 66 -17- Reso. #26.XXX
the Permit Streamlining Act. However, to the extent that the DRB made its decision based on an allegedly “incomplete” application as stated in the staff report, Mr. Lukoff disputes the City Staff’s assertion that the application is “incomplete” and asserts that his application is deemed complete by operation of law under the Permit Streamlining Act.

Pursuant to Gov. Code § 65943, for a government agency to deem a development application incomplete, the list of incomplete items “shall be limited to those items actually required on the lead agency’s submittal requirement checklist.” When Mr. Lukoff’s architect submitted the application on November 8, 2024, it is Mr. Lukoff’s position that the City did not request a certified staking plan in its checklist for the application, which is why Mr. Lukoff has not provided staking for the project. In the November 2024 timeframe, staking plans were not a City-mandated ADU application requirement but is instead a more recent demand. Previously, the approach was that only projects requiring Design Review needed a certified staking plan. Additionally, the City was holding Mr.

Lukoff’s application as “incomplete” to extort peer review fees for consultant reports that had been obtained prior to the submission of the application to conduct a regulatory taking.

In order to more fully develop this argument, we are awaiting the results of Public Records Act requests 2026-0149 and 2026-0150. Indeed, with regards to Mr. Lukoff’s ADU application, there was constant turnover of staff assigned to the project, each of whom made different demands, to which Mr. Lukoff responded by submitting revised plans for a smaller structure. City Staff consistently moved the goalposts and made demands that are not permitted under Gov. Code § 65943, which applies to ministerially handled projects.

The City’s processing of Mr. Lukoff’s ADU application for a hearing of the Design Review 67 -18- Reso. #26.XXX
Board also shows an indication that the City indeed treated Mr. Lukoff’s application as complete; otherwise, the City would have simply refused to process it. Based on these factual errors in the Resolution and underlying analysis for the DRB’s decision, the DRB resolution to deny Mr. Lukoff’s project application is unreasonable, invalid, and constitutes an abuse of discretion.”
City Council’s Response
The Appellant asserts that the application was deemed complete by operation of law under the Permit Streamlining Act (“PSA”) and that the City improperly characterized the application as incomplete by requesting materials not included in the submittal checklist. The Appellant further contends that the City “moved the goalposts,” improperly required additional materials such as staking plans, and used the incompleteness determination to delay processing and impose additional consultant review.

The record does not support these assertions, and, more importantly, the issue of application completeness was not the basis for the Board’s denial of the Project.

As a threshold matter, the Board expressly clarified on the record that it was evaluating the Project on the merits and not relying on application completeness as a basis for its decision. As stated during the February 26, 2026 hearing, the City maintained its position regarding completeness (or rather, the application’s incompleteness); however, in light of the Applicant’s insistence that the City approve his application without any further changes, staff elected to bring the Project forward for a public hearing to ensure that the application was reviewed substantively.

The Board confirmed that it would “evaluate this project as if the application was complete,” and the denial was based entirely on the Project’s failure to meet required findings under the CDP 68 -19- Reso. #26.XXX
criteria, the LCP, building site coverage provisions, and the SOIS. Accordingly, even if there were a dispute regarding completeness under the PSA, it would not affect the validity of the Board’s decision, which rests on independent substantive grounds.

With respect to the Permit Streamlining Act, Government Code Section 65943 requires that a local agency identify incomplete items based on its submittal requirements. The City maintains established application requirements for Coastal Development Permits and projects involving historic resources, which may include technical materials necessary to evaluate visual impacts, site conditions, and compliance with applicable standards. The Appellant’s assertion that certain materials were not historically required or were newly requested does not establish a violation of the PSA, particularly where the Project involves a combination of factors—coastal permitting, historic resource considerations, and site-specific visual impacts—that necessitate adequate documentation for proper review.

Additionally, the Appellant’s characterization of the City’s request for additional information as improper or coercive is not supported by the record. The City’s use of peer review consultants, including HRG, is a standard and widely accepted practice for projects involving historic resources, and is also the City’s standard practice. Such review ensures that the City has sufficient technical expertise to evaluate compliance with preservation standards and does not constitute an improper or unlawful requirement. Indeed, the City does not have a qualified architectural historian on staff.1 The Appellant voluntarily proceeded with the application knowing 1 The City does not have staff that meet the Secretary of the Interior’s Professional Qualification Standards as defined in 36 CFR, Part 61. As such, the City regularly retains qualified architectural historians to perform historic assessments. In those cases where an applicant commissions the preparation of a historic assessment, it is not solely City staff that reviews and verifies the information. For the same reason as above, the City will retain a qualified architectural historian to peer review the information and make a professional recommendation to City staff and 69 -20- Reso. #26.XXX
that the Project would be subject to review under the LCP and the City’s historic preservation regulations.

The Appellant also suggests that staff turnover and evolving feedback resulted in inconsistent or shifting requirements. While staff assignments may change over the course of a multi-year application, the underlying regulatory framework did not change. The Project remained subject to the same applicable standards, including CDP findings, building site coverage limitations, and the requirements associated with a Mills Act-designated historic resource. The submission of revised plans in response to staff feedback is a typical part of the development review process and does not indicate that the City imposed unlawful or inconsistent requirements.

The ADU design that was submitted November 8, 2024 was reviewed by a previous planner, who issued comments on December 6, 2024. A staking plan was also requested during this review, in that case due to the design’s inclusion of an elevated deck. Decks elevated more than three feet above the adjacent grade require design review, whether they are associated with primary dwellings or ADUs.

The Applicant has dealt with the same planner and same set of applicable zoning regulations since the last major design change proposed by the Applicant on July 2, 2025.2 The
current planner deemed this design’s application incomplete and indicated that a staking plan was required on August 1, 2025. When the Applicant resubmitted, a staking plan was not provided, and as such, the City was unable to deem the application complete. In this case, a staking plan was ultimately, to the decision-making authority. This process is no different than for other technical disciplines, including but not limited to biology, hydrology, traffic engineering, and geotechnical. 2 On July 2, 2025, new plans were submitted by the Applicant’s new designer for the Project, Bill Dickey. This iteration of the project was a significant departure from the prior design, with changes including the removal of the elevated deck from the scope and the addition of a replacement carport. 70 -21- Reso. #26.XXX
requested due to the proposed excess building site coverage and the potential for public coastal view impacts.

Finally, the Appellant’s argument that the City’s decision to process the application through a Board hearing demonstrates that the application must have been complete is incorrect.

The City explicitly stated that it was proceeding with a merits-based review to avoid potential procedural complications related to statutory timelines, not because it had conceded completeness.

Processing an application for public hearing under these circumstances does not waive the City’s position regarding completeness nor does it establish a violation of the PSA.

In sum, the Board did not deny the Project on the basis of an incomplete application. The Board considered the Project as if complete and denied it based on its failure to satisfy required findings under applicable law. Because the Applicant was unwilling to address the outstanding staff corrections or abandon the Project, it was appropriate for City staff to schedule the Project for a public hearing to evaluate the Application and reach a decision on the entitlements required by the Project. Therefore, any dispute regarding application completeness under the Permit Streamlining Act does not undermine the validity of the Board’s decision and does not constitute an abuse of discretion.

4. “Failure to Apply Significance Standard for Potential Public View Impacts: There is no adverse impact to coastal resources by Mr. Lukoff’s proposed project. First, the level of impact to find a significant adverse effect is not met. Second, the DRB’s analysis and Resolution 2026-0148 erroneously conflates a historic property with coastal resources.

Regarding the standard of adverse effect, both case law and recent Coastal Commission appeals, applied a significance standard. For adverse impact to apply, there must be 71 -22- Reso. #26.XXX
significant impact to coastal resources. Pub. Res. Code § 30250(a); LT-WR v. California Coastal Commission (2007), 152 Cal.App.4th 770, 797-99 (evaluating adverse impacts according to a significance standard). See, e.g., Appeal No. A-6-PEN-23-0053 (not significant adverse impact when project blocked “fleeting” views from public roadway); Appeal No. A-6-DMR-22-0034 (found that an obstructed view from a certain point does not constitute substantial view impact because the view is unobstructed once the individual moves along); City of Laguna Beach Coastal Development Permit 2025-0036 (finding lack of significant adverse effect when one can walk five yards away and see the protected ridgeline). In the case of the proposed action, while there would be minor view blockage of a peripheral view if a person is standing in a particular spot on Chiquita Street, there would be no view blockage a few steps further up the street. Also, Chiquita Street is a residential street and not an arterial road or one of the protected main view corridors of Coast Highway or Laguna Canyon Road under the City’s Open Space and Conservation Element of the LCP. There is no stoplight at the intersection of Chiquita Street on Coast Highway. Members of the public are not likely to be using Chiquita Street except for visiting the homes on this street. Also, the primary view from the public street is down Chiquita Street, which opens onto Crescent Bay, and not across Mr. Lukoff’s property.

