Attachment 15
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Edwin C. Kisiel, Esq.
Kisiel Law
1205 Victory Walk
Laguna Beach, CA 92651
(949) 549-9650
[email protected]
March 18, 2026
City of Laguna Beach
City Council
505 Forest Avenue
Laguna Beach, CA 92651
Re: Notice of Appeal – Design Review Board Resolution 2026-0148 APN: 053-124-18
Application: CDP 2026-0148
Address: 238 Chiquita Street
Dear City Council Members:
Mr. Lukoff submits his appeal to request that the City Council set aside the Design Review Board’s (“DRB”) March 12, 2026 decision to adopt Resolution 2026-0148 to deny Coastal Development Permit 2026-0148 for a proposed accessory dwelling unit (ADU) at 238 Chiquita Street in the City of Laguna Beach (the “property”).
The DRB’s decision is both factually and legally insufficient, as discussed below.
Furthermore, the DRB’s decision is tantamount to an unconstitutional taking of Mr. Lukoff’s property rights. Since Mr. Lukoff owns a 4,500 square-foot R-2 zoned lot, Mr. Lukoff is entitled to build not only an ADU, but also a second main dwelling unit, under Laguna Beach Municipal Code (“LBMC”) §§ 25.12.004; 25.12.008. This is the understanding that Mr. Lukoff had when he purchased the property in 2007, which was then dilapidated and has been restored. Here, Mr.
Lukoff is seeking to build an ADU consistent with his rights under Gov. Code §§ 66310, et seq. (“State ADU Law”), and the findings for a Coastal Development Permit (“CDP”) can be satisfied. We are confident that the errors in the DRB’s decision will be made clear in the City Council’s exercise of independent judgment of the evidence. We ask that the City Council grant the owner’s appeal, overturn Resolution 2026-0148, and either approve the project and CDP asis, or in the alternative, remand the project to the Director of Community Development for ministerial processing of the project and CDP in accordance with clear requirements of state law.
Background
Mr. Lukoff purchased the property at 238 Chiquita Street in 2007. This property consists of one residence on a 4,500 square foot lot in the R-2 zone. When Mr. Lukoff bought the property, he made his purchase with the expectation that based on zoning and lot size, he could build a second main dwelling unit. As Mr. Lukoff stated at the DRB hearing, the property was thoroughly dilapidated with many health and safety problems that made it not useable as a residence. Mr. Lukoff undertook extensive efforts to rehabilitate and restore the property, and 251
2 listed the home on the Mills Act in 2009. The property tax incentive that Mr. Lukoff received under the Mills Act was instrumental to restoring the property from a state of disrepair and continuing to maintain the property.
Between 2016 – 2018, Mr. Lukoff added an addition to the rear of the property. Prior to obtaining planning approval of the addition, he obtained a historic consultant report from GPA, relied upon by the City, which specified significant characteristics of the historic property as including the upper story windows and cross-gable roof and excluding the first-floor picture window, front entry door, porch, and pergola, which were understood to be 1960s modifications.
Mr. Lukoff desires to age in place and anticipates needing home care. At this stage, he is seeking to construct a second residence, in the form of a 799 square foot ADU, so that the property can accommodate both his residence as well as that of an on-site, full-time caregiver.
As such, he began discussing the ADU project with the City in 2022. Based on direction from City planning staff, he obtained a historic consultant report from Sapphos in 2023. He further engaged with planning staff regarding design, and he submitted a complete planning application in November 2024 with all items required on the submittal checklist. In July 2025, he submitted a revised version of the design based on feedback from planning staff. Overall, there have been six planners assigned to the project, each of whom made conflicting demands regarding project design. Feedback from planning staff included a required front yard setback of 21 feet, which pushed the ADU closer to the historic home. However, as permitted under State ADU Law, Mr.
Lukoff’s expressed preference throughout the planning process is to have greater separation between the main house and the ADU by applying a 13’-15’ front property line setback, which would better maintain views of the historic residence.
Standard of Review
Mr. Lukoff submitted a timely appeal to City Council on March 18, 2026. The standard of review for a City Council appeal is contained in LBMC § 25.05.070. Resolution 2026-0148, the matter under review, was approved by affirmative vote of three members of the Design Review Board. Thus, the scope of review under LBMC § 25.05.070(E)(2)(b) applies. This provision states,
If the decision or determination was not supported by four or more affirmative votes of the approval authority, upon hearing the appeal or request for review, the city council shall conduct a de novo review of the underlying application but shall be limited to the grounds specifically stated in the notice of appeal, if an appeal was filed, and to the evidence, including plans, that was presented to the approval authority. The city council shall exercise its independent judgment and discretion as to such evidence. Nevertheless, there shall be a presumption that the decision or determination made by the approval authority was reasonable, valid, and not an abuse of discretion; and the appellant, if there is one, shall have the burden of proof of demonstrating otherwise by a preponderance of the evidence, including plans, presented.
