Owner Mark Christy explains how keeping the original structures and framing of the original buildings of the old Aliso Creek Inn is a high priority during the remodel and upgrade for the Ranch at Laguna Beach. (Don Leach, Coastline Pilot / July 8, 2014)

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The California Coastal Commission has agreed to hold a public hearing on whether a hotel renovation project in Aliso Canyon, approved by the Laguna Beach Planning Commission in May, violates coastal laws, especially regarding environmental protection.

At their regular meeting Wednesday in Ventura, coastal commissioners heeded concerns of the agency's staff about elements of Laguna Beach Golf & Bungalow LLC's plans to remodel a 64-room hotel, restaurant, banquet and nine-hole golf course facility called the Ranch at Laguna Beach (formerly Aliso Creek Inn & Golf Course).

On May 14, the Planning Commission unanimously approved a coastal development permit and conditional use permit for the project at 31106 S. Coast Hwy. Lifelong Laguna Beach resident and Hobie Surf Shop co-owner Mark Christy is the principal investor in the property.

But the following month, Laguna Beach resident Mark Fudge appealed the commission's decision, challenging the project on several grounds, including possible harm to the environment and public access and any reduction to overall affordable overnight housing.

According to Christy, the facility, with 23 detached buildings on 84 acres across South Coast Highway from Aliso Beach Park, is in dire need of upgrades to make the 1960s-era buildings fire safe and compliant with Americans With Disabilities Act requirements. He also noted that it was essential to repair cracking and rotting exteriors.

"We're restoring this place that has been neglected," Christy said. "The televisions are from the 1980s and the carpet hasn't been touched in decades."

The owners want to modify existing building facades and reduce the square footage — by more than 10,000 square feet, Christy said — redo the hotel lobby and restaurant area, construct a wellness spa and fitness center and boost the stock of hotel rooms within existing buildings.

Plans call for splitting some rooms in half, boosting the number of suites to 97.

In Fudge's appeal, contained within the Coastal Commission's staff report, he alleges the project lacked sufficient environmental review and was not properly revealed to the public. He also complained about lack of clarity on room rates and whether the city's stock of affordable overnight housing might be diminished as a result of the pricing.

Fudge also claims the proposal is inconsistent with Laguna's Local Coastal Plan's historic preservation policies.

Aliso and Wood Canyons Wilderness Park, with hiking and bicycle trails, abuts the property to the east.

"The city of Laguna Beach conducted an unlawful development process and allowed the applicant to obtain permits he had no reasonable expectation of receiving," Fudge's appeal says. "The Planning Commission was considering a project in an environmentally sensitive area that had inadequate or no environmental review."

The property runs parallel to Aliso Creek and no part of the proposed project would encroach on any environmentally sensitive area, Christy said.

Coastal Commission staff want to take a closer look at potential environmental harm.

"Due to [the proposed project's] location within a flood plain and potential historical and archaeological significance, the site is of local and statewide significance, worthy of the most careful planning efforts," the coastal staff report says. "The city's action lacks legal support ... because its action on the [coastal development permit] could adversely impact valuable coastal resources, including recreational and access amenities."

After receiving the necessary permits and assurances from the city that the changes met all applicable laws, Christy began portions of the remodel work. Crews have stripped all of the hotel buildings to their wood frames as they install fire sprinklers and add insulation to walls, Christy said.

In December, the city issued Christy a building permit for the existing work.

None of the improvements required a coastal development permit or any other city discretionary permits, according to a July 8 letter signed by Laguna's new Community Development Director Gregory Pfost and sent to the Coastal Commission.

"The remodel project does not increase the square footage of existing buildings or structures by 50% and does not remove, replace or reconstruct more than 50% of the structures," the city's letter says.

Since the project does not meet the threshold for a major remodel or a new development, creating a public trail through the property is not required, according to the city.