Hotel Laguna, 14 West boutique hotel reopen after security team disturbances led to closure
A civil dispute over the operation and management of some Laguna Beach properties that led to the closure of two Laguna Beach hotels last week has taken a new turn.
City officials executed a temporary closure of Hotel Laguna and 14 West boutique hotel on Wednesday, May 3, saying the situation arose to the level of a public safety issue. The action was taken after security teams for two different investors were involved in a handful of incidents at the properties the day before.
In a news release announcing the hotel closures, authorities alleged that the security teams were armed.
The hotels reopened Friday, May 5, after a hearing in Orange County Superior Court resulted in a temporary restraining order against Mohammad Honarkar and his associates. The order prohibits Honarkar or anyone acting on his behalf from being within 200 feet of the properties through May 30, when a hearing for a preliminary injunction has been scheduled.
Notices of the order have been placed at the front entrance to both hotels. It also applies to several rental properties, including Retreat at Laguna Villas, Duplex at Sleepy Hollow and Sunset Cove Villas.
“The TRO is temporary and lasts three weeks, so the court can sort things out,” Isaac Zfaty, legal counsel for Honarkar said in a statement. “During that time, we are to simply stay away. The city presumably reopened on that basis, but we don’t know that.”
Marc Cohen, an attorney representing a group of investors who claim to have bailed out Honarkar from a $195-million foreclosure, said his clients had assumed control of management and operation of the two hotel properties in March.
“Since his removal as administrative manager, Honarkar has engaged in sabotage of the business operations of the properties, and as of May 2, 2023, resorted to rash tactics of using armed guards to attempt to hastily take over some of the properties that are under the control of his business partners,” Cohen said in a statement.
Both sides have filed suit against each other. Zfaty said the competing group had become investors with the local real estate developer two years ago, but some questionable financial transactions had been identified by the developer.
City officials decided to temporarily close Hotel Laguna and 14 West after altercations involving armed security teams at both properties on Tuesday.
“There’s obviously a variety of other requirements, but in terms of fresh cash infusion into the portfolio, the amount was $30 million,” Zfaty said. “How much they actually put in really is the root of the dispute. It’s unclear to us. … There are a variety of questionable transactions that occurred that, if they are what they appear to be, would mean that the Continuum [Analytics] group did not in fact put in its capital contribution. Of course, when you don’t buy into a partnership, then you are not a partner.”
City officials enumerated four encounters between the security teams on May 2, which included a 20-person physical confrontation inside the lobby of Hotel Laguna that afternoon.
When authorities responded to 14 West twice after 6 p.m. and reportedly discovered armed guards, City Manager Shohreh Dupuis issued a summary nuisance abatement order to close the two hotels.
A person who said they were staying at 14 West said that authorities removed guests from the facility early the next morning.
The hotels were allowed to reopen on May 5. An acknowledgment that on-site security is to be unarmed was a condition of the rescission of the summary abatement determination and order.
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