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LETTER TO THE EDITOR

By Craig Alexander, Dana Point

I have lived in Dana Point since 1999. One of the first things I realized is property development is a hot button issue. Another thing I noted in 1999, which continues to today, are the numerous empty lots and sometimes rundown buildings in downtown Dana Point. Over the years, there have been several studies and many public meetings about how to create a better downtown Dana Point to attract visitors and make it a nice place for residents to enjoy a wonderful shopping and dining experience.

A few years ago, a prior city council led by now Assemblyman Bill Brough, spearheaded the city finalizing what is now called the Lantern District plans after dozens of public hearings at which all citizens of Dana Point were allowed to participate. The plan passed via city council votes, and the city has already spent over $18 million, plus millions of ratepayer dollars from the South Coast Water District, to implement the Lantern District improvements. Part of the Lantern District plan is to recoup part of those funds via development fees and increased property taxes.

Now, unhappy with a few development decisions by the City Council, some members of our community want to implement a ballot box zoning law called Measure H that would have the effect of halting development in the Lantern District. I call this the “Empty Lots Initiative,” because it would make development there so restrictive that no project could financially work, thus the empty lots would stay empty. An obvious result would be the city not receiving back many of the millions of dollars it spent under the Lantern District Plan from development fees and increased property tax revenue. This ballot box zoning measure is like taking a sledge hammer to a problem that needle nose pliers can fix. You might get the result you want but you will also destroy the object you are trying to fix.

If you do not like the City Council and their property development decisions, change the City Council. That is why we have elections every two years in November and term limits as well.

At the very least, before making such a drastic decision, I encourage my fellow Dana Point residents to go to the city’s website (www.danapoint.org) and click on the link to the Town Center Initiative Impact Report. You will find valuable information in that report, which I recommend you seriously consider prior to casting your vote for or against Measure H.

Some will argue that the Empty Lots Initiative provides for the city to grant variances to the ordinance by having the city attorney certify that the variance complies with Measure H. However a part of this proposed law provides for litigation by those unhappy with the city attorney’s opinion. They can challenge the variances granted and obtain an award of attorney’s fees from the city’s coffers. Since I am a litigation attorney who sometimes sues public entities, maybe I should like Measure H. However, I have enough to do, and as a resident and taxpayer in Dana Point, I do not wish the city to be subject to needless litigation.

I would rather see the Lantern District develop, the city recover some of the funds it has expended under the plan and use those funds for other improvements in other areas of Dana Point.

Please vote No on the Empty Lots Initiative—Measure H.

 

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comments (28)

  • 100% agree. I just went down PCH a few minutes ago. Friday early evening and literally not ONE person walking on the sidewalk. Restricting development to Measure H’s level is completely insane in my eyes.

    • More is not better, it’s just more. More to maintain, more to become dated, more tourists, less charm.

      Vote YES on H if you don’t want Dana Point to turn into Huntington Beach.

    • Long-Time Resident Reply

      If Measure H passes and is approved by the CC, it will undo the parking regulations approved in Sept, 2015, and make mixed-use development uneconomic. Using the figures in the Keyser Marston 9212 report, Measure H’s passage would result in the loss of from $4.2 to $4.7 million in one-time fees, and $673K/year in taxes at full build-out.

      So as an example, if it takes 30 years for full build-out, year 1 revenue loss would be about $4.45m/30 + $673K/30. Year 2 revenue loss would be $4.45m/30 + 2*$673K/30, etc. Add the numbers up and you get a loss to the city of $4.45m + 15.5*$673K, or $14.9 million. But the useful life of the LD is more than 30 years. Assuming a 60 year life, add another 30*$673K in lost revenue, which gives a total loss to the city of $35 million.

      I don’t think KM’s estimates take into account the projects already under construction (Raintree, Bevmo), and the non-mixed use development that would still take place if Measure H passes, so the above number is a little high. In addition, it’s not clear if KM’s numbers are based on constant 2016 dollars, so you would also have to apply an uncertain discount rate to convert the $35 million to a present value, resulting in an even lower, but still substantial, monetary loss to the city.