Taking the DRB’s decision, that Mr. Lukoff’s proposed ADU creates an adverse effect because of slight public view curtailment, would preclude most development in Laguna Beach, making it impossible for the City to meet its housing obligations under the Housing Accountability Act and Housing Element. If Mr. Lukoff’s project were ineligible for a CDP based on public view impacts, it would be difficult in many ways to allow development in 72 -23- Reso. #26.XXX
this City at all. Thus, the DRB’s action is legally insufficient because it failed to apply the required analysis under the Coastal Act, which would have resulted in a different conclusion.”
City Council’s Response
The Appellant asserts that the Board failed to apply a legally required “significance” threshold in evaluating impacts to coastal scenic resources and that any potential view obstruction associated with the Project is minor, localized, and therefore insufficient to support denial of a CDP application. The Appellant further argues that applying the Board’s reasoning regarding “minor” coastal view blockage broadly would preclude most development within the City.

The Board found that the Project did not comply with CDP Review Criteria No. 3 (LBMC Section 25.07.012(F)(3)), which requires that development “will not adversely affect recreational or visitor-serving facilities or coastal scenic resources,” as follows (from Board-adopted Resolution No. 2026-0148):
“There are no recreational or visitor-serving facilities within 0.25 mile of the Project site. The Project site is in a developed residential area of the City. Therefore, the Project will not adversely affect recreational or visitor-serving facilities.

The proposed development will, however, adversely affect coastal scenic resources.

The City’s Land Use Plan has policies for visual and scenic resources. The City identifies that the principal focus concerns property situated adjacent to the major transportation systems in the City (i.e., Laguna Canyon Road and Pacific Coast Highway) since it is along those roadways that a majority of residents and non-residents view the community and 73 -24- Reso. #26.XXX
have visual access to scenic corridors.3
The Open Space and Conservation Element, which is part of the City’s certified LCP, defines visual resources, including coastal visual resources or “coastal scenic resources” as shoreline features or the natural appearance of the coast, and hillside visual resources as undeveloped hillside lands:

Coastal Visual Resources: With few exceptions, such as Main Beach Park, the City's 4.2 miles of shoreline is characterized by prominent headlands, pocket beaches or coves, wave-cut cliffs, and associated sea arches, caves and blow-holes. These shoreline features are largely a product of erosional forces that have shaped and formed their particular characteristics over centuries of time. Some of these features are more susceptible to erosion than others by virtue of their geologic formation and exposure to erosional elements, which contribute to and enhance the natural appearance of the coast.

Hillside Visual Resources: Nearly 30% of the City consists of undeveloped hillside lands. These lands support a great diversity of visual resources, with prominent exposure from both public and private property. Generally, these features include: (1) unique topographic forms - vertically exposed rock faces, bluffs, headlands and noticeably steep slopes; (2) unique vegetative forms, including stands of oak, sycamore and eucalyptus trees, and riparian or canyon land plant communities; (3) natural watercourses and associated canyon bottoms; (4) special land features such as prominent ridgelines, escarpments and rock outcroppings; and (S) visual edges or boundaries consisting of contrasting features where rock outcroppings may meet with surrounding vegetation or 3 Public Resources Code Section 30251, which is cited above, allows for greater protection of highly scenic areas. 74 -25- Reso. #26.XXX
man-made features such as roads and buildings.
(OSCE, p. 33.) The OSCE further states that “an important aspect of hillside and coastal land features is their visibility from public roadways”—supporting that the OSCE does apply to the Project. (OSCE, p. 35.) Further, the City implements the following policy in its OSCE: 7-A Preserve to the maximum extent feasible the quality of public views from hillsides and along the city’s shorelines. (OSCE, p. 35.) Here, the proposed ADU will be 16 feet in height, the maximum allowed height for detached ADUs per Laguna Beach Municipal Code Section 25.17. Due to the ADU’s proposed location and height, some ocean views from the public right-of-way are affected by the structure. While story poles have not been installed on site due to refusal of the Applicant, photos show that there will be negative impacts to the ocean and coastline from Chiquita.”
The record does not support the Appellant’s assertions. The Board properly applied the applicable CDP criteria under the City’s certified LCP, and its findings regarding adverse impacts to coastal scenic resources are supported by substantial evidence.

First, the applicable standard for CDP review is set forth in Laguna Beach Municipal Code Section 25.07.012(F)(3), which requires a finding that “[t]he proposed development will not adversely affect… coastal scenic resources.” The LCP does not require a separate or explicit “significance threshold” analysis as framed by the Appellant, nor does it limit the City’s discretion to only deny projects that result in severe or complete obstruction of views. Rather, the City is required to evaluate whether a proposed development adversely affects coastal visual resources, including public views of the ocean and coastline, and to preserve those views to the maximum 75 -26- Reso. #26.XXX
extent feasible pursuant to the Open Space and Conservation Element (“OSCE”).

The OSCE expressly identifies coastal visual resources as a key component of the City’s coastal environment and emphasizes the importance of visibility from public roadways. Policy 7- A directs the City to “[p]reserve to the maximum extent feasible the quality of public views from hillsides and along the city’s shorelines.” This policy does not establish a minimum threshold of “significant” impairment before protection applies; rather, it reflects a proactive obligation to protect public views where feasible. The Board’s analysis is consistent with this directive.

The Land Use Element (“LUE”) requires the City to “Encourage preservation of historically significant residential structures and protect the character-defining components of Laguna Beach’s traditional neighborhoods.” (LUE Policy 2.2.) This necessarily includes maintaining the visual setting and public visibility of such resources. Here, as reflected in Finding No. 1, HRG determined that the proposed ADU would impair views of the historic residence and negatively impact the spatial relationship that characterizes the property. These impacts directly implicate the visual character policies of the LCP.

Accordingly, the Board properly considered the visibility of the historic residence from the public right-of-way in conjunction with impacts to public ocean views. In essence, the Board highlighted the combination of the historic resource with ocean views as the coastal scenic resource. Comparing it to a piece of art in a pedestrian plaza with an ocean view backdrop, the Board discussed in depth this resource. This analysis does not expand the definition of coastal resources, but reflects a reasonable application of the LCP’s requirement to evaluate visual impacts to both natural and built elements that contribute to the coastal setting. The LUE is a component of the City’s certified LCP, and pursuant to CDP Finding No. 1, the City must find that a proposed 76 -27- Reso. #26.XXX
project is in conformity with all applicable provisions of the LCP in order to approve a CDP.

Second, the Board’s determination was not based on a finding of negligible or “fleeting” view obstruction. Substantial evidence in the record—including site photographs, staff analysis, and Board member observations following site visits—demonstrates that the proposed ADU, due to its height, width, and placement within the front portion of the lot, would obstruct portions of ocean views from the public right-of-way along Chiquita Street. The Board reasonably concluded that this impact constitutes an adverse effect on coastal scenic resources under the City’s LCP.

The Appellant’s argument that the impact is mitigated because views may be available from other nearby locations does not negate the Board’s finding. The preservation of public views under the Coastal Act and the LCP is not limited to protecting only the “best” or “primary” vantage points, nor does the availability of alternative views render the loss of an existing view segment inconsequential. The City is entitled to protect incremental public views along public streets, particularly in a coastal community where such views contribute cumulatively to the visual character and public experience of the shoreline.

Third, the Appellant’s characterization of Chiquita Street as an insignificant or purely residential roadway is not determinative. The OSCE makes clear that visibility from public roadways generally—not only major arterials such as Pacific Coast Highway or Laguna Canyon Road—is relevant in evaluating coastal visual resources , as it recognizes that an important aspect of coastal visual resources is their visibility from the City’s roadways.4 While those corridors may
be of particular importance, the LCP does not exclude residential streets from consideration. 4 OSCE, Topic 7 (Visual Resources) (“An important aspect of hillside and coastal land features is their visibility from public roadways.”).
77 -28- Reso. #26.XXX
Members of the public, including residents, visitors, and pedestrians, utilize local streets and are entitled to the benefit of coastal views available from those locations. The Board appropriately considered views from the public right-of-way along Chiquita Street as part of its analysis.

Fourth, the Appellant’s reliance on selected Coastal Commission appeal decisions and case law does not compel a different conclusion. Those decisions are fact-specific and do not establish a uniform rule that only “significant” or total obstruction of views may be considered an adverse impact. Moreover, the City’s certified LCP governs the review of CDPs within its jurisdiction, and the Board is required to apply the policies and standards of those regulations. The Board’s interpretation and application of its LCP is entitled to deference so long as it is reasonable and supported by the record, which it is here.

Finally, the Appellant’s policy argument that upholding the Board’s decision would preclude development throughout the City is not supported by the record. The Board did not adopt a categorical rule prohibiting all development that affects views. Rather, it evaluated a specific proposal on a specific site and determined that the combination of the ADU’s size, placement, and relationship to the public right-of-way and historic residence resulted in an adverse impact on coastal scenic resources that could not be mitigated or avoided. Many projects can and do proceed within the City while maintaining compliance with CDP findings by being appropriately sited and designed to minimize public view impacts.

