The former Ti Amo Italian restaurant property and the Neighborhood Congregational Church have been identified as possible locations for future development of affordable housing in Laguna Beach.
In April, the City Council voted to pull money for other housing related funds to create a trust fund to support affordable development. The new pot of money could help with rent subsidies, accessory dwelling unit development loans and new affordable units, officials have said.
The city then put out the notice of the new funding opportunity and pledged up to $2.5 million from the housing trust fund for interested parties to apply to see if the city could get matching grants through the state. Developers responded with project proposals to build housing at those two locations.
This week, the council voted to consider the two sites for possible projects – with the caveat that if they appeared not to be ideal, the city and the developers were not legally bound to move forward. By attaching project concepts to applications, city officials said they hoped the requests for grants would be more successful.
Laguna Beach like so many other California cities is facing state mandates to create more affordable housing. Among the city’s target population to benefit from new housing are qualified seniors, artists and local workers.
Community members voiced their concerns about having affordable housing at those two properties. Among the worries were a drop in property values and what would become of the Montessori school that’s been run at the church site for 50 years. Some suggested that creating more parking, especially at the Ti Amo site, would make more sense. All asked the council to tread carefully with lots of transparency.
“This is an opportunity to get matching funds from the state of California,” Councilmember Bob Whalen said. “If the council approves this non-binding document, it sets the stage for further discussions. It’s a tiny step to take for potential eligibility for funding. Makes sense to see if we can work through all these issues.”
The shuttered restaurant was purchased by the city for $2.9 million in 2021 for a possible upgrade to the city’s Fire Station 4, which serves South Laguna. But, a year later, the city decided the property on the ocean side of South Coast Highway near 3rd Avenue wasn’t as ideal for the fire station as another location just up the street on the inland side of the highway.
Now West Development Ventures/Fullerton Development Partners is proposing to build 24 units, both studios and one-bedroom apartments, on the property for seniors with low and very low incomes. It could be completed by June 2026.
Related California submitted a project proposal for 340 St. Ann’s Drive, the present site of the church and school. The proposal received is for 72 units, including studios, one-, two- and three-bedroom apartments, that would be homes for extremely low-income households, people with disabilities and homeless people. If the project were approved, it could be completed by May 2028.
“NCC has entered into an agreement with Related California to continue exploration for financing and development of a 100% affordable housing project, complete with an onsite spiritual center,” the Rev. Rod Echols, the church’s pastor said in a statement. “NCC is still in the very early stages of the planning process. We will keep the community informed of our progress.”
Echols added that like other churches, NCC has experienced declining membership and underutilization of its facilities and that over several years the membership has been thinking about how to better use the property to “deepen the benefit for the community.”
“NCC is going through a process to evaluate reducing the size of our space to make way for affordable housing,” he said.
Both proposals were submitted as letters of intent, preliminary agreements outlining the parties’ intent to pursue funding without being legally bound to move forward should there be issues. Staffers said that flexibility is key, especially in complex projects where uncertainties such as financing, permits and regulatory requirements exist.
Concerned community members said they want more details and transparency about the projects, including asking what they would look like and how big they would be. Some objected out of concern for their property values and others suggested that Laguna Canyon might be a more suitable location for these types of projects.
“We have the same questions you have,” Whalen said. “We haven’t seen elevations or plans. All these questions will be addressed and I understand the concerns.”
The church property would likely fall under Senate Bill 4, which has streamlined the process for religious institutions and schools to build affordable housing on their properties. The law also allows them to override many local zoning restrictions, which could give the city less of a hand in controlling what is built.
The bill also guarantees “by-right” approval of new homes as long as they are consistent with all objective building standards and comply with existing environmental protections.
What that actually could mean for a project at the church property remains to be seen, said Jeremy Frimond, assistant city manager. “We would have less discretion, but the extent is unclear.”
In the meantime, the city will submit the two letters of intent for the properties to the state along with its application for $2.5 million, which would be a match for what the council approved as its housing trust fund.
If the projects are awarded funding by the state, there would still be opportunities for public input.
“We will have diligence,” Mayor Sue Kempf said. “We’re just trying to see if we can get funding from the state for affordable housing. You know how we are in Laguna, we talk about things for a long time.”
