In Laguna, variety is the essence of business

A clothing retailer’s recent struggle to open a shop on Forest Avenue has fueled discussion over whether the clothing market has reached its peak in Laguna Beach and whether the city should be able to continue telling merchants what they must carry as it aims for commercial variety.

At a public hearing last week, the City Council wrestled with whether to ease restrictions on what percentage of customized merchandise owners Jenni and Sammy Elmished must stock in their new men’s and women’s clothing store, Casual, at 225 Forest Ave.

The city has the power to set percentages of certain goods.

The Planning Commission in March approved a conditional use permit — by a 3-2 vote — for Casual to occupy the bottom floor of a two-story suite, but the building’s landlord, Allan Simon, appealed the decision based on the wording.

The permit requires the Elmisheds’ stock to be 50% customized merchandise, which could include hand-painted apparel or certain kinds of shirt collars and cuff links.

Simon, chairman of Firebrand Media LCC, which owns the Laguna Beach Independent, said the word “approximately” should be included in the permit because the amount of merchandise can change depending on the season and availability.

The hearing lasted nearly an hour and elicited concerns about whether the city should dictate what retailers stock and how it can enforce such rules.

A few downtown business owners said the area has reached capacity in the clothing market and accused the Elmisheds of carrying clothing lines that are similiar to those in other shops in Laguna.

One retailer suggested the Elmisheds, who own the clothing store Simple Lifestyle on South Coast Highway, differentiate themselves in the new shop by offering other types of clothing.

The council unanimously agreed to Simon’s request, allowing Casual to carry “approximately” 50% of custom-made clothes.

Simon also objected to other conditions that would require Casual to keep on site records of any customization of products and to show they have ordered a minimum of 3,000 custom-made items.

Simon called the condition “punitive” and “discriminatory” in his written appeal.

“I am concerned that this requirement would be too onerous on my tenant and hinder my ability to rent the space to a future applicant,” he wrote.

The council denied Simon’s request to remove these restrictions.

Casual will carry shirts and sports jackets for men and tops and dresses for women, according to a city staff report. The store will also sell footwear and home furnishings.

The Elmisheds said they are opening the store in response to customers’ requests for more affordable options.

“Downtown Laguna Beach is saturated with stores selling low-priced tourist fare: T-shirts and surfer wear,” according to the Elmisheds’ description of the store included in the staff report. “There is a void in the market for independent, moderately priced American designer wear.”

Gila Leibovitch, co-owner of four Laguna stores, including The Vault’s three locations for men, women and kids, said Casual’s offerings would be similar to clothing lines in her stores.

“Retail is completely saturated in the downtown both for men and women,” Leibovitch said during the meeting. “It’s not fair. We have all had to abide by strict conditions, and this applicant should not be given any slack. They are not special.”

Leibovitch acknowledged that percentages would be difficult to enforce and suggested Casual carry items that other stores don’t have, such as men’s and women’s evening wear.

“No percentage of anything can be enforced, but a category can be enforced,” Leibovitch said. “We’re not trying to turn them down. We’re trying to come up with categories that are not saturated in the downtown.”

Laguna has heard these types of arguments before, whether they involved shops selling T-shirts or ice cream.

The city considers each potential retailer on a case-by-case basis, Planning Manager Ann Larson said at the meeting. Once the city finds out a store has closed, staff alerts the Planning Commission.

“We let the them know there’s been a woman’s clothing store that has recently closed and you could consider this a replacement of that,” Larson said. “It doesn’t mean they are exactly the same. It doesn’t mean there’s a moratorium.

“All it means is that we need to take a look at that particular type of store, to make sure is it really different from the others.”

Enforcement is primarily complaint-driven. The city checks a business one year after it receives a conditional use permit to ensure compliance with requirements.

Councilman Rob Zur Schmiede, a former planning commissioner, said the situation exemplifies why the city is updating its Downtown Specific Plan, which sets guidelines on land use and tenant mix.

“The purpose of the rules is to create diversity of retailers in downtown ... but not get into the amount of wearables the guy has stacked on the shelf.”

Councilman Kelly Boyd had a slightly different perspective.

“I’m a firm believer in competition is healthy,” Boyd, former owner of the Marine Room tavern, said by phone Monday. “I don’t know about changing the conditional use permit process. That you can have one line that no one else can have, that doesn’t help competition, nor is it fair.”