A History of Laguna Beach, Florida
by Theron Franklin Taylor

Neither Panama City nor Bay Country existed until the early 1900s. Once a wilderness inhabited only by the Creek Indians who were eventually driven off their land by white settlers, Panama City did not emerge as a community until the late 1800s. State legislators carved Bay County from portions of Washington and Calhoun Counties on April 24, 1913. Well into the 1900s, most of the activity in the area was centered around St. Andrews Bay and its many arms, bayous and creeks. Before this, the areas east of Pensacola had been explored by Spanish and French explorers.

Development in the panhandle, particularly in the area that would become Panama City Beach, began in St. Andrews which early-on became a port for early explorers, traders and settler. In 1932, a businessman named J. E. Churchwell purchased Long Beach Resort from its original owners, W. T. Sharpless and Hubert Brown, for $10,000 and the beaches to the west would never be the same.

Laguna Beach was established and named in 1935 and the earliest commercial development on the West End occurred around this time. The first significant commercial development was the construction of the Seabreeze Hotel near what today is “the Y.” The Holloway family purchased their eight-acre plot for the hotel for $2000 and it boasted the only hot and cold running water on the beach. It opened in 1937, two years after Laguna Beach was named and recognized as an individual entity. Additional development on the west end was sparked by the completion of the Coastal Highway (eventually U. S. 98). Until then, the highway was only a dirt and gravel pathway through the sand dunes.

Laguna Beach Arrives

Joseph Broderick Lahan, a businessman from Birmingham, AL, is credited with the first commercial development at Laguna Beach. Residences, mainly bought and built by interested entrepreneurs from Alabama, Georgia and the panhandle area, were already beginning to materialize. He purchased more than half of the land all the way west to what today is Santa Monica Beach. Some land (Santa Monica) he eventually sold. Lahan named Laguna Beach after the more famous California community. He filed a plat for the lands which he purchased in August of 1936 including the land on the south side of the old Coastal Highway. He filed a geographic survey of the area in 1936. Shortly thereafter, a building boom occurred at Laguna.

His desire was to build a well developed, viable community so that his friends and family in Birmingham could share in the beach lifestyle in a designated area.

Around 1938, he established a real estate office and visitors center. A windmill and water tower served as the basic infrastructure. A building on the south side of the highway, in front of what eventually became The Seahorse, was established for Sunday School and worship. Lahan built the Seahorse Motel in 1940 and it immediately became a travel destination for growing, interested parties to the north. A café and snack bar came shortly thereafter. It served breakfast beginning at 7 a.m. and offered take out dishes for those on the go. The café became a popular spot with the younger crowd. He opened a grocery store which offered meats, drinks and other grocery items as well as a gift and souvenir shop and he sold beachwear. Kiosks, day tents and colorful, beach umbrellas became more and more evident during this time period with the expanding popularity of Long Beach and environs west. 

This grocery store grew into a thriving business. Lahan sold his Seahorse Motel in 1945 to a man named Grier C. Barnhart who changed the name to the Yacht Club. Barnhart changed the main focus of the old edifice to one that dealt a community center feel to the structure with dancing, a lounge, shuffleboard and other activities. The Yacht Club on the West End became the place to see and be seen. Dances were sponsored regularly. It was considered chic to be at the Yacht Club with its wooden floors, padded red adornment, polished wood-top bar and great views of the emerald green waters and sugar white sands of the beach across they way. The Yacht Club eventually became the Seahorse, a grocery store then a lounge---or bar---and later it was sold once again.

World War II and Laguna Beach

Development at Laguna, both residential and commercial, was seriously curtailed with the growing threat of the winds of war from across the Atlantic. When the war broke out in 1941, U. S. Coast Guard troops patrolled the beaches. They watched the Gulf of Mexico in the area for German submarines, U-boats and potential saboteurs, which never materialized. The Coast Guard used the old Seabreeze Hotel about two miles east of the Yacht Club as its headquarters with a substation at the Yacht Club in Laguna Beach. The loft of the Yacht Club became a lookout tower with maps, strategy notes, war graffiti and sketches on the walls and floor of the area. Money and gasoline were tight during the war years until about 1946 and there was a dramatic lull in beach activity and development.

When the war ended, renewed interest in the beaches grew and Laguna Beach again became a destination of choice for returning war heroes and their families.

The Beach Reserved

When Lahan filed his original plat for the area in 1936, his plan was to develop the entire area with both residential and commercial establishments on both sides of U. S. 98, now a federal highway. Around 1946, owners of land and residences on the north side of the highway became concerned that their grand views of the beaches and the Gulf of Mexico, not to mention their access to them, would be destroyed forever if structures were built on the south side. This land, which Mr. Lahan owned and was planning to sell as individual lots for buildings and houses, was prime real estate for such development --- and the north side land owners knew it. Led by W. J. Boothby, Robert E. Taylor, A. Y. Malone and Grier C. Barnhart, they banded together as a community action group around 1946 to plan a strategy, which might prevent such development so that their views and access to the pristine beaches across the way from their properties would not be changed forever.

