The cancellation of a popular Laguna Beach event, held annually on Festival of Arts grounds by the local chamber of commerce, is one more casualty of an acrimonious battle between two Orange County titans that’s impacted numerous local properties.
Officials with the Laguna Beach Chamber of Commerce, organizer of the annual Taste of Laguna food and music festival, recently announced the Oct. 1 gathering would not be taking place.
“Due to unforeseen circumstances, we are unable to move forward with this year’s event,” they wrote on the event’s website. “We sincerely apologize for any inconvenience or disappointment this cancellation may cause.”
While no further details were provided by the chamber, whose members did not respond to multiple calls and emails seeking comment, President and Chief Executive Brittany Ganson told the author of local Substack “The Best of Laguna Beach” it stemmed from an “alcohol licensing issue.”
The city-owned festival grounds, operated through a master lease by the nonprofit organization, effectively lost its ability to sell alcohol due to the closure of the on-site restaurant Terra Laguna Beach at the end of the 2025 summer season, spokesperson Sharbie Higuchi confirmed via an email interview Friday.
A database maintained by the state Department of Alcohol and Beverage Control indicates the restaurant’s license allowed for the sale and consumption of beer, wine and spirits both at the site and on properties adjacent to the premises, including the wider venue.
That license was suspended in April due to back taxes owed by the business, according to the agency database. But the owner of the eatery says he’s not the one who should be paying.
An alleged takeover 
Mohammad Honarkar stands behind Hotel Laguna on Wednesday, Nov. 5, 2025.
(Christina House | Los Angeles Times)
Laguna Beach businessman Mohammad Honarkar opened Terra Laguna Beach in 2017 through a sublease with Festival of Arts. One year later, he undertook $5 million in tenant improvements and signed a 10-year lease, with options for two five-year extensions, to become the exclusive food vendor for the site and its many events.
Although that plan was halted during the pandemic, the eatery opened for the 2022 summer season and was readying for a return in June 2023, when, Honarkar alleges, Festival of Arts officials ousted him, turning over management of the restaurant to MOM CA Investco LLC, a joint venture he’d previously formed with Corona del Mar investor Mahender Makhijani, but which had no ownership interest in Terra Laguna Beach, Inc.
“On June 30, [MOM CA] attacked overnight and took over the place,” Honarkar said in an interview Friday. “[Makhijani] was OK for a year or two, but then he didn’t pay the bills.”
The alleged takeover came at the height of a dispute between Honarkar and Makhijani that has garnered numerous news headlines, most notably after the two individuals and their respective armed security details scuffled at Hotel Laguna in 2023 and again this June, after Honarkar won a $1.34-billion arbitration award against Makhijani.
Makhijani was arrested June 10 by federal authorities for alleged bank fraud involving a $100-million loan default associated with the partnership, which resulted in MOM CA’s filing for bankruptcy in 2025. He is currently in prison without bail awaiting trial, after a judge determined he’d issued a death threat to a witness.
Honarkar says he’s since been attempting to recover from the loss of a combined $483 million in Laguna Beach properties and generally rebuild his life.
“I’ve been here since 1980,” he said. “I raised my kids here, they went to school here and now my grandkids go to school here — I love this town.”
But the story doesn’t end there.
Eviction notice overruled 
Guests enjoy a makeshift “Courtside Kitchen” on a tennis courts adjacent to the Festival of Arts during VIP night of Pageant of the Masters show this summer.
(Don Leach | Staff Photographer)
Unable to otherwise sell alcohol during this year’s summertime programming because of the closure of Terra Laguna Beach, Festival of Arts shifted gears, hosting a pop-up restaurant on a tennis court near the restaurant with support from the nonprofit Laguna Public Recreational Facilities Conservancy.
Called “Courtside Kitchen,” the makeshift venue offered guests cafe bites, handcrafted meals with a full bar and a VIP experience from July 1 through Aug. 30.
While the substitution ostensibly sufficed, the future of Terra Laguna Beach remains up in the air as the business is at the center of another dispute — an attempted eviction of the restaurant from the festival grounds by the Festival of Arts board of directors.
On Feb. 12, Festival officials issued a three-day notice to quit or pay rent, claiming restaurant ownership had failed to pay $33,333 in rent for January and February. After the notice went unanswered, the organization submitted an unlawful detainer filing in Orange County Superior Court on Feb. 23.
Honarkar responded in April, calling the notice an act of retaliation and explaining he’d been barred from the property since June 2023, when management was transferred to Makhijani, who subsequently changed the locks.
“Terra, through Honarkar, consistently informed plaintiff that Terra was not part of the alleged joint venture and that plaintiff had no lawful basis to transfer or recognize control of Terra in Honarkar’s purported joint venture partners,” his filing states.
“Plaintiff nevertheless ignored those warnings and in 2023 gave control of Terra and the subject premises to those third parties … Plaintiff therefore cannot create the very condition that disrupted Terra’s possession and operations, then rely on that condition as a basis to dispossess Terra.”
Orange County Superior Court Judge Jennifer McCartney sided with Honarkar in a July 28 ruling, determining that because Festival of Arts officials did not restore possession of the property, Honarkar was not obligated to pay rent.
“Accordingly, the three-day notice to pay rent or quit demanded rent that was not legally due,” McCartney reasoned. “The notice is invalid, and plaintiffs cannot maintain this unlawful detainer action based upon it.”
Insisting that Festival of Arts did not restrict Terra Laguna Beach, Inc.’s access to the facility, Higuchi said Friday that keys to the site were tendered to the owner on Aug. 4.
“The Festival of Arts’ goal is for the restaurant to be operational for next summer’s Festival of Arts and Pageant of the Masters,” she wrote in her email to The Pilot.
But until the back taxes to the state are paid — in the amount of roughly $400,000, according to Honarkar’s calculations — the restaurant’s alcohol license is expected to remain suspended.
“Either Festival of Arts or the city of Laguna Beach need to write a check for $400,000 to clear the license,” Honarkar said.
“Once the license is clear, Mohammad Honarkar is ready to reopen immediately,” he said.
