Prosser, Wan and Shallenberger contend that the project doesn't jibe with the city's Local Coastal Plan and raises issues of statewide concern with respect to providing affordable visitor services along the coast.
A significant issue for the appellants is whether the redevelopment of the deteriorating 24-room hotel into a 10-suite luxury "boutique" resort with rates reportedly at $800 a night violates the Coastal Act, which seeks to promote lower-cost visitor accommodations near the coast.
"Commissioners Wan and Shallenberger contend that the project will result in the loss of overnight visitor serving accommodations along the coast," the staff report states. "The proposed project would result in the elimination of 14 hotel rooms, resulting in a reduction in the number of members of the public which can visit the coast over the year, and a reduction in the segment of the population which is able to enjoy coastal resources."
In addition, the replacement of smaller hotel rooms with larger suites indicates to the commission staff that room rates would be much higher after the redevelopment, according to the report.
Prosser also believes the developer should not be allowed to close down the Boom Boom Room bar and the hotel's restaurant for the same reason, but the staff report doesn't support this contention. The project approved by the Laguna Beach City Council requires a wine bar to be opened at the location, which commission staff believes is a suitable replacement for the Boom Boom Room, a longstanding gay bar that was closed down in 2007 despite a high-profile campaign by local activists to keep it open.
Gay activists have hoped to pressure Hazy into selling or donating the property as a gay community center instead of redeveloping it as a high-end hotel, but Hazy told the City Council that he had never received a serious offer for the property when it was on the market.