In sum, the Board applied the correct legal standard under the City’s LCP and reasonably concluded, based on substantial evidence, that the proposed ADU would adversely affect coastal scenic resources. The Appellant has not demonstrated that the Board failed to apply the proper analysis or that its findings lack evidentiary support. 78 -29- Reso. #26.XXX

5. “Misunderstanding of Coastal Resources: While Gov. Code § 66329 holds that the provisions of the Coastal Act (and processing for CDPs) applies to ADUs, the State ADU law applies on non-coastal matters such as historic resources, building setbacks, and lot coverage that are not protected by the Coastal Act. The DRB erroneously claimed “coastal resources” of items clearly outside the purview of the Coastal Act or City’s LCP in reaching its decision to deny Mr. Lukoff’s project. Resolution 2026-0148 erroneously holds that the project be denied because Mr. Lukoff’s historic home is a “coastal scenic resource.” To the contrary, under the Coastal Act and Laguna Beach’s LCP, a historic home is not a coastal scenic resource. There is no express definition provided within the LCP or Coastal Act of “coastal resource,” aside from temporary use CDPs, where coastal resources are defined within LBMC 25.07.006, as “public access opportunities, visitor and recreational facilities, water-oriented activities, marine resources, biological resources, environmentally sensitive areas, agricultural lands, and archaeological or paleontological resources.” Furthermore, the 1984 Laguna Beach Coastal Land Use Plan Technical Appendix discusses scenic or visual resources as “views from public areas such as highways, beaches, parks and vista points,” with a main focus being “property situated adjacent to the major transportation systems in the city, i.e., Laguna Canyon Road and Pacific Coast Highway, since it is along these roadways that a majority of residents and non-residents view the community and have visual access to scenic corridors.” Furthermore, neither the CDP review criteria under LBMC § 25.07.012(F) nor the CDP findings at (G) expressly mention historic properties. It is obvious that the City’s Historic Resources Plan is not part of the City of Laguna Beach’s Local Coastal Plan. The DRB’s 79 -30- Reso. #26.XXX
analysis in deliberation and Resolution 2026-0148 is legally erroneous because historic properties are not contemplated within the concept of a coastal scenic resource.

Furthermore, based on the DRB deliberations, the Board based its decision on the fact that Mr. Lukoff’s property is allegedly a “recreational or visitor-serving facility.” Definitions of recreational or visitor-serving facilities as well as examples are provided in the Coastal Land Use Plan Technical document, incorporated into the City’s LCP. Definitions and examples are provided below: Mr. Lukoff’s property is a private single-family home, not a recreational facility or visitor-serving facility. His private home is not used by tourist population and does not provide accommodations to the public. Mr. Lukoff has been retired for several years and does not operate a business from his home. Moreover, the public is not permitted to enter Mr. Lukoff’s property for recreational or visitor-serving purposes.

For the DRB to characterize Mr. Lukoff’s property as otherwise constitutes a physical invasion of Mr. Lukoff’s property by the City, as such a designated by the City in a public hearing actively encourages the public to enter Mr. Lukoff’s property. Interestingly, this finding made by Chair Gibbs was not included in the adopted Resolution 2026-0148 of March 12, 2026. This calls into question the consistency of the resolution with the Board’s decision and understanding of the project. The DRB’s failure to correctly understand what is or is not a coastal scenic resource is further indication that the decision of the DRB was unreasonable, invalid, and an abuse of discretion.”
City Council’s Response
The Appellant asserts that the Board misapplied the Coastal Act and the City’s LCP by improperly characterizing the subject historic residence as a “coastal scenic resource” and, further, 80 -31- Reso. #26.XXX
by referencing the property as a “recreational or visitor-serving facility” during deliberations. The Appellant contends that these interpretations are legally erroneous and outside the scope of coastal resource protection. The record does not support that contention.

As an initial matter and with respect to references made during deliberations regarding “recreational or visitor-serving facilities,” the adopted Resolution does not rely on such a characterization as a basis for denial. As noted by the Appellant, that discussion was not incorporated into Resolution No. 2026-0148. The Board’s formal action is reflected in the Resolution, which sets forth the operative findings and legal basis for the decision. Any statements made during deliberation that were not included in the adopted findings do not form part of the legal basis for the denial and therefore do not affect its validity. On March 12, 2026, the Board found that the draft resolution attached to the staff report accurately and completely incorporated the Board’s direction from the prior hearing and voted 3-1 (Bauta abstaining) to adopt the Resolution as presented. The Board’s discussion of public appreciation of historic resources does not equate to a formal designation of the property as a visitor-serving facility, nor does it create any right of public access to private property. The Appellant’s suggestion that such comments constitute an encouragement of trespass or a “physical invasion” is not supported by the record and mischaracterizes the nature of the Board’s remarks.

As it relates to the Board’s determinations regarding the Project’s impacts to an irrefutable historic resource,5 the Project was appropriately reviewed for consistency with the City’s certified LCP, which requires consideration of such impacts. The City is located within the coastal zone, 5 In 2009, at the Applicant’s request, the existing single-family residence on the subject Property was placed on the City’s Historic Register and the Applicant entered into a Mills Act contract with the City. 81 -32- Reso. #26.XXX
and development within the coastal zone must comply with the Coastal Act and the City’s certified LCP. Government Code section 66329 expressly provides that nothing in the State ADU law supersedes or lessens the effect or application of the California Coastal Act of 1976. (See Gov.

Code Section 66329 [“Nothing in [the state ADU law] shall be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976. . . .”].) As a result, ADU projects in the coastal zone remain subject to coastal permitting requirements. In Laguna Beach, unless a proposed ADU consists solely of the conversion of habitable area within the walls of an existing single-family dwelling, the project requires a CDP. (LBMC Section

25.07.008(A)(1)(a).) Here, the Project proposes a new detached ADU and therefore requires a CDP.

Under LBMC Section 25.07.012(G), a CDP may be approved only if the reviewing authority finds that the project conforms with all applicable provisions of the certified LCP. The City’s certified LCP is implemented through, among other things, the Zoning Code and the General Plan Land Use Element and Open Space and Conservation Element. Those LCP components include multiple policies addressing historic preservation, neighborhood character, and protection of the visual setting of historic resources. The Board properly relied on those provisions.

Specifically, the Board found that the Project did not comply with the following applicable provisions of the Certified LCP:

General Plan Land Use Element Policy 2.2 - Encourage the preservation of historically significant residential structures and protect the character-defining components of Laguna Beach’s traditional neighborhoods.
82 -33- Reso. #26.XXX
Here, the Project does not preserve the historic integrity of the existing singlefamily residence. The property owner has received a significant incentive in the form of a reduced property tax rate as a result of their participation in the Mills Act program. A condition of this incentive is compliance with the Secretary of Interior Standards. HRG reviewed the Project and determined it did not comply with the SOIS “because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively impacting the spatial relationship that characterizes the property.”
Open Space and Conservation Element Policy 12-C: Development adjacent to a place, structure or feature found to be of historical significance shall be designed so that the uses permitted and the architectural design will protect the visual setting of the historical site.

As indicated above, in order to approve or conditionally approve a CDP, certain findings must be made. (LBMC Section 25.07.012(G).) One of the findings requires that the approving authority find that “[t]he project is in conformity with all the applicable provisions of the certified local coastal program.” The Board appropriately considered the Project’s inconsistency with applicable LCP policies in its denial of the Project.

The Appellant’s broader argument—that historic resources are categorically outside the scope of coastal resource protection under the Coastal Act and the City’s LCP—is also unpersuasive. Section 30253 of the Coastal Act explicitly calls out “special communities and neighborhoods that, because of their unique characteristics, are popular visitor destination points.” Previous Coastal Commission decisions as well as case law all support the idea that historic resources are afforded some protection under the Coastal Act. This is further supported by the City’s certified LCP – which has policies meant to protect historic resources. The City’s LCP includes adopted policies that expressly protect historically significant structures, neighborhood character, and the visual setting of historic resources. Those policies are part of the certified LCP and are therefore applicable in CDP review.