  • FrustratedwithDP Reply

    As a fairly new resident since 2005, I am so frustrated with the lack of development in Dana Point. This town has so much to offer visitors but instead all they see are vacant lots and run down buildings. Why would anyone stop? Everyone can see the traffic is heaviest on PCH which bypasses the best parts of this town. Interestingly how all of the Santa Clara residents are in support of Measure H …one of the more beautiful streets in our town…no vacant lots there…The old, lucky, real estate wealthy residents here have no vision for the rest of the town.

  • Lifelong, please wake up. Measure H hasn’t even been passed yet. Why would you hold it responsible for no one walking on the sidewalk? Measure H does NOT restrict development. Read a little and smarten up. Measure H is for responsible development with reasonable parking paid for by the developers and not the taxpayers. Don’t buy the lie. No one is walking on the sidewalk because your brilliant City Council has spent $30 million of your dollars and didn’t have enough sense to build a parking structure or create an environment that developers would want to invest in. They did this completely backwards and wasted tons of money in the process and now they want to blame a measure that hasn’t even passed? It defies logic. Don’t believe the lying I’s !

  • Excuse me, Lifelong, but Measure H hasn’t passed yet. I don’t know how you can hold it responsible for the empty lots that have been there for years. You make that same fallatious Measure I assumption that there will be NO development under Measure H, even though the Union Bank Building, which would be fully allowed under H, just passed the Planning Commission with no opposition. Are you relying on the report of the paid consultants City Council hired to justify launching Measure I and doing their best to confuse voters, 4,200 of whom signed the initiative to get H on the ballot? Would that be the Keyser Marston report that hand picked 3 scenarios, provided no assumptions so their work could be properly evaluated, and concludes that all progress will halt and the sky will fall if developers have to stick to 3 stories, 40 feet and adequate parking? Look around at our neighboring cities and please tell me why there are plenty of completely successful H-compliant businesses up and down Coast Highway. What is so unique about Dana Point that our Council had to roll out the red carpet, decrease development fees by 85%, cut parking to ridiculous levels without providing a viable alternative, and in the process infuriate most of its citizens? Do you have so little faith in the attractiveness of our town that we have to virtually “buy” developers with taxpayers’ money?

    As Mr. Alexander said,”If you do not like the City Council and their property development decisions, change the City Council.” Yes. That’s exactly what we should do. Four of the existing ones clearly put the needs of developers way ahead of citizens and have no qualms about going to any length to force their will on the people. They should be praying H passes. If it doesn’t, it will be a direct result of a campaign supported by those 4 plus Bill Brough and his developer buddies to confuse voters and show extreme contempt for the people of Dana Point by blatantly interfering with a citizen initiative.

  • Briefly in reply,

    Taxpayers have indeed funded the Town Center improvements, but the council has reduced the development fees by 85% so that only $3,000,000 out of approximately $30,000,000 may be returned at full build out. The city would really benefit from sales tax revenue and jobs provided by the development of a business district rather than a high density residential district. The reduced parking requirements recently adopted by the City Council will not attract new businesses or allow existing businesses to grow and succeed. The parking burden is transferred to the taxpayers.

    The standard for variances in Measure H is the legal requirement of the Dana Point City Code. The 4th floor variance allowed for the Majestic project did not provide any justification or meet any of the legal requirements.

    Town Center development will continue to suffer from the lack of prudent planning before construction began. Section 4.6 on page 18 of the 2008 Town Center Plan states “Create additional public parking which would include one and preferably two facilities prior to beginning roadway construction”

  • I’m a Dana Point local and also own multiple duplexes in the Lantern District. I’ve experienced no parking issues what so ever to date. Even when we dine at Craft House, Stillwater, or Jack’s we are always able to find parking within a minute of these restaurants. That said, as our town center becomes more vibrant, its irrational to expect parking to remain as easy as it is today. A large percentage of downtown is currently made up of empty lots. These folks have just as much right to the existing public parking as everyone else. So as development occurs, parking will be harder to find. This is just a fact of life. I’m glad to see the city proactively addressing the issue by renting space from private owners. I am also supportive of giving our elected officials the ability to approve projects that make sense, rather then tying up development efforts in bureaucratic black holes.

