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Red Dragon restaurant project approved, parking plans will return to council for final review


After being stalled for years due to a definition disagreement with a state agency, the Red Dragon restaurant project was unanimously approved by Laguna Beach City Council this week. But the conditioned approval included direction on the plans for parking, which will return to council for final review before the restaurant opens.

Councilmembers voted 5-0 on Tuesday (April 26) to approve a Conditional Use Permit, design review, a Coastal Development Permit and several variances for the proposed restaurant at 680 South Coast Highway, formerly the Mosun restaurant and nightclub.

Although they also agreed that several conditions related to parking need to be worked out and return to council for review before the Certificate of Occupancy is issued. Several public speakers and local residents agreed that it’s a worthy project, but that the parking plan wasn’t clear and there were concerns about the potential impact on the neighborhood. 

“I’d like to see the project approved too (and) I’d like to see something that the neighborhood can support,” said Mayor Pro Tem Bob Whalen. “It sounds to me like there is a deal to be made there, it just needs more work.”

“Things need to be nailed down,” he added.

Conditions related to off-site parking agreements, a valet plan and employee parking can be modified to note that they will return to the council prior to the issuance of a COO, confirmed Principal Planner Martina Caron. 

Related to the other key items of discussion, councilmembers also agreed to a maximum of 150 seats, hours of operation limited between 11 a.m.-10 p.m., and parking planned for at least 52 customers and 30 employees.

Ultimately, the council approved a motion that also included removing take-out from the resolution (it was initially included in the previously approved CUP), but allowed for delivery services.

Whalen suggested they grant the CUP with the required condition that it comes back to the council on the items specified.

Others agreed that the parking plan is the biggest issue that needs to be settled before it returns.

Councilmember George Weiss said he loves the project, but is concerned that they are “pushing the envelope,” in terms of the parking not being fully thought out.

“It’s kind of messy,” he said. “There’s a number of moving parts to this.”

He suggested holding off on the applicant-requested breakfast hours until the parking plan is solidified and studied to ensure it’s working as expected. This is a high-end restaurant that will likely attract people from the surrounding areas, he noted, so it will likely be busy.

The building is beautiful and it’s a great addition to the city, he noted, but it’s a lot of people to accommodate and vehicles to park. 

“I support this project, I want it to go through,” Weiss said, “but I want it to go through with the best solutions for parking that we can come up with.”

It’s not fully figured out quite yet, Whalen agreed, although the applicant team didn’t know what the council was going to require, which makes it hard to finalize any parking plans.

Red Dragon renderings

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Courtesy of City of Laguna Beach/James Conrad Architects

Proposed elevation renderings for the Red Dragon project

Overall, councilmembers liked the project and were excited to see it come to town.

 “I just love the building and I think it’s going to make a really great addition to our dining atmosphere here in Laguna Beach,” said Councilmember Peter Blake.

It will be an improvement to the previously “blighted” area, he said. It’s also not intensified over the previous use, he added, if anything it will be reduced from the nightclub use to fine dining.

The applicant has gone out of their way to get the parking mitigation plan to work, Blake said. Many of the guests will likely take Uber or other rideshare services, he commented. He doesn’t anticipate a parking problem. 

And it should be conditioned on the parking they are proposing to bring in, he added. 

 “As long as they can park what they say they can park,” Blake said. “I think it’s time we opened this restaurant up and let people enjoy it.”

It’s been vetted “up and down” since starting the process about six years ago, he noted. 

Council previously approved the remodel project in April 2016. Design review was required for the upper-level additions, elevated decks, rooftop equipment and some other modifications. It was determined not to be a “major remodel” and that there was no increase in intensity, therefore city staff found it exempt from the need for a Coastal Development Permit. The Planning Commission later approved a variance to allow the roof to be constructed over the proposed trash enclosure. Construction started in early 2018.

A member of the public challenged the city’s determination in September 2018 and requested a determination by the California Coastal Commission executive director.

After a site inspection and a stop-work order for some additional slab demolition that had occurred, it was still determined not to be a major remodel by the city. However, after some back and forth with the CCC, it was concluded that the development requires a CDP. Based on this, city staff advised the applicant that new plans would need to be submitted as required for a major remodel and a CDP.

Red Dragon current property

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Photo by Mary Hurlbut

The current property for the proposed Red Dragon project 

The city’s current land use element policy addresses major remodel, but it’s fairly vague, Community Development Director Marc Wiener noted at Tuesday’s meeting. It says more specificity is provided in the municipal code, but that’s not the case, he explained. 