Moreover, the Coastal Commission staff has expressly found that historic resources fall squarely within the coastal resource protections of the Coastal Act and the City’s LCP. On August 84 -35- Reso. #26.XXX
11, 2020, the City Council adopted LCP Amendment No. 17-0388 related to the City’s historic preservation program, which amended the Municipal Code, the General Plan, and the City’s Residential Design Guidelines. Amendment for these modifications was required to be certified by the Coastal Commission. On February 10, 2022, the Coastal Commission approved the LCP amendment (LCP-5-LGB-20-0051-3) with certain modifications, which were adopted by the City Council later that year. In the Coastal Commission staff report prepared for this hearing, the report makes clear that in no uncertain terms, the Coastal Act and the City’s LCP expressly address the preservation of historic resources:
“The policies cited below are the relevant policies with regard to preservation of historic resources:

The Coastal Land Use Plan Technical Appendix segment of the certified LUP expressly incorporates the following Coastal Act policies regarding historic preservation and community character:

Section 30251 states:

The scenic and visual qualities of coastal areas shall be considered and protected as a resource of public importance. Permitted development shall be sited and designed to protect views to and along the ocean and scenic coastal areas, to minimize the alteration of natural land forms, to be visually compatible with the character of surrounding areas, and, where feasible, to restore and enhance visual quality in visually degraded areas. New development in highly scenic areas such as those designated in the California Coastline Preservation and Recreation Plan prepared by the Department of Parks and Recreation and by local government shall 85 -36- Reso. #26.XXX
be subordinate to the character of its setting.

The Land Use Element of the certified LUP contains the following policies:

Action 1.1.13 states: Encourage preservation of historic structures and adaptive reuse of buildings.

GOAL 2: Preserve, enhance and respect the unique character and identity of Laguna's residential neighborhoods. Intent - The residential neighborhoods of Laguna Beach are diverse in housing design and are characterized by a strong neighborhood identity. Styles range from traditional to contemporary, with a majority of neighborhoods being of an eclectic mix. Pressures for development created by Laguna Beach's spectacular coastal and hillside settings and consistently high property values are perceived as creating cumulatively negative aesthetic and other impacts on these unique neighborhoods.

In response to such impacts, Goal 2 sets forth policies and actions to preserve, enhance, and respect the character and identity that make Laguna Beach a highly desirable community in which to live through actions such as 1) amending zoning ordinances, including the implementation of long-term anti-mansionization standards; 2) changing the Design Review guidelines and process; 3) encouraging the preservation of historic residences; and 4) strengthening the Landscape and Scenic Highways Resource Document.

Policy 2.2 Encourage the preservation of historically significant residential structures and protect the character-defining components of Laguna Beach's traditional neighborhoods.

Action 2.2.2 Receive an annual report from the Heritage Committee regarding preservation issues related to historically significant structures 86 -37- Reso. #26.XXX
and amend preservation policies and ordinances as necessary to address identified issues. (Same as Action 3.3. I.)
Action 2.2.3 Adopt incentives to preserve residential structures that contribute to the cultural and/or architectural character and heritage of the community.

GOAL 3: Preserve, enhance, and respect the unique, small-scale village character and individual identity of Laguna Beach's commercial areas. Intent -Laguna Beach's commercial areas are predominantly low-scale, which contributes to the pedestrianoriented street environment. The village charm of Laguna Beach is a character that community members have long worked to preserve and enhance. An example of such a preservation technique is the Downtown Specific Plan, adopted in 1989 to preserve the "village atmosphere." The following policies apply to all commercial areas of the City and encourage compatibility of uses, the creation of small businesses, pedestrian orientation and access, art-related uses, enhanced and appropriate landscaping, and the preservation of historically significant commercial structures.

Policy 3.1 Promote development that is compatible with the pedestrian-oriented village character of the downtown (e.g., small lot sizes and height limitations).

Action 3.1.1 Consider adopting appropriate incentives for small commercially zoned lots to encourage a continuation of historic development patterns of small buildings on small lots. Examples of such incentives could include relaxed parking and setback standards.

Policy 3.2 Encourage expansion of the village character, as defined in the 87 -38- Reso. #26.XXX
Downtown Specific Plan, to other commercial areas of the City.

Policy 3.3 Encourage the preservation of historically significant buildings and protect the character-defining components of Laguna Beach's commercial neighborhoods. (Similar to Policy 2.2.)
Action 3.3.1 Receive an annual report from the Heritage Committee regarding preservation issues related to historically significant structures and amend preservation policies and ordinances as necessary to address identified issues. (Same as Action 2.2.2)
Action 3.3.2 Develop City incentives to preserve significant/special commercial buildings in Laguna Beach.

Action 3.3.3 Consider the establishment of a land trust or other mechanism to purchase historically significant and special commercial structures.

Action 5.1.3 Promote preservation of historic structures and adaptive reuse of existing buildings.
…
Historical resources range from architecturally significant historic buildings and collections of buildings or residences that form distinctive neighborhoods to those associated with important persons or events in Laguna Beach’s history. As noted in the Laguna’s Design Guidelines – A Guide to Residential Development: “The preservation of local landmarks, historical development patterns, diversity of design and pedestrian scale have contributed to Laguna’s village atmosphere[.]”
The certified LUP has expressly incorporated Coastal Act Section 30251, 88 -39- Reso. #26.XXX
which requires, in relevant part, that permitted development be sited and designed to be visually compatible with the character of surrounding areas. In addition, the LUE of the LUP contains policies and actions that encourage the preservation of historic structures and adaptive reuse of buildings (Action 1.1.13 and 5.1.3); encourage the preservation of historically significant residential structures and protect the character-defining components of Laguna Beach’s traditional neighborhoods and commercial neighborhoods (Policy 2.2 and 3.3); promote development that is compatible with the village character of the downtown (e.g., small lot sizes, pedestrian orientation, eclectic mix of architectural styles, etc.) (Policy 3.1); and encourage expansion of the village character to other commercial areas (Policy 3.2). Moreover, the LUE defines neighborhood character as the “sum of the qualities that distinguish areas within the City, including historical patterns of development (e.g., structural heights, mass, scale or size), village atmosphere, landscaping themes and architectural styles. …
Additionally, it should also be noted that impacts to community character will continue to be determined on a case-by-case basis through the coastal development permit process. Therefore, these proposed changes to the IP will not be inconsistent with the LUP regarding the protection of character and impacts to historic resources.”
(Coastal Commission staff report dated January 21, 2022 and posted to the February 10, 2022 Coastal Commission meeting agenda.)6
(Emphasis added.)
6 The staff report may be accessed here: https://documents.coastal.ca.gov/reports/2022/2/Th9b/Th9b-2-2022- 89 -40- Reso. #26.XXX
This Coastal Commission staff guidance confirms that historic preservation policies within the City’s certified LCP are valid and relevant considerations in CDP review.

Accordingly, the Board did not deny the Project based on an improper or extraneous theory of coastal resource protection. Rather, the Board denied the Project because it could not make the required finding that the Project conforms to all applicable provisions of the certified LCP. As reflected in Resolution No. 2026-0148, the Board found that the proposed detached ADU would adversely affect the visual setting and integrity of the designated historic residence and would conflict with applicable LCP policies, including General Plan Land Use Element Policy 2.2 and Open Space and Conservation Element Policy 12-C. The Resolution also relies on HRG’s conclusion that the proposed siting and scale of the ADU would impair views of the historic residence and disrupt the spatial relationship that characterizes the property. Those are proper LCP-based considerations and provide substantial evidence supporting the Board’s decision.

In sum, the record does not demonstrate any misunderstanding of coastal resources by the Design Review Board. The references made during deliberation to visitor-serving concepts were not adopted as findings and did not form the basis for denial. The actual basis for denial, as stated in Resolution No. 2026-0148, was the Project’s inconsistency with applicable provisions of the City’s certified LCP, including policies protecting historic resources and their visual setting. For that reason, the Appellant has not established that the Board’s decision was unreasonable, invalid, or an abuse of discretion.

6. “Failure to Abide by Permit Streamlining Act and State ADU Law: Outside of narrow range of resources regulated by the Coastal Act, it is the State ADU law, and not the City’s report.pdf
90 -41- Reso. #26.XXX
subjective design review process, that applies to Mr. Lukoff’s project. Under State ADU Law, a city “shall ministerially approve an application for a building permit within a residential or mixed-use zone” to create specified units (emphasis added). Gov. Code § 66323(a). This includes one detached ADU that has four-foot side and rear setbacks that is no more than 800 square feet of livable space and not taller than 16 feet in height. Gov.

Code § 66323(a)(2). Furthermore, a local agency “shall not impose any objective development or design standard that is not authorized by this section” for a qualifying project. Mr. Lukoff’s project is a qualifying project under Gov. Code § 66323(a)(2). Mr.

Lukoff proposed a detached ADU that abides by 4-foot side and rear setbacks, is under 800 square feet, and is no taller than 16’ in height from the finished floor. However, the Board imposed lot coverage standards to deny the project, claiming that the 48% lot coverage was greater than the 42.88% lot coverage for the R-2 zone and purporting to deny the ADU project on that basis. The discussion captured during the February 26, 2026 and March 12, 2026 DRB hearings, as well as Resolution 2026-0148, provide a clear indication that the City is applying subjective standards and not objective standards to Mr.