Thus, City Council is required to conduct de novo review, exercising its independent judgment and discretion in resolving the appeal. Because the DRB’s action to deny Mr. Lukoff’s application rests on erroneous facts and is legally unsupportable, the DRB’s action constitutes 252
3 abuse of discretion. Abuse of discretion on the part of public officials occurs when an agency’s action is arbitrary, capricious, or entirely lacking in evidentiary support. California Hospital Ass’n v. Maxwell-Jolly (2010) 188 Cal.App.4th 559, 568. To support a decision, agency action must consider all relevant factors and demonstrate rational connection between those factors, the choice(s) made, and the purposes of the enabling statute. O.W.L. Foundation v. City of Rohnert Park (2008) 168 Cal.App.4th 568, 585-86. Furthermore, the DRB’s actions constitute a regulatory taking without just compensation. Mr. Lukoff can satisfy the burden of proof to demonstrate that the DRB’s actions were unreasonable, invalid, and an abuse of discretion based on the erroneous factual and legal bases of the DRB’s decision. Thus, City Council should grant the appeal.
Denial Rests on Erroneous Factual Findings
There are several erroneous assertions within the DRB’s deliberations and Resolution 2026-0148 that render the City’s action unreasonable, invalid, and an abuse of discretion. First, the DRB’s findings with regards to the neighborhood compatibility of the CDP are factually incomplete and not reflective of actual conditions. Second, the City consultant’s flawed report, which was relied on by the DRB for its findings, is not consistent with the greater weight of the evidence, consisting of a City-accepted February 2013 historic review of the property as well as the January 2023 pre-application Sapphos consultant report. Finally, Mr. Lukoff asserts that his application is not incomplete but is instead deemed complete by operation of law.
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 structures (including 248 Chiquita St. directly to the north and 239 Chiquita St., directly across the street) or appear as a singlestory 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 secondstory 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 one- and 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 253
4 existing residence” (emphasis added).1 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.
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:
2 1 Historic Resources Group, 238 Chiquita Street, Laguna Beach | Peer Review, 7 (2023). 2 Sapphos Environmental, Inc., Design Review for the Project Located at 238 Chiquita Street, Laguna Beach, CA 92651, 15 (2023).
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5 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”:3 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:
4 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 characteristics of the property leads to faulty analysis 3 Galvin Preservation Associates, Compliance with Secretary of the Interior’s Standards for Proposed Alterations to 238 Chiquita Street, Laguna Beach, 4 (2013). 4 Historic Resources Group, 238 Chiquita Street, Laguna Beach | Peer Review, 3-4 (2023). 255
6 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 non-character 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.
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 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 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. 256
7 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.
Denial Lacks Legal Sufficiency
The DRB’s decision to deny Mr. Lukoff’s application for a CDP is legally insufficient.
First, the DRB made conclusory findings regarding potential coastal view impacts from Chiquita Street and clearly failed to apply the Coastal Act’s significance standard. Second, the DRB makes the unsupported assumption that a historic property is a “coastal scenic resource” and a “recreational” or “visitor-serving facility” which is not supported by either the Coastal Act or the City’s LCP. Third, from a procedural standpoint, the City failed to abide by State ADU Law mandating ministerial approval and imposition of solely objective criteria. Overall, the City failed to harmonize the requirements of State ADU Law with application of its LCP.
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 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 this 257
8 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.
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.5 The DRB’s 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:6
5 See, City of Laguna Beach, Local Coastal Program,
https://www.lagunabeachcity.net/government/departments/ community-development/planning-zoning/land-use-plans/local-coastal-program#!/ (last visited 18 Mar. 26) (omitting any discussion of the City of Laguna Beach’s Historic Resources Element). 6 Laguna Beach Coastal Land Use Plan Technical Appendix 6-7 (1984). 258
9 Mr. Lukoff’s property is a private single-family home, not a recreational facility or visitorserving 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.
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 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 259
10 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, 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 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 260
11 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 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.
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 Cityregistered 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 261
12 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.
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. 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 three-part 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 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 262
13 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 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.
Conclusion
The DRB’s decision to deny Mr. Lukoff’s ADU and CDP is unreasonable, invalid, and abuse of discretion. The DRB’s deliberation and Resolution 2026-0148 make clear that the Board used invalid facts and improper legal arguments to justify its decision. Moreover, the DRB’s actions show that Mr. Lukoff is being singled out for disparate treatment by the City as compared to other property owners. Finally, if the City were to adopt the approach to Mr.
Lukoff’s property wholesale City-wide, the City risks encountering widespread litigation from property owners, project applicants, and the Department of Housing and Community Development (HCD) for violation of the Housing Accountability Act, State ADU Law, Permit Streamlining Act, Coastal Act, and the U.S. and California constitutions.
Thank you for your consideration of these comments regarding Mr. Lukoff’s appeal of Resolution 2026-0148. We urge the City Council to disapprove the DRB’s actions approve the project as-is, or in the alternative, remand the project to the Community Development Director to process Mr. Lukoff’s project and CDP according to the requirements of the State ADU Law.
Kind regards,
Edwin C. Kisiel, Esq.
Attorney
Counsel for Mr. Jonathan Lukoff
7 Feb. 26, 2026 DRB Meeting Video at 42:20.
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