“So, it’s really a difference in interpretation,” of what constitutes a major remodel, Wiener said, “the city’s understanding of that was different than the Coastal Commission’s.”

The CCC’s standard isn’t codified in the Coastal Act, he added, so it’s been a work in progress and developed through their review of projects.

“It’s kind of a moving target,” Wiener said. 

In the case of this project, the city believed it to be under the major threshold because almost 70% of the exterior structural walls are being preserved, but the CCC said the roof structure (which was completely removed) should also be included. 

Since that time, the city is now on the same page with the Coastal Commission, Wiener said. Staff is planning on bringing an ordinance before the council in June that will provide clarity to the definition and more flexible standards. 

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There were special circumstances with this particular project, Wiener added.

“We wanted to make sure we identified that because we wanted to distinguish what occurred here from any other future project that may come in where they’re proposing a major remodel in hopes of getting a variance to waive parking,” he explained. “That’s not the norm, that’s not standard practice, but there was a unique circumstance in this case.”

Red Dragon construction 2018

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Photo by Mary Hurlbut

The Red Dragon project under construction in 2018

They built the structure “exactly as it was approved” in 2016, said project architect Jim Conrad. They didn’t demolish or construct any more than allowed, he added. 

They were simply “caught in the middle” between the city and the CCC disagreeing on their interpretation of what constitutes a major remodel, he said. 

Pursuant to city code, because the project is now considered a major remodel, the building must be rebuilt in conformance with zoning regulations pertaining to the building height, open space and setbacks and the property owner/applicant will need to provide all required parking or purchase an equivalent number of spaces, as required by current regulations. That’s what was before the council this week.

The biggest area of concern during Tuesday’s discussion was parking.

The previous structure was grandfathered with 118 parking spaces based on the prior use of a restaurant and nightclub (previously, the building was a Masonic Temple with 169 grandfathered parking spaces), Caron said. 

Today, the parking requirement for a restaurant is one space per 100 square feet of gross floor areas or one space per every three seats, whichever is greater. The overall proposed restaurant, patio and deck areas total 10,346 square feet with 197 seats. Therefore, the square footage generates the higher parking requirement, which has been calculated to be about 104 spaces.

As part of the initial approval in 2016, council included a condition that required a minimum of 30 off-site employee parking spaces be leased at the church at 340 St. Ann’s Drive. The applicant still intends to comply with this condition, Caron noted, however a variance is required because it’s now classified as a major remodel and no on-site parking is provided. 

The applicant also hired a transportation planning and traffic engineering firm (Linscott, Law and Greenspan) to prepare a parking demand study. The report found that the demand for restaurants in mixed-use neighborhoods are typically up to 50% less than what the city code requires. Recent studies also show that rideshare opportunities can reduce the overall parking demand of bars and restaurants by 80%. Based on the more conservative 50% reduction, parking could be reduced to 52 spaces, Caron explained. 

“Although the parking study notes that there would not be any additional parking demands created in comparison to the previous restaurant, staff believes that there could still be impacts to the surrounding neighborhood,” the staff report reads. 

After reviewing this recommendation, the applicant revised the parking plan to provide 52 valet parking spaces off-site. The plan includes 42 spaces (some stacked) at the rear of the nearby church parking lot at 340 St. Ann’s Drive and 10 spaces after 5 p.m. at Coastal Azul parking lot, across the street from the restaurant at 689 South Coast Highway.

There needs to be a workable valet plan with logistics, Whalen said. 

He noted that something along the lines of 52 customer spaces plus 30 for the employees is acceptable. They’ve all seen employees park in the neighborhoods, Whalen said, so employee parking needs to be “locked down” and required during all work hours. 

The parking plan included draft letters of intent for these parking areas. The applicant also proposed a shuttle service for off-site employee parking and is in the middle of finalizing an agreement.

They’ve had discussions with the church, Coastal Azul and the nearby First Team buildings, Conrad said. They are also looking at parking employees on public lots outside the city and shuttling them in.

After receiving direction from council on Tuesday regarding how many spaces they need to plan for, they will work on finalizing the contracts, Conrad said. 

“We’re confident that the parking mitigation plan that we proposed will allow for the parking that we need to operate the restaurant,” Conrad said. 

While city staff believes the parking management plan will help mitigate the impacts to the surrounding neighborhood, not all customers will utilize them and therefore staff recommended the seat count be reduced from 197 seats to 150.

After the staff report was published, the applicant requested an 8 a.m. opening time and an increase to 197 seats after 6 p.m. 

Whalen suggested setting the seat count – for the time being – at 150 (with no increase during the evening hours). There could be some flexibility to return to council for an updated review if it’s working out, he added. 