Lukoff’s project. Under Gov. Code 66313(i), “‘objective standards’ means standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant ... and the public official prior to submittal.” Even where Gov. Code § 66323(a) by-right approval does not apply, in evaluating an application under Gov. Code § 66314(b)(1), a city may only “[i]mpose objective standards on accessory dwelling units that include, but are not limited to, parking, height, setback, 91 -42- Reso. #26.XXX
landscape, architectural review, maximum size of a unit, and standards that prevent adverse impacts on any real property that is listed in the California Register of Historic Places” (emphasis added). A listing under the City’s Historic Register is not a listing on the California Register of Historic Places. In fact, in review of the California Register of Historic Places, within the City of Laguna Beach, only the Museum of Art, Mariona, and St. Francis Catholic Church are listed, not the subject property. See, California Historic Resources, available at https://ohp.parks.ca.gov/
ListedResources/?view=county&criteria=30 (last visited Mar. 10, 2026). The fact that the City seeks to deny Mr. Lukoff’s ADU project based on dueling consultant reports that come to different conclusions shows that the DRB is applying subjective, and not objective standards. Furthermore, the DRB’s decision is based on zoning standards that State ADU Law supersedes. The processing of Mr. Lukoff’s application also raises an Equal Protection issue under the Fourteenth Amendment. Mr. Lukoff appears to have been singled out for disparate treatment by having had his application heard by the Design Review Board when ADUs are mandated to be ministerially processed under Gov. Code § 66317(a). Under LBMC § 25.07.012(D), when only a CDP is required, such as a ministerially approved ADU, the CDP decision is within the purview of the Director of Community Development, not the Design Review Board. The DRB’s decision is inconsistent with a recent project at 239 Viejo St. where the City permitted demolition of a historic home that contained the same historically significant characteristics (upper story windows and cross-gable roofline) as Mr. Lukoff’s home as well as the project at 320 North Coast Hwy. (the former Madison Square & Garden Café) that blocks the front façade of a 92 -43- Reso. #26.XXX
historic cottage. Furthermore, Moreover, the City is not following the requirements of Gov.

Code § 66317(b), which states, If a permitting agency denies an application for an accessory dwelling unit pursuant to subdivision (a), the permitting agency shall, within the time period described in subdivision (a), return in writing a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant. Additionally, “No local ordinance, policy, or regulation, other than an accessory dwelling unit ordinance consistent with this article shall be the basis for the delay or denial of a building permit or a use permit under this section” per Gov. Code § 66317(d). The City’s proposed action violates both of those State ADU Law requirements. The City proposes to issue Mr. Lukoff a blanket denial based on non-coastal and non-ADU ordinance bases with no direction on how Mr. Lukoff could remedy any purported defective items, which is an issue that Mr. Lukoff raised during his testimony before the DRB. The City appears to take a position that Gov. Code § 66329(a) allows the City to impose the provisions of the ordinary zoning code to deny ADU projects based on lot coverage and front yard setbacks. For instance, staff has made the assertion that because the City’s entire zoning code is incorporated wholesale into the LCP, the City escapes the requirements of State ADU Law entirely since it can use of the standard provisions of the zoning code to prevent ADU construction. However, it is clear that the State ADU Law governs non-Coastal Act aspects of a project. For instance, under Gov.

Code § 66321(b)(3), a city may not impose: Any requirement for a zoning clearance or separate zoning review or any other minimum or maximum size for an accessory dwelling unit, size based upon a percentage of the proposed or existing primary dwelling, or limits 93 -44- Reso. #26.XXX
on lot coverage, floor area ratio, open space, front setbacks, and minimum lot size, for either attached or detached dwellings that does not permit an accessory dwelling unit with at least 800 square feet of interior livable space and with four-foot side and rear yard setbacks to be constructed in compliance with all other local development standards.

Under canons of statutory construction, a statute that speaks to a specific matter applies over a general statute. Additionally, the State ADU Law “shall supersede a conflicting local ordinance.” Gov. Code § 66325. Here, although the City can consider coastal impacts under the Coastal Act per Gov. Code § 66329(a), the City is abusing its authority to assert that on issues not contemplated by the Coastal Act, that the LCP can wholesale override provisions of the State ADU Law. For instance, the City directed Mr. Lukoff to submit a project with a 21’ front yard setback, and then obtained the HRG historic consultant to state in their report that the proposed ADU is too close to the existing residence. If Mr. Lukoff had been able to submit with a 13’ – 15’ front yard setback as permitted under Gov. Code § 66323(a)(2) and (b), this would allow for increased spacing from the existing home, since under this provision, front yard setbacks cannot be applied to deny an ADU project for up to 800 square feet. Even more telling is that whilst other cities have sought review of their ADU laws by the California Department of Housing and Community Development as required by Gov. Code § 66326(a), the City of Laguna Beach does not appear to have done so with either Ord. 1713 or Ord. 1715, which were passed after the enactment of Gov. Code § 66326.”
City Council’s Response
The Appellant asserts that the City failed to comply with the Permit Streamlining Act and 94 -45- Reso. #26.XXX
State ADU Law by subjecting the Project to discretionary review, applying subjective standards, and relying on zoning provisions—such as building site coverage—that are allegedly preempted by State law. The Appellant further contends that the Project qualifies for ministerial approval and that the City improperly imposed additional requirements and procedures, including review by the Board.

The record does not support these assertions. The City’s processing and evaluation of the Project are consistent with State ADU Law, the Coastal Act, and the City’s certified Local Coastal Program (LCP).

First, State ADU Law expressly preserves the applicability of the Coastal Act within the coastal zone. Government Code Section 66329(a) provides that ADUs located within the coastal zone “shall be subject to the requirements of the California Coastal Act.” As a result, even where an ADU meets the dimensional standards identified in Government Code Section 66323(a)(2), it is not exempt from CDP requirements or the findings that must be made under a certified LCP. In the City of Laguna Beach, the Coastal Commission has delegated CDP authority to the City through its certified LCP, which requires discretionary review of development to ensure consistency with coastal resource protection policies.

Here, the Project required a CDP due to its location within the coastal zone and its potential to affect coastal scenic resources and a designated historic resource. As such, the Project is not eligible for purely ministerial approval, and the City is required to evaluate the Project under the applicable CDP findings, including visual compatibility, impacts to coastal scenic resources, and consistency with General Plan and historic preservation policies incorporated into the LCP. The involvement of the Board in this process is consistent with the City’s implementation of its LCP 95 -46- Reso. #26.XXX
and does not conflict with State ADU Law. The City Council furthermore incorporates the City Council response to Contention No. 5 regarding historic resource protections in the LCP and Coastal Act in this response to Contention No. 6.

Second, the Appellant’s assertion that the City applied impermissible “subjective” standards is not supported by the record. The standards applied by the Board—including CDP Review Criteria 3 and 6, building site coverage limitations, and policies related to historic resources—are codified in the Municipal Code and General Plan and are applied uniformly to development proposals within the coastal zone. Here, because a CDP is required, applicable policies and provisions apply. While certain findings, such as visual compatibility, inherently require the exercise of professional judgment, they are grounded in adopted policies, determined on the basis of substantial evidence, and are not arbitrary or ad hoc.

Third, the Board did not deny the Project solely on the basis of building site coverage or other zoning standards in isolation. Rather, the building site coverage finding was one of several required findings under the Municipal Code and was directly tied to the City’s ability to approve increased coverage only where it preserves views or maintains neighborhood development patterns. The Board found that the Project did neither. Importantly, the denial is independently supported by the Project’s failure to meet CDP findings, including adverse impacts to coastal scenic resources – which include historic resources – and lack of visual compatibility.

Accordingly, even if certain zoning standards were not dispositive, the Project would still fail to meet required CDP findings.

Fourth, the Appellant’s reliance on Government Code Section 66321(b)(3) and related provisions is misplaced in the context of the coastal zone. While State ADU Law limits the 96 -47- Reso. #26.XXX
application of certain local development standards, it does not override the Coastal Act or the City’s certified LCP. The Coastal Act is a separate and independent statutory framework that the Legislature has expressly preserved. The City is therefore obligated to harmonize State ADU Law with Coastal Act requirements, and where a conflict exists, Coastal Act provisions govern development within the coastal zone. The City has not “wholesale overridden” State ADU Law; rather, it has applied the appropriate statutory framework for a coastal development project. As one example, the City allows certain ADU projects to qualify for an exemption from the ADU parking requirement, consistent with state ADU law.

Fifth, the Appellant’s argument regarding front yard setbacks and alternative siting does not demonstrate a violation of State ADU Law. The Project as proposed was evaluated based on its actual design, including its location within the front portion of the lot. While State law may limit the imposition of certain setback requirements for qualifying ADUs, it does not require the City to approve a specific design that results in adverse impacts to coastal resources or historic properties. The Board evaluated the Project that was submitted and found that its siting and configuration did not satisfy required findings. The City is not obligated to redesign the Project on the Applicant’s behalf or speculate as to whether an alternative configuration might be approvable.

