The Costa Mesa City Council has approved a contract with Newport Banning Ranch LLC that gives the city nearly $4.4 million to help offset a projected influx of traffic — if and when the Newport Beach development comes to fruition.
The city has little, if any, recourse to stop the company from developing the 401-acre site on the southern border of Westside Costa Mesa, city officials said.
According to a draft environmental impact report, the company is only required to pay about $1.7 million to Costa Mesa for the inevitable traffic, which equates to about $1,283 per residential unit planned for the development.
Under the contract approved 4 to 1 Tuesday night, with Councilwoman Wendy Leece dissenting, Costa Mesa is prohibited from opposing the development or any permits associated with it.
The contract stipulates that besides traffic — an estimated 14,989 daily trips to or from the area — there are no other impacts to Costa Mesa, including environmental or noise.
The company plans to build 1,375 single or multi-family homes, a 75-room resort hotel and a 75,000-square-foot commercial development.
"We get $1.7 million, and if we agree not to interfere, we get $4.4 million," Mayor Pro Tem Jim Righeimer said. "That's what we're talking about here."
Under the contract, Newport Banning Ranch would pay Costa Mesa over the time of construction to fund changes to seven Costa Mesa intersections.
Turn lanes or a through-lane would be added to Newport Boulevard between 17th and 19th streets, a westbound turn lane would be added to Superior Avenue at 17th and traffic signals would be added to Pomona Avenue at 17th and Monrovia Avenue at 19th.
For nearly two hours, residents urged the council to throw out the contract and perhaps renegotiate.
"If you were my client I would tell you unequivocally, and this is without political skins, don't sign this," said John Stephens, an attorney and council candidate.
He pointed out that the development is referred to as the "project" throughout the contract, yet where the project is supposed to be defined, it only says "insert detailed project description."
Newport Beach council critic Jim Mosher pointed out several technical errors in the contract, and proposed Costa Mesa was getting the brunt of the project's burden without the financial windfall that could come with it.
On top of traffic mitigation fees, Newport Banning Ranch is also paying Newport Beach a public benefit fee. For every residential unit on the development, Newport will be paid $30,909, which equates to about $42.5 million.
Yet Costa Mesa is projected to sustain about 65% of the development's traffic, according to the EIR.
"So I think you should ask yourself who is getting the short end of the stick here and who that might be if you approve this," Mosher said, evoking applause and hoots from the audience.
Costa Mesa Economic Development Director Peter Naghavi pointed out the city has no jurisdiction over the project, and what bargaining power it has will be gone if Newport Beach approves the development Monday.
"Once it's approved, our leverage is going to be much less than this," he told the council.
The city could sue, claiming the EIR is inaccurate, but Naghavi said the document is adequate and a legal challenge would ultimately fail.
Leece suggested that the council postpone the decision, but received no support from her fellow council members.
In its motion approving the contract, the council majority included that the dollar amount change with the Consumer Price Index.