They sought an injunction against Mr. Lahan and his Gulf Properties of Alabama in the 14th Judicial Court in Bay County in 1947 to reserve the beaches and to stop development on the south side of U. S. 98. Initially, the court ruled as follows:

“…that the words ‘beach reserved’ appearing on the plats of Laguna Beach filed by the defendant…are hereby declared to mean that the land to which said words apply were kept back and withheld from dedication by defendant (Gulf Properties/Lahan)… and the plaintiffs (Boothby et als) have no rights therein …the prayer of plaintiffs for an injunction be and is hereby denied.”

The ruling in the Bay County court was a victory for Lahan and Gulf Properties of Alabama, Inc. The plaintiffs, however, refused to lose. They appealed the decision of the lower court to the Florida Supreme Court and won. The Supreme Court of Florida compelled the lower court to revisit their l947 decision and to issue a decree that would favor the plaintiffs request and reserve the beach.

In l949, the 14th Judicial Circuit Court of Bay County revisited the 1947 decision, redefined what the words ‘beach reserved’ meant, and under orders from the Florida Supreme Court reversed their 1947 decision. The 1949 decision, which became known as the Boothby decree, read in part:

“That the meaning of the words ‘beach reserved’ on the plats of Laguna Beach, a subdivision in Section 11, Township 3, South, Range 17 West in Bay County, Florida, which plats were made by the defendant, Gulf Properties of Alabama, Inc., and dated January l, 1937, and April 26, 1941, are on file in the office of the Clerk of the Circuit Court of said County, and that the area designated by said words “beach reserved” is reserved as a beach for the use of the owners of lots in said subdivision for recreational and bathing purposes without interference or hindrance by the defendant, and without any buildings or structures being built or created thereon.

That the said area designated “as beach reserved” is not reserved for the private use of the defendant and said area shall be kept open and no building or structure of any kind shall be built or erected thereon.

That the defendant, Gulf Properties of Alabama, Inc., a corporation and its servants, agents and employees, and each of them, be, and each of them are (sic), hereby perpetually enjoined and restrained from erecting or building, or causing to be erected or built, any structure or building on said area, and from using said area for any purpose other than recreation and bathing for the benefit of the owners of the lots in said subdivision.”

A final consent decree reinforcing the 1949 decision from the 14th Judicial Circuit Court was issued September 26, 1951, after Lahan and Gulf Properties made one final plea in the way of a complaint to regain all exclusive rights to the south side property. The court, in this case favored the defendants, I. R. Jenkins, Rufus M. Lackey, Lucylle F. Brown, G. C. Barnhart and D.G. McQuagg, as Tax Assessor of Bay County. The matter was forever settled.

The 7/10 of a mile, 4,000 linear feet section at Laguna Beach that is undeveloped on the south side of U. S. 98 would remain ‘beach reserved’ forever. Years later, the Bay County Zoning Commission added even more punch to the final Boothby Consent Decree by designating the property a conservation and recreation zone. The fate of the pristine dunes and beaches were forever protected from any development, though the Lahan family and their Gulf Properties of Alabama, Inc. still owned the property. This final consent decree made the major part of Laguna Beach along the Panama City Beaches one of only four which would forever allow and provide an open view of the dunes, beaches and Gulf of Mexico from the ever-increasing traffic along U. S. 98. The others are Sunnyside, Santa Monica and Bid-a-Wee Beaches. The owners in these latter three subdivisions actually owned the property on the south side, whereas property owners on the north side of the highway at Laguna Beach retained only the pre-described rights contained in Boothby.

It is most significant to note that the four beaches mentioned above are the only areas of the Panama City Beaches, from Thomas Drive and the Hathaway Bridge to Phillip’s Inlet, are and always will be the only areas where development will never be allowed on the south side of U. S. 98 (Front Beach Rd.).

… And the Beach Goes On

Commercial and residential development, east and west of Laguna Beach, proliferated from the 1950s forward. Business establishments were built such as the Blue Dolphin Motel, the Seakove Court, Pineapple Villas and George Thomas’s Ice House . The old Seahorse Café and Grocery Store was remodeled and renamed the Carousel in the early l960s by Charlie Lahan. It had its own post office, gift shop and eatery. Thomas’s Ice House was turned into a restaurant and donut shop under the name, Thomas’s Donut and Snack Shop later. 

There also was sentiment among Panama City Beach authorities to annex the west end of the beaches all the way to Philips Inlet at the Walton County line. Many property owners formed the West End Stop Annexation Committee (WESAC) to fight such ideas and annexation was placed on the back burner in the City partially due to these objections. 

Panama City Beach extended its sewer lines underground along the south side of U. S. 98 as well as PCB water lines and service on the north side. Most residents remained contented with their septic tanks since their properties were on the north side and the cost of connecting to the sewer service of the city was expensive. The water supply was not an option for property owners. Alternate U. S. 98, which later would be named the Panama City Beach Parkway or, as the locals called it, Back Beach Rd., was built through Laguna Beach proper, about five blocks north from front U. S. 98. It was a huge factor in reducing the ever-increasing traffic flow along front U. S. 98. 