Sixth, the Appellant’s claim of disparate treatment and Equal Protection violations is not supported by the record. The examples cited by the Appellant involve materially different properties, regulatory contexts, and project characteristics. With respect to 239 Viejo Street, the project involved demolition of an existing duplex that was expressly determined not to be a historic resource and did not qualify for listing on either the California Register or the City’s Historic Register. Accordingly, no Mills Act contract or Secretary of the Interior’s Standards applied, and 97 -48- Reso. #26.XXX
there was no requirement to preserve the visibility or spatial relationships of a designated historic resource. In contrast, the subject property is a designated historic resource subject to a Mills Act contract that remains in effect, where preservation of character-defining features and their public visibility are core considerations. Further, the Appellant left mid-deliberations and did not avail himself to the potential iterative process where the Board explores possible project modifications in an attempt to meet the required findings.

Similarly, the comparison to 320 North Coast Highway is ill-fitting to the facts of this CDP application. That project included the construction of two open, freestanding pergola structures between a historic commercial building and the street, rather than the placement of a new enclosed two-story building mass directly in front of a historic façade. The trellis design did not obstruct public views of the historic resource in the same manner as a solid structure. Moreover, as a commercial site, the property is open to the public, allowing direct access and visibility of the historic building from within the site, which fundamentally differs from a private residential property where public views are limited to the public right-of-way. Finally, the project plans for 320 North Coast Highway were reviewed by the City’s architectural historian (HRG), who found that the proposed alterations met the Secretary of the Interior’s Standards for Rehabilitation. Here, HRG found that the Project does not comply with SOIS.

These distinctions are critical. Land use determinations are inherently site-specific, and the subject property’s combination of a Mills Act-designated historic resource, its location within the coastal zone, and the proposed placement, massing, and scale of the ADU present a unique set of facts not present in the cited examples. As such, the City’s decision-making in this case reflects a reasoned application of applicable standards rather than disparate or arbitrary treatment. 98 -49- Reso. #26.XXX
Seventh, with respect to Government Code Section 66317(b), the requirement to provide written comments identifying deficiencies applies to ministerial ADU applications. As discussed above, the Project is not subject to purely ministerial approval due to the need for a CDP.

Notwithstanding this, the City provided extensive feedback to the Applicant over the course of the review process, including through staff communications, consultant reports, and the public hearing process. The record reflects that the Applicant was aware of the issues related to siting, massing, historic resource impacts, and view impacts, and had the opportunity to revise the Project in response.

Finally, the Appellant’s suggestion that the City has failed to comply with State requirements for ADU ordinance review by the Department of Housing and Community Development (“HCD”) is not relevant to the validity of the Board’s decision on this Project. The issue before the City Council is whether the Board properly applied applicable law to the Project as proposed. The record demonstrates that it did. Nevertheless, Ordinance No. 1713, which currently governs the regulation of ADUs and JADUs, was adopted as an urgency measure in accordance with Government Code Sections 65858 and 36937. Under applicable law, a city may adopt an urgency ordinance that becomes effective immediately upon adoption without Coastal Commission certification when the ordinance does not conflict with the Coastal Act and does not authorize a use other than those already permitted under the City’s certified Local Coastal Program (“LCP”). (Conway v. City of Imperial Beach (1997) 25 Cal.App.4th 78, 88–89.) The City has also submitted a corresponding non-urgency ordinance to the Coastal Commission, which was transmitted in April 2025 and remains pending. Because the City has a certified LCP, the nonurgency ordinance cannot take effect unless and until it is certified by the Coastal Commission. It 99 -50- Reso. #26.XXX
is anticipated that this certification process will address applicable requirements of both the Coastal Commission (with respect to LCP amendments) and HCD (with respect to approval of the City’s ADU ordinance).

In sum, the City did not violate the Permit Streamlining Act or State ADU Law. The Project is subject to the Coastal Act and the City’s certified Local Coastal Program, which require discretionary review and findings that were not met in this case. Whether or not a property is on the California Register of Historical Resources, historic resources in the coastal zone are protected as coastal resources by the Coastal Act and the City’s LCP. The Board’s denial is supported by substantial evidence and reflects a lawful application of the governing statutory and regulatory framework.

7. “Misunderstanding of CEQA: The DRB deliberations and Resolution 2026-1048 also show a misunderstanding of CEQA. The Board alleges that the project could not be approved on the basis that a Class 3 (Small Structures) categorical exemption may not apply because of the historic home. The DRB ignored that under SB 131, which creates the “near miss” category of CEQA processing, a City-registered historic home is not a barrier to the project under CEQA. Since the historic home is the only purported condition that could potentially render the project ineligible, the City would not need to conduct a full initial study or EIR and instead limited to analysis of the potential effects of the action on the historic property. Pub. Res. Code § 21080.1(b) (2025). Furthermore, had the Board fully analyzed the potential effects on the historic property in line with the GPA and Sapphos reports, the Board would have concluded that the CEQA Class 3 (Small Structures) categorical exemption would apply.”
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City Council’s Response
The Appellant asserts that the Board misunderstood and misapplied the California Environmental Quality Act (CEQA), specifically with respect to the applicability of a Class 3 categorical exemption and recent statutory changes under Senate Bill (“SB”) 131. The Appellant contends that the presence of a historic resource does not preclude use of a categorical exemption and that, at most, limited environmental review would be required. This argument is not relevant to the validity of the Design Review Board’s action and is not supported by the record.

Under SB 131, “housing development projects”, as defined, that narrowly fail to qualify for any CEQA exemption due to a single disqualifying condition need only review those environmental effects caused solely by that condition, which substantially reduces the scope of the CEQA review. Here, however, the Project does not qualify under SB 131. Section 65589.5 of the Government Code includes the following definition of a “housing development project”:
“(h) The following definitions apply for the purposes of this section: . . . (2)“Housing development project” means a use consisting of any of the following:
(A) Residential units only.”
(emphasis added)
The plain language of the statute and its use of the plural “residential units” means the project must be creating more than just one residential unit; indeed, the term of art, "housing development project" contemplates one project that is developing a use of at least two residential units. Thus, for a project like this one – with an existing use of one unit and the development of a 101
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use of a second unit (i.e., the ADU) – SB 131 would not apply, as the only “residential unit” being developed or created is the ADU and thus it is not a project consisting of “residential units only.” As a matter of due diligence on a separate matter regarding this same definition but under the context of the Housing Accountability Act (“HAA”), on November 5, 2025, City staff submitted a request for technical assistance from the California Department of Housing and Community Development (“HCD”) on this very issue of whether the HAA applies to a project that only involves an addition to an existing single-family home and an ADU.

On November 17, 2025, HCD responded that they had reviewed the inquiry, but would not be able to provide technical assistance on the matter “[d]ue to limited staff resources and fluctuating caseloads.” While HCD did posit that this refusal to answer should not be interpreted as an endorsement or rejection on the merits of the City’s inquiry, HCD’s refusal to posit that the HAA does apply to these types of projects does provide City staff a modicum of confidence in our position. HCD is typically not shy about staking out broad and expansive positions regarding the application of State housing laws to certain projects. Thus, HCD’s refusal to do so here may be instructive. Accordingly, the City’s position is that the Project does not qualify as a housing development project under SB 131 because it adds only a single new residential unit to the property remains unchanged.

Here, as a threshold matter, the Project was denied. Under CEQA Guidelines Section 15270 and Public Resources Code Section 21080(b)(5), projects that are rejected or disapproved are not subject to CEQA. Resolution No. 2026-0148 expressly states that the Project is not subject to CEQA on this basis. Accordingly, no CEQA analysis—whether categorical exemption, “near 102
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miss” analysis, or otherwise—was required or relied upon in connection with the denial. The Board’s decision does not depend on CEQA compliance.

While CEQA was not determinative here, the Board’s discussion regarding the applicability of a categorical exemption was not incorrect. CEQA Guidelines Section 15300.2(f) provides that a categorical exemption cannot be used where a project may cause a substantial adverse change in the significance of a historical resource, as was found to be the case with the proposed Project. The Project site contains a designated historic resource subject to a Mills Act contract, and the record—including the HRG reports and staff analysis—supports the conclusion that the proposed ADU would adversely affect that resource by altering its spatial relationship to the street and obscuring a substantial portion of its primary elevation. Under these circumstances, the potential applicability of the historical resource exception to a categorical exemption is a valid consideration.

In sum, the Board properly concluded that CEQA does not apply to projects that are not approved. Because the Board found that the Project would not preserve the historic integrity of the existing single-family residence, the Board would not have been able to approve the Project with a categorical exemption from CEQA. Because SB 131 does not apply, an Initial Study (and potentially an Environmental Impact Report) would be required in order to consider approval of the Project.

8. DRB Denial Constitutes Unconstitutional Taking: In the DRB’s deliberation, the Board Members used both the Mills Act, and a designation of Mr. Lukoff’s property as a “recreational” or “visitor-serving facility” to justify unconstitutional taking of Mr.