    I personally believe it will be a shame if Measure H succeeds. Our downtown is finally moving away from being an eye sore and I find all the new development exciting. As a owner in the Lantern District, I know this will make parking more difficult, but in the spirit of being a good neighbor, I believe we all need to be flexible and have realistic expectations when living in a bustling downtown at the beach.

    • I’m curious, Jason. As an owner of several duplexes, did you provide on-site parking for your tenants, or did you expect Dana Point taxpayers to provide parking for you? This is the situation with Majestic/Raintree. There is clearly inadequate parking for those 109 units, and God forbid they have guests or a party! The shared parking spots can’t help them because they do not allow overnight parking. Developers should pay their own way, either through providing on site parking, or paying in lieu fees (preferably not discounted 85%) so the City can build or rent parking spaces on their behalf. I think you should do a little more research on H. Don’t believe the hype that all development will cease and horrible things will happen if it passes. The Union Bank development passed easily and it was perfectly ok under H.

      • Isn’t it amazing how new approved projects like Union Bank and BevMo that fit the Measure H requirements are ignored by the I propaganda crew?We need this type of project to generate sales and property tax revenue. Apartments and condos are necessary in some proportion but projects like Majestic/Raintree suck up more services and pay back little tax revenue. Yes on H and No on I for development that improves our city.

        • Steve,

          I think part of the reason why Union Bank and Bev Mo pencil out is these are large highly profitable corporations with higher margins then the boutique shops and restaurants many of us were hoping for. Ultimately the condos/apartments helps bring rents down on retail spaces. The additional condos/apartments will also help drive foot traffic into the area, thereby attracting higher quality businesses. When you visit places like Santa Monica, Venice or SOMA in San Francisco, these mixed use buildings (similar to Majestic) have completely changed the landscape of the area. When I was growing up, Venice and SOMA were gang infested areas you did not want to venture into at night. Today they are vibrant communities that are in high demand. Sure they are more dense than 20-years ago, and contend with some parking issues, but by in large these communities are significantly better then they were prior to redevelopment.

          • Long-Time Resident

            There’s no guarantee the Union Bank project will pencil out, it could end up stalled like the Advent project at the corner of Del Prado and Violet Lantern. The owner tried without success to sell the lot with plans.

          • Long-Time Resident

            And Bevmo is not a mixed-use project. The KM study which Measure I proponents cite only states that mixed-use development would be uneconomic of Measure H passes.

      • Susan,

        I’ve actually done quiet a bit of research and am very familiar with the issues at hand. As I drive around the neighborhoods in the Lantern District I see a lot of garages that are used as storage. As best I can tell most people just park on the street because there is a lot of street parking available and it’s easier. If you look at advertisements for apartments downtown, what you typically see is 1-parking spot provided for 2-bedroom units and 2-spots for 3-bedroom units. The Majestic project actually provides more then I typically see. I don’t feel its fair to hold them to a higher standard.

        Its not surprising that large corporations/chains like Union Bank and Bev Mo can make Measure H work, I suspect places like the Craft House will struggle to pencil out, if landlords can’t subsidize their costs with residential units. In the end, I think we need to provide our elected officials flexibility in making the Town Center plan work. I think they’ve done a wonderful job in setting the “wheels in motion” and I hope that measure I passes so that progress proceeds. Dana Point is too beautiful to be littered with so many empty lots.

        • Long-Time Resident Reply

          FYI, the lot at the corner of PCH & GL is not owned by Union Bank, but by M&A Gabaee, a developer. If Measure H passes, it will probably suffer the same fate as the Advent project.