Tourism along Laguna Beach, though mostly residential in nature, exploded with the advent of such phenomena as Spring Break, Bikers Week, Seafood Festivals and a myriad of other special activities designed to draw money interests and would be property owners to the area.

The Laguna Beach Property Owners Association

In the late 1970s, Mr. Charles B. Lahan, son of the founding father of Laguna Beach, Broderick Lahan, decried the option of paying the taxes on his land (the reserved beach) on the south side of the U. S. 98 for personal reasons. Even though he still owned the property dedicated ‘beach reserved’ by the Boothby Consent Decree, he would never be allowed to develop it.

A group of property owners, led by Mike Thomas, son of George Thomas and who would later become a Bay County commissioner, and Mr. Burl Johnson organized the Laguna Beach Property Owners Association in 1982. Their primary purpose was to assume the payments of the taxes on the reserved beach and protect the Boothby Decree. 

They assumed the tax lien on the highly valuable property and met annually. The annual tax bill for the reserved beach was approximately $3,000 a year and generally fluctuated very little. The first president of the association was Mike Thomas. Membership grew once to nearly 1,000 property owners residing at Laguna Beach or owning property there. The average number was around 700. Over the years, the association was responsible for beach signage, delineating provisions for the public use of the reserved beach property, “turtle lights,” to protect beach wildlife, beach water sampling requested from the state environmentalists and the association annually addressed concerns of property owners and members alike regarding the reserved beach.

Laguna Beach 2000's

In 2004, a developer from Birmingham who owned Land Lease Conservation, Inc., sought to purchase the Carousel Grocery Store as well as the 4000 linear feet that was and is the reserved beach for around $35 million. The Carousel, under the deal, would be moved to another Lahan property on back U. S. 98 and, ostensibly, the property on which the Front Beach Rd. grocery story was located, would be developed into a condominium. About this time, condominium development and property values along all of Panama City Beach including Laguna were soaring.

In order to close the deal, the land on which the Carousel Grocery was located would have to be rezoned by the County Commission to accommodate the necessary height adjustment required to build a high rise condominium on the site. Mr. Lahan, along with many property owners who had hopes of selling their properties for fabulous prices, properties which would also have to be rezoned commercial, appealed to the County Commission in the fall of 2004 for the rezoning allowance. Mr. Lahan was granted his adjustment to the height requirement restrictions while the private property owners of residences were denied. This created a furor among the residential owners who had dreams of sudden wealth—especially in light of the positive ruling from the County Commission for Mr. Lahan, whose request for an adjustment was granted.

But all was for naught. In the fall of 2004, the owner/developer of Land Lease Conservation, Inc. revisited his decision to make the super purchase of the Carousel and reserved beach. When he realized that he would never be able to develop the south
of U. S. 98 which was the reserved beach---only the land on which the Carousel Grocery Store was located on the north side--- the deal fell through. There was also confusion about just how much of the land to the east of the Carousel Mr. Lahan actually owned,
land that was once a lake bed . This land was challenged in a lawsuit. Eventually, the entire purchase package fell through. 

Later the old Seahorse was sold and torn down and the land on which it had been situated for many years, since about l940, became a residential development called Laguna Shores. Many locals were glad to see the Seahorse go since it had fallen into a state of disrepair as well as disrepute.

Other potential development stopped such as the proposed Mayan Condominium, which was to be built on the property that was the old Blue Dolphin Motel. The motel was demolished in 2007 but as of January of 2009, the construction of the Mayan had not begun. 

In the fall of 2008, there were no “high rise” condominiums on Laguna Beach. A proposed high rise called Breakwater Beach was to be developed on the site where the old Seakove Court once stood. Construction started after the Seakove was sold then demolished. The construction suddenly stopped in 2007, possibly due to the declining sale of already overdeveloped condominium units from Hathaway Bridge, through Laguna Beach to Philips Inlet. To say real estate sales and land values in Laguna Beach tanked beginning in 2006 was an understatement. This phenomenon was much in step with real estate values not only in Laguna, Panama City Beach, the state but the nation as a whole. Many people who had purchased property for bargain basement prices along the beaches before 2004 and beyond in the hope of reselling later at a hefty profit were drastically disillusioned if not crippled with the decline of property values in 2006 and beyond. But Laguna Beach still remained a popular place to visit and even settle down well into the 2000's.


Images of America – Bay County. Ellen Cvitkovich. (2000) Arcadia Publishing

Along The Bay: A Pictorial History of Bay County. Marlene Womack. (1994) Pictorial Heritage Publishing Company. 

Interview with Charles B. Lahan, September 2008 

Images of America – Panama City Beach. Jan Smith (2004), Pictorial Heritage Publishing Company.

Consent Decrees. 14th Judicial Circuit Court of Bay County, Florida. (1947 ,l949, l951). W. J. Boothby et als, vs. Gulf Properties of Alabama 

Ltr. , Diane Brown. October 2008. “What Are You Doing To Protect Your Community From Bad Development?”

The Panama City News Herald.

Personal affects and recollections of the author of this history, Theron F. Taylor. 

By Laws and Rules of the Laguna Beach Property Owners Association.