Lukoff’s property rights. The Fifth Amendment to the U.S. Constitution, and Art. 1, Sec. 103
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19(a) of the California Constitution guarantee the right to just compensation in the event of a physical or regulatory taking of private property. Unless just compensation is provided to Mr. Lukoff by the City, the DRB’s actions are unconstitutional pursuant to the threepart framework established in Penn Central Transportation Co. v. New York City (1978) 483 U.S. 104, 124, based on economic impact, investment-backed expectations, and the character of the government action. The Board seems to believe that Mr. Lukoff consented to waive his Fifth Amendment rights when he signed onto the Mills Act because of the tax break associated. Mr. Lukoff received consideration of tax breaks under the Mills Act to provide for the upkeep and maintenance of his historic property. The Fifth Amendment standard for a taking is “just compensation,” not a tax break. By entering into the Mills Act contract, Mr. Lukoff did not receive just compensation and did not consent to a taking of his property rights under the State ADU Law or development rights of an R-2 zoned property, contrary to the Design Review Board’s assertion. First, the economic impact is substantial. Resolution 2026-0148 and the deliberations of the DRB effectively foreclose not only the ADU as proposed, but signals that no ADU would be permitted on Mr. Lukoff’s property at all, thereby depriving Mr. Lukoff of a significant and expressly authorized residential use on an R-2 zoned lot that otherwise allows multiple dwelling units.

Additionally, as Mr. Lukoff plans to age in place, his current residence may not be adequate. Thus, Mr. Lukoff’s proposed ADU is instrumental to his aging-in-place plan.

Second, the DRB’s denial directly interferes with reasonable, investment-backed expectations. Mr. Lukoff purchased the property prior to the Mills Act designation, and as he stated during the DRB hearing, the property was in serious disrepair. Based on the Real 104
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Property Report obtained from the City at the time of purchase, Mr. Lukoff formed the understanding he would be able to construct a dwelling unit on the property. Mr. Lukoff later relied on State ADU Law to develop a compliant detached ADU. The Mills Act does not provide cover for the City to conduct a regulatory taking of Mr. Lukoff’s property rights under State ADU Law. Mr. Lukoff purchased the property in 2007 and entered into a Mills Act contract in March 2009. Mr. Lukoff used the benefits of the Mills Act to rehabilitate a dilapidated property. There is no clause in the Mills Act contract that waives Mr. Lukoff’s rights to improve his property, as long as he complies with the terms of the contract. For instance, while he is prohibited from demolition of the house or exterior alterations not within Secretary of the Interior Standards. Here, the proposed ADU is for a detached structure that does not physically alter or add onto the existing Mills Act residence, which is why Mr. Lukoff applied for a detached instead of an attached ADU. Since Mr. Lukoff bought the property with the intention and understanding of developing a second unit, the DRB’s action interferes with his reasonable, investment-backed expectations. Third, the character of the governmental action strongly favors a finding of a taking. First, the DRB’s categorization of Mr. Lukoff’s home as a “recreational, visitor-serving facility” encourages the public to trespass a physical invasion of Mr. Lukoff’s property to tour Mr.

Lukoff’s historic property.7 Rather than a general land use regulation evenly applied, the City has engaged in ad hoc, discretionary decision-making, including shifting application requirements, reliance on conflicting consultant analyses, and the imposition of subjective criteria and non-ADU standards to single out and deny this project, effectively “weaponizing” the Local Coastal Program and historic designation to preclude otherwise 105
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lawful residential development. Furthermore, as discussed above, the obligations under the Mills Act contract are fixed at the time of contract in 2009 and not as the City would like them to be in 2026. Thus, in terms of the Mills Act, Mr. Lukoff is held to the preservation of the significant features of his home as it was in 2009, which did not include the first-floor window, pergola, porch, or entry door. Taken together, these factors demonstrate that the City’s action goes beyond legitimate regulation and instead operates as the functional equivalent of a taking, depriving the owner of core property rights without just compensation in violation of the Fifth Amendment.” City Council’s Response
The Appellant asserts that the Design Review Board’s denial of the proposed Coastal Development Permit constitutes an unconstitutional regulatory taking under the Fifth Amendment to the U.S. Constitution and Article I, Section 19 of the California Constitution, applying the framework established in Penn Central Transportation Co. v. New York City (1978) 438 U.S. 104.

The Appellant argues that the denial deprives the property owner of economically viable use, interferes with investment-backed expectations, and reflects an improper exercise of governmental authority. This argument is not supported by the facts in the record or applicable law.

The City Council incorporates by reference the City Council’s response to Contention No. 5 regarding recreational and visitor-serving facilities.

As an initial matter, a regulatory taking occurs only in limited circumstances where a governmental action deprives a property owner of all economically viable use of the property, or where the impact of regulation is so severe under the Penn Central factors that it effectively functions as a physical appropriation. Courts have consistently held that the denial of a single 106
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development proposal, even one that reduces potential property value or development intensity, does not constitute a taking where reasonable economic use of the property remains.

Here, the subject property is currently developed with a single-family residence that remains fully usable and occupied. The denial of a Coastal Development Permit for a detached ADU does not deprive the owner of all economically viable use of the property, nor does it prohibit continued residential use consistent with the underlying R-2 zoning. The property retains substantial value and utility, and the owner is not deprived of fundamental property rights.

Accordingly, the threshold for a categorical taking is not met.

While the denial of the proposed ADU may limit the intensity of development on the property, it does not eliminate economic use or value. The ability to construct an additional dwelling unit is only one of many potential uses of the property. Courts have routinely found that diminution in value or lost development opportunity, standing alone, does not constitute a taking.

The property continues to function as a residential property, and the denial of one particular configuration of development does not rise to the level of a compensable taking.

The Appellant’s asserted expectations of constructing an additional unit are not determinative where those expectations are subject to existing regulatory frameworks, including the Coastal Act, the City’s certified Local Coastal Program (LCP), and historic preservation requirements. At the time of purchase and at the time of entering into the Mills Act contract, the property was subject to land use regulations that require discretionary review and findings for development impacting coastal resources and historic properties.

Importantly, the Mills Act contract is a voluntary agreement entered into by the property owner in exchange for significant property tax benefits. That contract expressly requires 107
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preservation of the historic resource in accordance with the Secretary of the Interior’s Standards and applicable City regulations. Compliance with these standards necessarily constrains future development on the property as the quid pro quo for tax benefits. Thus, the owner’s expectations that this Property is identical to every other R-2 zoned property without a Mills Act contract is not accurate and the expectations for future development must therefore be understood in the context of these voluntarily accepted obligations. The assertion that no ADU would be permitted is not accurate as other options or configurations could have been explored by the Appellant – but were not.

Additionally, State ADU Law does not create an absolute right to develop an ADU irrespective of other applicable laws. As discussed in prior sections, the Coastal Act and the City’s LCP govern development within the coastal zone, and the proposed ADU remains subject to Coastal Development Permit findings. Thus, any expectation of ministerial approval is inherently limited by these applicable coastal and historic preservation regulations.

The Design Review Board’s action represents a routine exercise of the City’s police power to regulate land use in furtherance of legitimate public purposes, including protection of coastal resources, preservation of historic structures, and maintenance of neighborhood character. The denial is based on adopted policies and standards within the certified LCP, including Coastal Development Permit criteria, General Plan policies, and Municipal Code provisions.

The Appellant’s assertion that the Board’s characterization of the property as a “recreational or visitor-serving facility” resulted in a physical invasion is not supported by the Resolution. While individual Board member comments during deliberation may have referenced the broader public interest in historic resources, Resolution No. 2026-0148 does not designate the 108
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property as a public facility, nor does it authorize or encourage public access to private property.

The legal findings supporting denial are grounded in coastal visual resource protection, historic preservation standards, and zoning compliance—not in any reclassification of the property’s use.

Furthermore, the record demonstrates that the Project was evaluated through an established public process, with input from staff, independent historic consultants, the Heritage Committee, and members of the public. The decision was based on substantial evidence and consistent application of adopted standards. There is no indication of arbitrary or discriminatory treatment that would support a takings claim.

Finally, the Appellant’s contention that the denial forecloses all future ADU development on the property is speculative. The Board evaluated a specific proposal based on its siting, massing, and relationship to the historic resource and surrounding context. The denial does not preclude the possibility that a revised project, designed to comply with applicable standards, could be considered in the future. And to reiterate, the Appellant left mid-way through the Board’s deliberations. This is often when the various Board members float possible project modifications to an applicant to flesh out feasibility of changes and agreement by the Applicant in an attempt to get to approval. While it cannot be said with certainty that for this proposal, the Board would have gotten there for this Project, the Appellant’s decision to purposefully leave the meeting middeliberation vitiated any chance at this process and belies his claim of a taking.

In sum, the denial of Coastal Development Permit 2026-0148 does not constitute a regulatory taking. The property retains viable economic use, the owner’s expectations are constrained by applicable and voluntarily accepted regulations, and the City’s action represents a lawful exercise of its land use authority. Accordingly, the Appellant’s takings claim does not 109
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provide a basis to overturn the Design Review Board’s decision.

