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Subway Beach Café gets second chance at downtown location after commission continues project amid concerns about allowing franchise


After nearly two hours of discussion, a permit applicant that went “above and beyond” was still struggling for approval after planning commissioners deemed the restaurant too formulaic with its parent franchise brand, Subway, for a business downtown. 

Although, commissioners were torn considering other factors like the applicant’s strong community presence, his effort to distance the project from its parent brand and make the design fit in with Laguna Beach and the service it would bring to the neighborhood. However, it’s still a formulaic/franchise business and the merchandise (food items on the menu) isn’t unique enough, several conflicted commissioners agreed.

“There are a lot of reasons to want to feel good about this,” said Chair Steve Goldman. “The only reason not to at the end of the day: It’s a Subway. It’s the same food and the same quality, just dressed up really nicely.”

The Planning Commission ultimately voted 5-0 to continue the item until their February meeting to give the applicant more time to customize the menu. The applicant was seeking a Conditional Use Permit and a Coastal Development Permit to convert 381 Forest Ave., Suite A-100 (previously Catmosphere) to Subway Beach Café.

Sandwiches on the proposed one-of-a-kind menu would be named after local landmarks and events, including the Thousand Steps Club, the Laguna Tuna and Main Beach Marinara. 

“The makeup of those sandwiches is unique, not something you will find on a traditional Subway menu,” said applicant Daniel Riscalla. “It wasn’t just renaming certain sandwiches; it’s actually coming up with new sandwiches that will be unique (to Laguna).”

As proposed, the location would offer farm-sourced, handcrafted beverages and freshly baked pastries. The juices will include combination flavors like watermelon and cucumber or passion fruit orange guava.

The design is aimed at casual dining with couch seating and a cozy atmosphere, explained Principal Planner Martina Caron. Live acoustic entertainment would be offered on Friday and Saturday.

Specifically, the central features of the restaurant would include a bar height communal table with stools, cushioned seating, wall murals painted by local artists and a large digital display screen that would show slides of Laguna Beach and its history. The display would also be available to Laguna College of Art + Design students and local digital artists to show their work. 

The front and back counter of the store would feature a modern rustic look, Caron said. Any use of a Subway logo in the interior would be minimal and subtle, she noted, and the primary use being a brushed metal “S” logo. 

Employee attire would also be unique to this location, featuring black pants and white shirts, and aprons with a simple two-tone logo either black and white or black and green.

Subway Beach Cafe interior rendering

Click on photo for a larger image

Courtesy of City of Laguna Beach

A rendering of the proposed interior of Subway Beach Café

“This is really a one-of-a-kind restaurant, we’re really excited about this,” Riscalla said.

They’ve worked closely with staff to customize the location for downtown Laguna Beach, he added. A non-conventional Subway like this needed additional approvals, he explained. The family also owns a Subway café in Orange, although each location is individually customized. 

“The result is a unique restaurant that is unlike any other Subway,” Riscalla said. “It will fit seamlessly into the Laguna Beach downtown atmosphere and will be tailored to all of your requirements for this area.”

They have been part of the Laguna Beach community for many years, he pointed out. The previous Subway location at 1350 S. Coast Highway opened in 1992 and they took over in 2010. At that location, they offered mobile-based ordering and delivery and, during the pandemic they created a Subway grocery plan. They also participated in a number of local events over the years. 

Several commissioners noted that Riscalla is a respected community member, as well as several public speakers who commented on the positive impact he and his family, and their previous local business, have had on Laguna Beach.

Some commissioners also pointed out the benefit of having fast and affordable food in the area for city hall employees and other workers within walking distance.

There’s a need for something like this in the downtown, said Commissioner Ken Sadler. 

“We don’t have a less expensive option, there are very few in downtown and in Laguna in general,” he pointed out. 

They provide a valuable food service to the town, added Commissioner Steve Kellenberg, who noted that he often got a quick and affordable sandwich at the old Subway location. They’re actually “quite tasty,” he added. 

“To be able to have that service downtown, I think it is a contribution to the downtown,” Kellenberg said. “There’s an unmet demand for that type of cuisine on Forest Avenue.”

But it’s hard to overcome that the project falls short on the findings they need to make for approval, in terms of the policies that have been for regulating the types of uses downtown, he added.

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 They aren’t tasked with reviewing if it’s affordable or not, they have to look at how it improves the community according to the DSP, said Commissioner Susan Whitin.

“I don’t see how it enhances the destination quality of the downtown,” Whitin said, referencing the DSP’s development standards that aim to preserve and enhance the unique character of the downtown.

A lot of work has been put into the project, she noted. 

“The aesthetic, the appearance and the design are not formulaic in any way,” she said. “The applicant has done back flips, has done everything that the staff has asked.”

But, quoting a policy from the city’s Downtown Specific Plan, Whitin said they are directed to discourage formula-based businesses that fail to meet the criteria regarding the quality of unique merchandise.

