Laguna Council Approves 10-Year Visit Laguna Contract Amid Community Debate
- LBCA Staff
- 12 minutes ago
- 4 min read
Residents had sought shorter term; new stewardship fund comes with oversight requirements and arts funding cuts
Laguna Beach’s City Council voted 5–0 on June 10 to approve a ten-year renewal of the city’s Tourism Marketing District (TMD) agreement with Visit Laguna Beach, the city’s official tourism promotion agency[1]. The long-term deal keeps the 2% lodging assessment in place and directs the revenue toward marketing as well as local culture and stewardship programs. The city expects the district to generate roughly $3 million in its first year (about $36 million over ten years)[2] “the city’s largest commitment to the tourism marketing district to date”[3]. Council members and hotel owners argued that this stable funding is needed for multi-year projects such as artist housing and infrastructure. At the same time, the final agreement wonks made in by council insist that any future fee hikes above 2% need city approval, that some Visit Laguna board seats be city‑appointed, and that biannual performance reviews and public reports be conducted to track results[4].
Calls for Shorter Contract and Oversight
After an especially busy 2024 season, residents have aired strong concerns about overtourism, from traffic jams to overflowing beaches[5]. Many locals say Visit Laguna’s previous five-year contract was underwhelming, noting that its marketing campaigns stressed day-trippers and beach tourism rather than boosting overnight stays[6][7]. At public hearings, commentators repeatedly urged a much shorter renewal. One resident, Aaron Peluso, told the council he was “in favor of watching what Visit Laguna is doing next year and not in 2036,” reflecting calls for a 2- or 3-year term with annual reviews[8][9]. Arts advocates also spoke up: a former mayor warned that cutting arts funding by even a few percentage points would weaken Laguna’s cultural base as the city tries to build a new tourism strategy[10][6]. In sum, opponents of the 10-year deal say it removes the usual accountability mechanisms, locking the city into a decade-long contract that many doubt the bureau can justify.[6][9]
New Cultural and Environmental Stewardship Fund
A centerpiece of the approved deal is a new Cultural and Environmental Stewardship (CES) program. Laguna Beach will receive an initial $260,000 payment to launch the CES fund, followed by $500,000 each year thereafter[2]. In practice, roughly 25% of the TMD revenue will go into this stewardship fund, while Visit Laguna uses another 25% for marketing and 10% for its own administration[11]. To accommodate the new CES category, the shares for local arts and cultural organizations have been cut. The Laguna Art Museum, Laguna Playhouse, Laguna College of Art & Design, the Arts Commission and other grantees each go from 10% of revenue to 8% by the second year[12]. Critics note that shifting this extra ~20% of total district revenues (on the order of $300,000 per year) out of the arts means those dollars now flow into environmental projects and artist-housing efforts.
Canyon Property Purchases and Financial Links
Laguna Beach last year agreed to pay $8.65 million for two industrial buildings in Laguna Canyon (2307 and 2535 Canyon Road) to preserve affordable artist live–work units[13]. Some residents point out that Visit Laguna’s new funding commitments ($500,000+ per year through downtown and stewardship programs) conveniently match the cash flow the city needs to finance those canyon acquisitions. For example, Visit Laguna agreed to a one-time $500,000 Downtown Improvement Fund contribution (split into a $200k and $300k payment in FY 2024‑25) and $500,000 annually thereafter – all contingent on the TMD renewal[14][15]. This has led to speculation that the ten‑year tourism deal was effectively structured to fund the land purchase. Critics say linking the long-term contract to city real-estate plans demands scrutiny, especially since the full details emerged only in staff reports late in the process.
Legal and Transparency Questions
Some observers also warn of potential legal issues under California’s Proposition 26, which treats many business “fees” as taxes unless the payer receives a specific, direct benefit. In theory, lodging fees can be used for tourism marketing or services that benefit hotels, but spending them on broad arts grants, artist housing or community infrastructure could blur that line. No court case has been filed yet, but critics argue the council should be cautious. Additionally, the process drew fire for its opacity: several residents complained that the contract’s funding shifts and the Downtown fund were first disclosed only in the April/June city-council agendas. Many say there was little time for community input on these complex financial linkages before the votes.
Sources: City of Laguna Beach council meeting materials and staff reports, and news coverage[2][4][13][5]. Each quoted claim is backed by official or media sources.
[1] [4] [6] [15] CitizenPortal.ai - Council approves 10‑year renewal of Laguna Beach Tourism Marketing District after adding oversight and minor edits
[2] [3] [7] [11] [12] Visit Laguna Beach names Joanna Bear as president and chief executive - Los Angeles Times
[5] City of Laguna Beach reviews summer operations, mulls next steps - Los Angeles Times
[9] CitizenPortal.ai - Laguna Beach City Council reviews 10-year tourism marketing district renewal plans
[13] Laguna Beach agrees to $8.65-million purchase of canyon properties - Los Angeles Times
[14] Council to consider agreement with Visit LB 110824 - Stu News Laguna
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