Los Angeles Times

Business owners oppose 'class A' apartments

For Garry Lukas and his allies, their opinions on the matter are clear: It's a case of Costa Mesa planners "gone wild."

Much to Lukas' chagrin, a proposal for a 240-unit apartment complex is wending its way through the City Hall approval process, which means that his sheet-metal manufacturing business could have residential neighbors as soon as next year.

With so many new dwellings, Lukas and other business people near him contend, will come the inevitable traffic, decreased land values and the stomping on business owners' interests in favor of developers.

Lukas also worries that should the residential dwellings sprout up nearby, industrial folks like him will catch flak for doing what they have been doing for decades: manufacturing, sometimes noisily, in an area historically zoned for just that purpose.

"I want to be left alone," Lukas said on a recent afternoon, glancing toward the roughly 4.2-acre, commercially zoned site across the street where the apartments would replace an office building built in 1974.

Shaded by rows of pine trees, the nondescript 66,000-square-foot West Airport Center is about 35% vacant and quiet, save for the steady hum of passing cars from the adjacent freeway and occasional metal grinding emanating from Lukas' business, AZ Mfg Inc.

What makes this particular project significant from most others in Costa Mesa is its proposed location: about a half-mile from John Wayne Airport, where nearby acreage is predominantly business parks interspersed with light manufacturing. If approved and rezoned to high-density residential, the land at 125 E. Baker St. would be the only housing property east of the 55 Freeway.

The developer, Joe Flanagan of Irvine-based Red Oak Investments, contends that the airport area is slowly changing with the addition of schools, churches and creative work spaces.

The apartment complex — a quality, high-end "class A" project — is part of that evolution, he said.

Having so many young professionals and families thrive there would bring unprecedented life to an area that's otherwise hushed after standard business hours.

For Lukas and other business owners along Briggs Avenue, apartments across the street are a threat. They don't belong.

"This whole place will just come to a grinding halt," he said.


'Beverly Hills of manufacturing'

The wide side streets near 125 E. Baker are, thanks to a recent city effort, freshly repaved.

Grassy setbacks separate parking lots from roads. On the surface, it all looks like just another business park in Orange County.

Decades ago, boosters billed the area as idyllic. A 1970s brochure referred to it as the Irvine Industrial Complex: "A better location for industry in a better environment for people."

Among the facilities within close distance of the West Airport Center are a Tesla electric car service branch, a church with a preschool, a county health center, an auto repair shop, a plastics injection factory and an electronic parts manufacturer.

Those types of existing land uses, Lukas argues, are what make the planned apartments next door so out of place. When it comes to this issue, Lukas isn't afraid to use the word "tenements" to describe the project and "propaganda" to indicate his fierce effort to sway opinion.

Many of his creations are custom-made graphics or cartoons that he emails out and tapes up in AZ Mfg's front office. One is a cartoon of two women exchanging scenarios should the apartment complex come to fruition: "There will be strangers moving in and out of the neighborhood." "Big trucks driving around kids!" "People walking their dogs during rush hour." "People complaining about noise."

Another shows a toddler looking down a steep slope that leads to a body of water. With one foot on a skateboard, the boy appears in thought, as if deciding to race down the hill.

"Just because you can doesn't mean you should," the flier reads. "Mixing zones is simply irresponsible."

In December, before the Planning Commission, Lukas called the West Airport Center property "financial prey susceptible to this kind of rezone profiteering."

On a recent afternoon, six of the 50-some employees from AZ Mfg were outside drilling within earshot of the West Airport Center. Inside the factory, men drove forklifts and machines punched holes into metal plates.

"How would you like to wake up Sunday morning and look at this?" Lukas commented.

AZ Mfg has been in Costa Mesa since 1997, after moving there from Santa Ana, where, Lukas contended, nearby residents contributed to the graffiti, vandalism and trash that plagued his family business.

In Costa Mesa, though, "this is the Beverly Hills of manufacturing," said Chris Lukas, the owner's son.

The elder Lukas says that if the apartments go in, he'll have to move out, and that will cost him, maybe as much as $1 million.

Across the street from AZ Mfg is Metro Bay Plastics, a plastics-injection factory. The business has been there for 22 years.

Owner Jim Horian, who leases some of his space to Lukas, said if apartments come in, his business "will most potentially suffer a financial impact, but without having a crystal ball, we don't know how that's going to end up."

Horian added that he thinks he'll have to send his operation overseas. He can't afford to move it.

"Off goes another business outsourced to China," Horian said.

He was also concerned about safety, particularly the risk of car accidents where children could be living.

"I see it getting worse," Horian said. "That's my biggest fear."