          • This is an absurd comment. Why would M&A go to the expense and time to get the plan approved if they didn’t think it was feasible? The Union Bank project is one by professional local developers, Advent was approved and graded to escape more strict runoff standards with no funding at the time of approval. They were hoping to find investors from China in an investment in exchange for visa program. Not comparable in the least.

          • Long-Time Resident

            I don’t know, but maybe to sell the lot with approved plans, like the Advent project tried unsuccessfully to do. Do a search for “The Hoffman Company”, “Del Prado Mixed Use Site”, “18,900 square feet”, and you can see they tried to sell it with an offer deadline of June 16, 2014.

            But the fact of the matter is that the lot has been vacant for over 2 years, and the Union Bank project will probably suffer the same fate. Try reading the Keyser Marston report which came up with a negative or very low land value if Measure H passes for various mixed-use project hypotheticals.

          • I have read the report and was at the meeting when Keyser Marston made their presentation. A business model or analysis is only as accurate as the factors that are either included or excluded. Depending on how you build your model (and depending on what result you are looking for) you can create a statistically valid projection that might be 180 degrees away from reality. I personally do not agree with their model or findings. Associates who have been developing in Southern California for decades laugh when told about what is happening in Dana Point. One said, “I’m building in the wrong town. Dana Point is not only removing any investment risk on property purchases, but looks to insure developers make whatever return they desire regardless of what was paid for the property.”

            Similarly the oft trumpeted parking study by Nelson\Nygaard makes so many generalizations about how they can reduce parking and still have ample space with their “park once”and demand pricing model. Fact of the matter is, Dana Point and most of Southern California is not a park once environment and projecting parking requirements using such data is simply a recipe for failure. And keep in mind that this recommendation is from the firm that touts their success in Santa Monica’s Third Street Promenade as one of their great achievments. Parking is so scarce around 3rd that businesses often advise people to show up for appointments 45 minutes early to find parking, and many who live on the west side have stopped frequenting businesses there because it is too much of a hassle and there are other more convenient options. Dana Point is surrounded by communities with a lot of options, creating an environment with too little parking will destine town center to flounder.

            As to your comments about lots sitting vacant for years, we have created an environment where developers are incentivized to not build. How you ask? Every time an applicant gets a little more than is allowed by the Town Center development codes they are encouraged to sit on the sidelines and wait to get more. Why be the first to build if by waiting a while you can add another story or increase your square footage or density. Until the city is willing to stand up and say, these are the rule take it or leave it we will be in this circle of finger pointing and tail wagging the dog. Many love to call this an anti-development stance, in actuality this is a pro-community, pro-business approach that will build a town center that thrives long after the development companies have built, sold and moved on to their next targets.

          • Long-Time Resident

            You make some good points, we’ll see what happens if Measure H passes and is approved by the Coastal Commission.

            Just for the record, my position is that mixed-use development will be uneconomic for the foreseeable future, not forever. The Majestic/Raintree complex, and Zephyr project behind Denny’s, would tend to speed-up development somewhat by increasing the population.

            The reason I tend to believe the gist of the KM report is that the computed land-value numbers were so low. The highest land value for Measure H passage was $1/sq ft, and even then it required 4 stories. I would think if they were trying to reverse-engineer a specific result they would have come up with higher, but still unbuildable, numbers.

          • We all need to ask one simple question. Do we want the Town Center done right in a manner we can be proud of or quickly to just fill the space? Caving in to current pressures that more residences and higher density will expedite the build out will leave us with a Town Center that isn’t the vision any of us had when this process began. You get the chance to do it right once, done wrong we’re stuck with something no one is proud of, and our kids will ask, “How did they make such a mess of this?” The city manager loves to talk about Dana Point being a 5-Star city, I can’t think of anywhere in the world that is considered a premier coastal destination that looks like Irvine (or Moreno Valley for that matter) with 2-Star developments. We all need to remember that when the developers build, sell and leave all of us, the residents of Dana Point are stuck with their work – good or bad. For my vote, I’d rather take the prudent course and end up with a Town Center we can all be proud of…

          • Long-Time Resident

            That’s a legitimate perspective. Just don’t complain if there is not enough city money to fund other projects, such as the Capo Beach renovation, if Measure H passes.