The applicant would like to open earlier in the morning in order to offer a dim sum breakfast, Conrad explained.

Although councilmembers agreed to wait and see how parking for the 11 a.m.-10 p.m. works out before approving earlier hours.

“Let’s start with that and if it’s going well and parking is working, they can come back and talk about breakfast,” Whalen said. 

There were also several items included in the item for design review: Privacy screens and two permanent umbrellas on the upper level, a new window installed near the trash service area and the revised location for the rooftop equipment.

Red Dragon restaurant project current close up

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Photo by Mary Hurlbut

People walk by the building for the proposed Red Dragon project 

On behalf of the applicant, Chelsea Zhao read a translated message from her father, Enshan Zhao, the property owner. 

They came to Laguna Beach in 2013 so she could attend school. Chelsea Zhao is now earning her master’s degree at Chapman University. Enshan Zhao returned to China to tend to his business and was unable to return until August 2021.

“During that time our neighbors were very sweet to Chelsea and they treated her like extended family,” she read from her father’s letter. “I was so grateful for the community support.”

He came up with an idea to open a restaurant in Laguna Beach as a way to give back to the community that was so kind and welcoming to both of them.

During public comment, one speaker noted the positive service the restaurant will bring to locals in the off-season. Others supported the work on the building as a welcome improvement.

It’s a great looking building, said resident Pat Gallis, who walks by the location almost every day.

They did a good job figuring out the parking and opening at 8 a.m. would be “fantastic,” he said, since there are few places in town to get a breakfast like that. It’s a great concept, he added. 

“’Let’s move forward and move them in,” Gallis concluded. 

Although there was some concern that the plans weren’t ready to go.

Several speakers noted that there is a mutually acceptable solution, but that the project isn’t quite there yet. 

“At this point, it’s not fully baked and I think it should go back to the Planning Commission to go through that process as the right vetting tool to be used,” said Louis Weil. 

It’s mainly about finding out the details around the parking, he noted. All the businesses in the area continue to use the same parking lots, but as long as it’s mapped out, organized, and in accordance with city code, then it should work out great, he said. 

Weil suggested utilizing new technology to support the business in terms of local transportation, free rides and other services to get people to and from the property.

Local resident Kurt Wiese said he lives near the restaurant and represents a group of neighbors. They’ve submitted a few letters detailing their concerns, he said. 

“We agree it’s a good project and we’d very much like to see the restaurant open,” Wiese said. “But we don’t want the restaurant to negatively impact our neighborhood.” 

Parking is the big consideration here, he emphasized. 

“I’m sure this can all be worked out,” Wiese said. “I’m very confident that – given enough time – there is an acceptable solution out there, but we’re not there yet.”

Parking locations are still being identified, he noted, and nothing in the city code says that a reduction is allowed if a parking study shows that the typical demand is less than what’s required. But staff used that reasoning to reduce the requirement by 50% and recommended only 52 spaces. 

The 52 customer spaces in addition to the 30 employee spaces is a number they can live with, he later added.

“But…it still remains a moving target,” Wiese said. “There is no solid plan, at this point, for identifying specific parking spaces and until that’s done, I don’t believe that it would be appropriate for you to approve the conditional use permit.”

The fact that it is still a “moving target” underscores that this matter should be in front of Planning Commission, where those details would be worked out, he added. 

Typically, the Planning Commission considers/grants variances, but if a project was last heard by the council the standard practice is that it returns to the council, Wiener noted after a few other speakers mentioned sending it back down to the commission. 

Other concerns mentioned during public comment included the occupant load, that the study was commissioned by applicant and is outdated and flawed, that the 50% reduction is arbitrary, and the changing number of seats and required parking spaces.

The discussion also emphasized the overall parking issues in town.

A lot of buildings in town don’t have the capacity to host enough parking on-site, Whalen noted. 

“This just underscores the difficulty we face, really, throughout the community with respect to parking,” he said. “That’s the whole bigger issue we’re going to have to wrestle with, which is: How do we deal with off-site parking and make it work?”

They can’t take the parked vehicles out of the neighborhood if they don’t give them someplace to go, Mayor Sue Kempf said. The town is already built out with no extra space for more parking, she noted, so they’re going to have to build parking. Putting a few here and there doesn’t work, she added. 

“This does highlight the need to do something about parking,” Kempf agreed. “We always go through these gymnastics…You’re always trying to figure out what to do with parking because we have no parking.”


Sara Hall covers City Hall and is a regular contributor to Stu News Laguna.

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