SECTION 3. The City Council hereby makes the following findings and facts supporting findings for CDP 2026-0148:

Finding No. 1: The project is in conformity with all the applicable provisions of the certified local coastal program, including the following review criteria:

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 Project does not encroach upon any existing physical accessway legally utilized by the public because the Project is located on private property and no public accessway exists on the property. The Project is also not encroaching upon any proposed public accessway identified in the adopted local coastal program land use plan as no public accessway is planned for the Project site.

2. The proposed development will not adversely affect marine resources, environmentally sensitive areas, or archaeological or paleontological resources.

There are no known marine resources, environmentally sensitive areas, or archaeological or paleontological resources on the Project site and therefore the Project will not adversely affect marine resources, environmentally sensitive areas, or archaeological or paleontological resources.

3. The proposed development will not adversely affect recreational or visitor-serving facilities or coastal scenic resources.

There are no recreational or visitor-serving facilities within 0.25 mile of the Project site.

The Project site is in a developed residential area of the City. Therefore, the Project will not 110
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adversely affect recreational or visitor-serving facilities.

The proposed development will, however, adversely affect coastal scenic resources. The City’s Land Use Plan has policies for visual and scenic resources. The City identifies that the principal focus concerns property situated adjacent to the major transportation systems in the City (i.e., Laguna Canyon Road and Pacific Coast Highway) since it is along those roadways that a majority of residents and non-residents view the community and have visual access to scenic corridors.

The Open Space and Conservation Element, which is part of the City’s certified LCP, defines visual resources, including coastal visual resources or “coastal scenic resources” as shoreline features or the natural appearance of the coast, and hillside visual resources as undeveloped hillside lands:

Hillside Visual Resources: Nearly 30% of the City consists of undeveloped hillside lands.

These lands support a great diversity of visual resources, with prominent exposure from both public and private property. Generally, these features include: (1) unique topographic forms - vertically exposed rock faces, bluffs, headlands and noticeably steep slopes; (2) unique vegetative 111
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forms, including stands of oak, sycamore and eucalyptus trees, and riparian or canyon land plant communities; (3) natural watercourses and associated canyon bottoms; (4) special land features such as prominent ridgelines, escarpments and rock outcroppings; and (S) visual edges or boundaries consisting of contrasting features where rock outcroppings may meet with surrounding vegetation or man-made features such as roads and buildings. (OSCE, p. 33.) The OSCE further states that “an important aspect of hillside and coastal land features is their visibility from public roadways”—supporting that the OSCE does apply to the Project. (OSCE, p. 35.) Further, the City implements the following policy in its OSCE: 7-A Preserve to the maximum extent feasible the quality of public views from hillsides and along the city’s shorelines. (OSCE, p. 35.)
Here, the proposed ADU will be 16 feet in height, the maximum allowed height for detached ADUs per Laguna Beach Municipal Code Section 25.17. Due to the ADU’s proposed location and height, some ocean views from the public right-of-way are affected by the structure.

While story poles have not been installed on site due to refusal of the Applicant, photos show that there will be negative impacts to the ocean and coastline from Chiquita.

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 closest environmentally sensitive area is mapped 0.8 mile east. The closest parks and recreation areas to the Project site are Crescent Bay beach, located 0.3 mile southwest and Laguna Coast Wilderness park, located 0.5 mile northeast. While coastal scenic resource views will be impacted as discussed in criteria 3, there is sufficient buffer area to protect resources contained in 112
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the identified adjacent parks and recreation areas.

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 does not contain any significant natural landforms. The Project will require 18 cubic yards of grading outside the building envelope and, as such, the grading is exempt from design review. The Project is also subject to all requirements of the Laguna Beach Building and Fire Codes and meets such requirements. Additionally, the site is not located in a designated flood or high fire hazard zone, and the Project will not result in undue risk from geological, erosional, flood, or fire hazards.

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.

Here, many of the homes along Chiquita are single-story structures (including 248 Chiquita St. directly to the north and 239 Chiquita St., directly across the street) or appear as a single-story from the street. A two-story ADU in front of a two-story home would not maintain this neighborhood development pattern.

7. The proposed development will not have any adverse impacts on any known archaeological or paleontological resource.

There are no known archaeological or paleontological resources in the Project area.

Therefore, the development will not have any adverse impacts on any known archaeological or paleontological resource.

8. The proposed development will be provided with adequate utilities, access roads, drainage and other necessary facilities.

The Project involves the construction of a detached two-story ADU. The Project site is currently served by existing utilities, access roads, drainage, and other necessary facilities. Given the scope of the proposed development (a 799 square foot ADU), it is anticipated that the existing infrastructure can accommodate the ADU without significant impact. No major deficiencies in utility or service capacity are currently known.

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.

Other public services, such as solid waste collection and public roadway capacity, have been considered and are adequate to serve the proposed development. Since the Project site is already served by these utilities and infrastructure, the addition of a 799-square-foot ADU will not overburden existing public services.

The project is not consistent with all applicable policies of the Certified LCP.

LCP COASTAL VIEW POLICIES (CDP)
General Plan Land Use Element Policy 2.2 - Encourage the preservation of historically 114
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significant residential structures and protect the character-defining components of Laguna Beach’s traditional neighborhoods.

Here, the Project does not preserve the historic integrity of the existing single-family residence. The property owner has received a significant incentive in the form of a reduced property tax rate as a result of their participation in the Mills Act program. A condition of this incentive is compliance with the Secretary of Interior Standards. HRG reviewed the Project and determined it did not comply with the SOIS “because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively impacting the spatial relationship that characterizes the property.” General Plan Historic Resources Element - Goal #1: Preserve and enhance buildings and structures of historic significance in Laguna Beach. Assure that neighborhoods which have a preponderance of older homes and which greatly contribute to the village atmosphere be maintained as cohesive neighborhood units through consistency of size, scale and character.

Here, the Project does not preserve the historic integrity of the existing single-family residence. The property owner has received a significant incentive in the form of a reduced property tax rate as a result of their participation in the Mills Act program. A condition of this incentive is compliance with the Secretary of Interior Standards. HRG reviewed the Project and determined it did not comply with the SOIS “because there is not enough room on the property to accommodate the ADU as designed without impairing the view of the historic resource and negatively impacting the spatial relationship that characterizes the property.” Open Space and Conservation Element Policy 12-C: Development adjacent to a place, 115
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structure or feature found to be of historical significance shall be designed so that the uses permitted and the architectural design will protect the visual setting of the historical site.

Laguna Beach Municipal Code 25.12.008(C)(9) (Building Site Coverage): Single-Family Residence. Lots improved with one single-family dwelling, shall have maximum building site coverage as specified in Section 25.10.008(E)(1)(c) of this title. Building site coverage includes habitable enclosed building space and covered off-street parking. The building site coverage may be modified by the design review board when it is necessary to preserve views or to maintain neighborhood development patterns.

Here, the existing building site coverage is 36%. The maximum building site coverage for 116
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the site is 42.88%. The Project, which consists of an ADU, will cause the building site coverage to be 48%, which exceeds the maximum building site coverage. The added building site coverage is not the result of preserving views or maintaining neighborhood development patterns and therefore the findings to modify the maximum building site coverage cannot be made.

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 site is not located between the sea and the first public road paralleling the sea and therefore this finding is inapplicable.

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.

While the construction of an accessory dwelling unit often falls within an exemption from the California Environmental Quality Act, such as new construction or conversion of small structures under CEQA Guidelines Section 15303, the City must also consider whether an exception to an exemption applies thereby taking the Project outside of the exemption. One such exemption relates to historical resources which prohibits the City from using an exemption for a project which may cause a substantial adverse change in the significance of a historical resource (CEQA Guidelines Section 15300.2(f)).

Here, the Project would create a significant adverse impact on the environment since it would block a majority of the historic resource from a public street. As concluded by HRG, the proposed ADU would cause a substantial adverse change to the existing structure since it would alter the spatial relationship that characterizes the property and it would obscure a majority of the view of the 117
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residence from the street. Projects that comply with the SOIS are considered as mitigated to a level of less than a significant impact on the historic resource. HRG has concluded the Project does not comply with the SOIS.

SECTION 4. The City Council hereby denies the Appeal and sustains the Design Review Board’s determination on the Project, as reflected in Design Review Board Resolution No. 2026- 0148, which such Resolution is incorporated herein by this reference.

ADOPTED this 13th day of May, 2026.

Mark Orgill, Mayor
ATTEST:

Ann Marie McKay, City Clerk
I, Ann Marie McKay, City Clerk of the City of Laguna Beach, certify that the foregoing Resolution No. 26.XXX was duly adopted at a regular meeting of the City Council of said City held on May 13, 2026, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

City Clerk, City of Laguna Beach, CA
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Laguna Beach City CouncilMay 13, 2026

Laguna Beach City Council
May 13, 2026