        • The developments on the Union Bank and Bev Mo parcels are not owned by these corporations so the assumption that large corporations can make these “pencil” is not relevant. Fact of the matter it shouldn’t matter who the developer is, a national entity or a homegrown wannabe developer, the same rules apply to all. The only reason the “stalled” Advent property sought approval when they did and moved any dirt in the first place was to allow the parcel to be grandfathered into more lenient runoff/waste water management requirements when developed. All of the Majestic parcels were purchased after the town center plan had been approved so the “doesn’t pencil out” rational means the developer either expects unrealistic rates of return or they paid too much for the land. It isn’t the burden of the citizens of Dana Point to shoulder the investment risk and expected returns for these development investors. Spend a day and drive PCH between La Jolla and Santa Barbara and look at all of the development taking place that looks like it came right out of the DP Town Center Plan. Are we so unique that land and development cost are prohibitive here but work in places like Newport Beach? Ask those who are looking to develop in Town Center what rate of return they are expecting and when they bought their property….

          Prop H has nothing to do with “empty lots”, in fact this is just an “empty” scare tactic to further confuse Dana Point residents and allow developers to make the return they deem to “pencil out”. Prop H exists because the City Council turned its back on the residents and failed their responsibility to uphold the Town Center plan that was years in the making, approved by the city, Coastal Commission and made law with its adoption into the codes.

          • I have to chuckle when I hear the conspiracy theories regarding developments like Advent. Hard to fathom why a developer would go through so much effort just to be grandfathered into more lenient waste/water management requirements. Fact is there is no development happening on that empty land, likely because it simply doesn’t pencil out with the existing DP Town Center Plan. So we citizens of Dana Point are left staring at an empty lot.

            Fact of the matter is we have already seen development occur that follows the existing DP Town Center Plan and it is failing. Tavern on the Coast has already gone out of business, and a big chunk of that development remains vacant, unable to find tenants. So we went from empty lots to empty store fronts.

            Not sure what development efforts you are referencing in Newport Beach that follow the DP Town Center Plan, the only significant build out I’m aware of is on the Peninsula and is very similar to the Majestic initiative. Up and down the coast I can think of very few examples of development taking place that follows DP Town Center plan, can you provide real examples?

            A lot of the arguments I’m seeing with the pro H people seem very similar to those that were made against the Headlands project, the development of the St. Regis and of the Montage in Laguna. Even back then it was claimed that the city council had turned their backs on the citizens of the city. Looking back these folks couldn’t have been more wrong.

          • Jason, instead of imagining and “fathoming” what the situation was with the Advent property how about checking the facts. I sat through all of the planning commission meetings when this project was presented and approved and those were the reasons this project was brought to the city for approval. All of these meetings are on audio tape, do your homework before making assumptions.

            Accuracy and facts matter to me so the only property I have the exact location of right now is on the corner of PCH and Dover in Newport. New high end corner property with good tenants and ample parking.

            Regarding the failure of Tavern on the Coast how does reducing required parking benefit business on this part of PCH that is already challenged with limited parking?