The merchandise is not the aesthetic, uniforms, or drink cups or wrappers, she said, the merchandise is the food.

He has done “back flips” to try and create the village character from this franchise, Kellenberg agreed.

“Could they have gone farther? I think the only thing that’s left is the menu,” he said. 

It’s basically the same menu with some name changes, Kellenberg said. 

Asking about the ingredients to the specialty Laguna sandwiches and comparing menus to other Subway locations, Whitin said they aren’t that different. 

“I recognize that there are defined ingredients that the applicant has to work with, but nevertheless I think it’s a stretch to call these sandwiches specialty sandwiches,” Whitin said. “The names are specialty names, but that is not the merchandise and that is not the product.”

They are willing to make more radical changes to the menu, Riscalla said in response to the menu concerns. 

They can change the menu to anything they want, confirmed Subway Development Agent Bob Grewal. They can add sauces or cheeses, for example, and customize the menu individually to any store, he added, it’s very flexible.

They hadn’t zeroed in on the sandwiches yet because there were a number of other approvals they had to go through first, he added. 

“I can assure you, this is going to be a very unique store, one in a million,” Grewal said. 

Subway Beach Cafe exterior

Click on photo for a larger image

Courtesy of City of Laguna Beach

A rendering of the proposed exterior and signage of Subway Beach Café

Sadler was the lone voice of support for the project and ultimately helped persuade others to re-evaluate the project. 

After reviewing the staff report, Sadler said he clearly worked closely with staff, who likely informed Riscalla what he was up against. 

“There (were) so many potential obstacles and hurdles to this approval and the special findings,” regarding both takeout restaurants and formula-based businesses, Sadler said. “Obviously you guys knew what you had to try to do and I feel as though – in my opinion – you have done and you’ve done it the best you can.”

They’ve distanced themselves from a “typical” Subway and tried to make this location unique, he added, including downplaying the signage and giving the café a Laguna-focused name. While the building is in a prominent location, the storefront is subdued, Sadler added. 

“To get hung up specifically on how to differentiate these sandwiches from a typical sandwich, I don’t know how much (more) you can do,” he said, giving an example of how people customize their ingredients regardless of what’s on the menu. 

He’s been a positive member of the community, it’s a needed service and valuable addition in downtown, and the applicant tried to do everything they could to make it unique to Laguna Beach, Sadler concluded. 

There’s also no public pushback on the project, Sadler added, if it’s important to the community not to have a franchise in the downtown there would be emails and public commenters to fight against it. The only communication they heard was in support, he added. 

Changing his stance of opposition, Goldman summarized Sadler’s comments, and agreed that the project may not meet all the conditions as exactly laid out, but questioned if that has to strictly be the deciding factor. It may not meet the franchise standard, but he’s willing to overlook that in light of other considerations. 

“I don’t think it meets the standard, but I think there are other factors that outweigh the standard,” Goldman said. “The fact that it will provide something for the community that it’s lacking, the fact that it’s a good community member, and – most important – the fact that I think we have a responsibility to see business grow, as opposed to stores being empty.”

Echoing other points Sadler made, Goldman agreed that because it’s an interior location it won’t detract from the downtown character as much.

This led commissioners to discuss how strictly they are required to follow the policies in the DSP and whether or not they can determine if the “greater good” of a business’s impact on the community can prevail over policy discrepancies. 

Not all commissioners agreed if the “policies are the policies” as they dictate the downtown, as Commission Chair Pro Tem Jorg Dubin explained it. They either have to change the policies or follow them, he added. 

“Do you make an exception to the policy because of all the other mitigating factors? Or do you strictly adhere to the policy because that’s what’s in place? That’s a very dicey, fine line that we’re treading on right now,” Dubin said. 

And they need to be applied consistently, Whitin agreed. It’s not up to the commission to make arbitrary emotional or political decisions, she added. 

Some of the rules and policies have been in place for many years, Sadler said, questioning the reasoning for how strictly they were written and if they have the ability to slightly deviate.

Some commissioners also raised concern that this could set a precedent for approving franchises. 

“It’s a very tricky thing because we may be opening up a pandora’s box here that we can’t close,” Dubin said. 

But, several argued, if it did set a precedent, this applicant has clearly gone above and beyond, setting the bar very high for any potential future franchise projects.

Director of Community Development Marc Wiener noted that staff struggled with this project as well for all the same reasons the commissioners were mentioning. But they make recommendations on a case-by-case basis, he emphasized, and, rather than this setting a risky precedent, it could serve as a model of how a project needs to be unique and an applicant has to go above and beyond when justifying a franchise shop in downtown. 

Wiener also noted that they are working on updating the Downtown Specific Plan. The new version is getting away from regulating the merchandise, but instead protecting the downtown character by regulating storefronts, signage and branding.

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