'Class A' apartments

The 240-unit, five-story complex at 125 E. Baker St. doesn't have a name yet, but as proposed will have the types of "class A," high-end amenities seen elsewhere in Costa Mesa, like at the 3400 Avenue of the Arts complex next to the Segerstrom Center for the Arts and the Irvine Co.-owned Enclave at South Coast nearby, where rents start at nearly $1,700 a month.

These homes certainly aren't tenements, the developer Flanagan said. Rather, they're a $75-million investment — tenfold the land's current worth, he said.

Planned for the property is a gym, an outdoor sports bar with TVs, a grassy area with hammocks, a little dog park with a wash area and an "active" area with a pool and spa. On the corner of the triangle-shaped property, Flanagan wants to add a community garden and basketball court.

The designers are taking some inspiration from The Lab Antimall and The Camp — two hip shopping centers — up the street.

"Why wouldn't you want to take that?" Flanagan said. "It's so wildly successful, and from a landscape perspective, it works."

Nearly all of the parking would be within a six-story garage, with 461 spaces total on the property.

The units themselves — ranging from 590 to about 1,400 square feet — would have granite countertops, patios, decks and double-pane windows to block out any noise. He sees the apartments as a considerably more desirable option than the roughly 1,200 units just across the freeway, along Baker Street and Paularino Avenue.

Those units, despite having been built in the 1970s and 1980s, are very successful, Flanagan said.

This complex's clientele "will pay to live near their jobs, near entertainment, near the restaurants, near the services, near the beach," Flanagan said. "And they don't necessarily have the dream of the little house with the white picket fence."

If approved, Flanagan said, construction of the complex could begin by summer 2015.

Costa Mesa's airport area has seen "organic change" in the past two decades, he said. This apartment complex is among the newest layers to that.

"A light industrial neighborhood has become churches, schools, creative offices, wine tasting," Flanagan said. "It actually has very few manufacturing people left.... It has changed without the city saying they're going to change an area. It just happened."

Flanagan also countered the notion that the apartments would ruin nearby property values.

Rather, as was the case in Anaheim, Venice Beach, Irvine and Santa Monica, it will do the very opposite, he said.

Former Costa Mesa administrator Peter Naghavi, who retired last year, is working as a consultant for Red Oak.

"I will only do the projects that I think are good for the community," Naghavi said. "And this one happens to be one of those ones that I really believed in, from Day 1."

While working at City Hall years ago, Naghavi heard about the project. He saw it as a win for Costa Mesa by adding new taxpayers, voters and local shoppers.

"Nobody's going to take that office out and put in a brand-new office and continue business," he said. "There's too many vacancies."


What's next

On Tuesday, the Costa Mesa City Council is scheduled to consider 125 E. Baker St., including approval of its final environmental impact report.

The report declares a "less than significant" impact, after mitigation measures, when it comes to air quality, water, land use and traffic.

To handle anticipated traffic, the developer would pay fees and construct a stoplight at Baker and Pullman streets, which will upgrade the intersection from an "F" rating to an "A." The apartment complex's main entrance would be off of Pullman.

Planners also said the apartment's traffic would be an opposite flow, with cars leaving in the morning as others head to the business parks.

The project received unanimous approval from the city's Planning Commission last month. The county's Airport Land Use Commission, which examines land uses around John Wayne Airport for their compatibility, also signed off on in January with a 6-1 vote.

The airport commission's approval was significant, said Planning Commission Chairman Jim Fitzpatrick.

"That carries weight with me," he said.

He called the project "sound planning policy facilitating necessary reinvestment for reuse of aging properties, creating quality housing, supporting jobs and local retail amenities. I look forward to seeing broken intersections fixed and residents walking and biking to The Camp. Our brand is strong."

Naghavi said he was particularly happy about the proposed light at Baker and Pullman, which, as he learned through his years as Costa Mesa's transportation manager, has always been a dangerous intersection.

Reaction from airport-area businesses has been mixed. Some of the dissenting letters are included in the final environmental report.

Naghavi, however, points to the seven letters from the area in support of the project, including one from Shaheen Sadeghi, developer of the nearby Camp and Lab.

Former Huntington Beach Mayor Don Hansen said he the supported the project even though, as a tenant within the West Airport Center, he'll be forced to move his company.

"I know the importance of reinvesting in the community," Hansen wrote to the city of Costa Mesa, "and this type of infill development should be encouraged as housing near jobs, transportation and retail amenities is good planning policy."

On Friday afternoon, Lukas said he wasn't sure if he'll go to Tuesday's council meeting to make his case in person. He feels as though the council members already know where he stands on the "wild" city planners.

"They're just letting it go nuts," Lukas said.

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