  • Craig Alexanders letter depicting Bill Brough’s role in Town Center is quite a version of selective memory.
    Bill Brough was not on the City Council when it adopted the Town Center plan back in 2008. He wasn’t elected to the council until 2010. He did “spearhead”, as Craig likes to put it. Among the irresponsible actions he spearheaded was the reckless vote in April 2014 to take all the available city funds not in protected reserves and invest them in reworking Del Prado. This was done despite the pleas of citizens and outnumbered council members that to do so was premature, unnecessary and a bad investment.
    The Town Center project was to be phased based on results from incremental improvements. Now we have, by Craig’s accounting, millions sunk into a very small part of Dana Point and no capital for development in other parts of the city. Craig bemoans the vacant lots and like so many others on his side of the issue, points at those empty lots as somehow being the fruit of Measure H. Those lots have been vacant for 85 years and throwing $20 to $30 million at them while under the influence of Bill Brough hasn’t made much of an impact. A Measure that has not even been passed is not the problem and will not be a problem. Projects designed within the envelope that Measure H defines are already in the pipeline and thus evidently quite workable.
    Another vote that Brough spearheaded was the decision to overturn a Planning Commission decision and the protests of hundreds of residents about a project that was too tall, too dense and not adequately parked. Broughs “leadership” brought us the Majestic – now Raintree -project, 109 apartment units on 2.2 acres, 89% of which is residential. That is not mixed use or anything like what the Town Center Plan envisioned but Bill Brough didn’t care. He was going to the Assembly.
    Nor apparently did he care that City resources and major legal expense was incurred on his watch as the city stepped into a private party’s contractual dispute and turned it into the Strands Gate lawsuit against the City. The City lost four times in court with an indefensible case and Brough was along for the ride on most of it. The Mayor and City Manager like to spin the $300,000 fine assessed against the City by the Coastal Commission as some kind of generous investment in marine education for underprivileged students. It is a fine and part of the $500,000 or even $1,000,000 the City is on the line for as a result of this disastrous legal case. Brough was there for most of it.
    Broughs governing style is part and parcel with the Measure I people who want to excuse developers from providing adequate parking for their projects and push the burden on to taxpayers for the parking assets that will have to be bought or built. Although he never tires of proclaiming to be a conservative, he is great at spending other people’s money. The pattern he “spearheaded” is what we still see going on in Dana Point today.
    Contrary to Craig’s assertion , there is NO Empty Lots measure. The people telling that story are trying to make a lot more money on the backs of Dana Point taxpayers. They are the friends of Bill Brough. Vote yes on H and stop the exploitation of our City and its taxpayers.

    • Well said, Steve. So much of today’s controversy could have been avoided with responsible leadership from the beginning. A Council that actually listened to it’s own constituents and tried to resolve issues rather than pushing bullishly ahead would have been a big help too. The Town Center plan clearly called for a parking structure and even said it should be built before the road work. By rushing things forward and grabbing all the extra money in sight, Brough and his friends created a situation where we’re now frantically scraping together temporary parking all over the place and there’s no money left to build a structure or a lot to hold it. The cart really got before the horse here, and now we’re paying the price. I’ve heard Mr. Brough is still calling a lot of the shots in Dana Point. That’s a little scary based on his record so far. Let’s hope he stays in Sacramento.

  • This H vs I debate is being undertaken between people with considerable reference to histories unshared with most of the voting public, and so that confuses issues. The statements in support of H incurred censure by a judge for being hyperbolic, though they don’t seem to have been too far from the truth one comes to understand at huge cost and effort. The facetious misrepresentation of some of the pro-I literature strikes me as quite offensive.
    This seems all to American a tale. We love short-term thinking and grand half baked projects. Actually though we worked as a community to develop a plan and put it into place, though the short-term thinkers have been heavily influenced (who can diagnose the incentives) by developers to cut parking requirements and allow taller structures in order to more quickly sell projects. Realistic projects have been developed given the tougher development requirements of the original proposal, though there’s more to be made, quicker, by trimming standards it seems. Parking is an issue and always has been. There was a plan to develop structures, but money got spent elsewhere, and so an effort got launched to see if the city could temporarily lease some from private parties. They might have deals with landlords for 72 such parking spaces around town. This would relieve planned developers form having to deal with anything like reasonable parking requirements for their projects. I don’t think so.
    Let’s bet on Dana Point and have faith in the plan we put together. It’s working, and it’s wrong to claim that lots that have been empty for 85 years spell failure of current standards without the sort of compromises of the plan and standards that seem to frequently negotiated by office holders. Let’s ask city officials to live up to the law and adopted plan. Avoid selling out. Yes on H, no on I.

  • I have a different view and it comes with a question. What’s so awful about empty lots? I always thought they were part of DP’s charm.

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