STAFF REPORT
Meeting Date:
June 23, 2026
BUSINESS
25 SUBJECT: ECONOMIC DEVELOPMENT: CONSIDERATION OF OUTDOOR DINING
PARKLET EXTENSION AND MARKET ASSESSMENT
RECOMMENDATION: It is recommended that the City Council:
1. Consider whether to extend the expiration date of the three remaining outdoor dining parklets currently operating within public parking spaces to December 31, 2026, or another date determined by the City Council; and
2. Provide direction regarding the preparation of a 2026 Economic Development Market Assessment to identify retail, restaurant, grocery, health and fitness, and other commercial business categories that are underrepresented in Laguna Beach and desired by residents.
SUMMARY OF THE MATTER
On November 18, 2025, the City Council directed staff to extend existing parklet Temporary Use Permits (TUPs) for up to six months, from January 1, 2026, and required businesses to develop transition plans for relocating outdoor dining from public parking spaces to alternative compliant locations. Those permits are scheduled to expire on June 30, 2026.
Three parklets remain in operation: Tango, Oto Sushi, and Adonis. Staff is seeking Council direction regarding whether the remaining parklets should be removed as previously directed or whether the Council wishes to authorize an extension through December 31, 2026, or another date.
Additionally, staff is seeking direction regarding the preparation of a citywide market assessment. The purpose of the assessment would be to identify business categories and commercial uses that are currently underserved within Laguna Beach and to provide data that can support future economic development, business attraction, and land use policy decisions.
BACKGROUND
Parklets
During the November 18, 2025, meeting, the City Council established a distinction between outdoor dining operating on private property and parklets occupying public parking spaces.
For parklets located within public parking spaces, the City Council directed staff to extend existing TUPs until June 30, 2026, request transition plans from participating businesses wishing to extend outdoor at their restaurant to December 31, 2026, and evaluate long term solutions that would relocate outdoor dining into sidewalks, private property, or other compliant configurations.
Since that direction was provided, the number of active parklets has continued to decline. As of the date of this report, three parklets remain in operation within public parking spaces.
ECONOMIC DEVELOPMENT: CONSIDERATION OF OUTDOOR DINING PARKLET
EXTENSION AND MARKET ASSESSMENT
June 23, 2026
Market Assessment
The City has undertaken several economic development initiatives in recent years, including business retention efforts, commercial vacancy monitoring, and targeted recruitment activities. While these efforts have provided valuable information regarding individual businesses and commercial districts, the City has not recently completed a comprehensive market assessment focused on identifying the types of businesses most desired by residents, visitors, and the marketplace.
A market assessment could provide an objective evaluation of current market conditions, consumer spending patterns, retail leakage, demographic trends, visitor behavior, and business opportunities within Laguna Beach.
DISCUSSION
Parklet Extension
The Council may determine that extending the remaining parklets would provide additional operational certainty for the affected businesses while the City continues broader discussions regarding outdoor dining and commercial vitality.
Potential advantages of an extension include:
• Continued outdoor dining opportunities for participating businesses. • Additional time for businesses to evaluate permanent alternatives, including patterns of use at the Promenade on Forest as well and updated AB 413/bulb-out planning. • Preservation of existing customer amenities during the summer and holiday seasons.
Potential considerations include:
• Continued occupation of public parking spaces.
• Consistency with the Council's previous direction regarding parklet removal. • Equity considerations for businesses that have already removed their parklets.
Should the Council desire to extend the remaining parklets, staff recommends establishing a definitive expiration date and clarifying whether any additional conditions should apply during the extension period.
Economic Development Market Assessment
There’s little doubt that the retail environment has changed nationally, regionally, and locally given the extent of on-line purchasing. Even as we may hope that certain retail stores will prosper in commercial areas, the marketplace drives these decisions. The City has talked about using better data and professional expertise to advise the City and community as to what mix or mixes of uses will do well, at least until use patterns change again.
A market assessment could provide valuable information regarding the types of businesses that residents, visitors, and the broader market would and would not support within Laguna Beach.
Potential topics for analysis include:
• Restaurant and food service opportunities.
• Specialty retail categories.
• Grocery and neighborhood serving commercial uses.
• Health, wellness, and fitness businesses.
ECONOMIC DEVELOPMENT: CONSIDERATION OF OUTDOOR DINING PARKLET
EXTENSION AND MARKET ASSESSMENT
June 23, 2026
• Entertainment and experiential retail.
• Consumer spending patterns and retail leakage.
• Visitor spending trends.
• Commercial vacancy trends.
• Recruitment opportunities and market gaps.
The assessment could be completed by neighborhood by an economic development consultant with expertise in retail recruitment and market analysis. The resulting report could help guide future economic development strategies, business recruitment efforts, zoning discussions, and commercial corridor planning.
Examples of questions that could be addressed include:
• What business categories are under- and over-represented in Laguna Beach? • What goods and services are residents purchasing outside of city stores and providers? • What business sectors demonstrate the strongest market potential, and in what neighborhoods? • What business types are most frequently requested by residents and visitors? • How can / does Laguna Beach compete and compare with similar coastal communities?
FINANCIAL ANALYSIS
If the Council elects to extend the parklets, there would be no significant additional fiscal impact beyond ongoing permit administration and enforcement activities.
Should the Council direct staff to prepare a market assessment, staff would return with a proposed scope of work and associated budget for Council consideration. Depending on the scope and consultant selected, costs would likely be funded through existing economic development appropriations or a future budget allocation.
ENVIRONMENTAL ANALYSIS
The proposed actions are not projects under the California Environmental Quality Act (CEQA) pursuant to section 15378 of the CEQA guidelines because they involve organizational and administrative activities that will not result in a direct or indirect physical change in the environment.
ATTACHMENTS
1. November 18, 2025 City Council Direction Regarding Outdoor Dining and Parklets (Pgs. 4-5) Submitted By:
. Approved: .David A Kiff
Jeremy Frimond, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Jeremy Frimond, Assistant City Manager