Santa Ana--a City in Resurgence : Official Cites Figures on Building Activity, Retail Sales

When Santa Ana officials met with a roomful of developers in their annual development seminar recently, a top city development official described the city’s downtown of a decade ago as a mix of “commercial blood banks, rescue missions and beer bars,” with no building activity at all.

But today, said Hank Cunningham, Santa Ana’s assistant director of economic development, the city claims an increasingly robust economy, reflected by the issuance of building permits for projects valued at $430 million in 1984 and 1985, more than triple the $135 million recorded for the previous two years.

And in just the first three months of 1986, construction activity already has hit $112 million, ranking Santa Ana third in Southern California, trailing only the much larger cities of Los Angeles and San Diego.

In addition, Cunningham said, retail sales--expected to zoom next year with the expansion of the former Fashion Square mall, now called Main Place Santa Ana--totaled $2 billion in 1984 and 1985, second only to Anaheim. And that neighboring city, Santa Ana officials point out, has a big advantage in retail sales with the help of Disneyland and Anaheim Stadium.

“All this,” Cunningham points out, “is being done in what is essentially a built-out, urban city.”

Major Developments

Major developments planned or already under way in Santa Ana include:

- Main Place, a $400-million office and shopping mall development on Main Street northwest of the Santa Ana Freeway.

- Fiesta Marketplace, a $10-million Latino-oriented downtown shopping center.

- Santa Ana Auto Mall, to be located on a 45-acre parcel northwest of the Costa Mesa Freeway and Edinger Avenue. Nine dealers so far have signed contracts for the $50-million project.

- Hotel Terrace, almost completed at Dyer Road and the Costa Mesa Freeway. Five hotels are already in place, offering about 1,000 rooms aimed at business clients.

- Hutton Centre, which includes 1.5 million square feet of office and retail space southwest of MacArthur Boulevard and the Costa Mesa Freeway. The $140-million project includes a new Doubletree Compri Hotel.

- Xerox Centre, a $200-million high-rise office complex near the intersection of the Santa Ana and Costa Mesa freeways. Construction is expected to begin late this year on the first phase, a 15-story office building with 125,000 square feet leased to Xerox Corp.

- Centerpointe, an eight-story hotel and a 15-story office building planned for downtown. A Milwaukee-based firm is attempting to secure financing for the project, which was scaled down from original plans for a 32-story skyscraper.

Some Criticism

Still, the once-moribund city’s resurgence hasn’t come without criticism, largely from groups and individuals concerned about the amount of low-cost housing being lost to commercial redevelopment in a city with a large population of low-income families.

The loudest critic has been the Alliance for Fair Redevelopment in Santa Ana, a group composed mostly of Latino businessmen and residents. The alliance last August filed suit to block development of a downtown condominium project until the city came up with a specific plan to construct housing for low-income citizens.

The city settled the lawsuit in March, agreeing to finance construction of 20 homes for low-income families and to rehabilitate several downtown buildings deemed historically significant. Although both sides praised the pact as a “good sign,” there is still a lot of dissatisfaction voiced by longtime residents.

The promise of 20 low-income homes is nice, said housing activist Sam Romero, “but you had to put a gun to their heads to make them do it.”

Romero said he and other redevelopment critics would like the City Council to impose a moratorium on the destruction of any housing until a long-term housing plan for low-income residents is established. The fast pace of commercial and retail development is expected to bring a lot of money to city coffers, and Romero and other critics want a good part of the cash to be channeled into housing.

Willingness to Work

The turnaround in Santa Ana’s development fortunes has been accomplished by the city’s willingness to work with developers and by its heavy use of redevelopment tools, Cunningham said. Those tools include city-guaranteed loans for rehabilitation of commercial properties; city-subsidized land sales to developers, and the use of the industrial development bond program, in which companies obtain financing for their projects through tax-free bonds.

The City Council last year approved the sale of $82.3 million in industrial development bonds for 10 projects that are expected to generate about 3,000 jobs. No bonds have been approved this year because of the possibility that federal tax legislation may affect their status.

Santa Ana also has a natural advantage for office development over some other cities because of its central location and readily available labor pool, according to Kenton Boettcher, a senior associate with Newport Economics Group, which conducts a semiannual study of the county’s office space. Santa Ana’s position as the county seat and center of county, federal and state government and courts, also make the city particularly attractive, he said.

In the firm’s latest survey, the average vacancy rate in county office buildings was 16.3% while the average in Santa Ana--which currently has 4.8 million square feet of offices--was a healthier 13.8%. Boettcher said he expects the rates to “creep up” as projects are completed in 1986 but to begin declining again in 1987.

Job Training Efforts

Several job-training efforts are also under way in Santa Ana, including an Employment Linkages Program, through which the city utilizes various college, high school and other educational resources to train unemployed residents to fill the needs of local firms.

City officials say they believe that the Fiesta Marketplace will help attract consumers to Santa Ana’s long-neglected downtown. Fiesta partner Irv Chase said the project will include Latino-oriented retail businesses, restaurants and Spanish-only movie theaters. Shoppers will be entertained by strolling mariachis.

The project, on which construction will begin in August on a four-block square bounded by 4th, Bush, 3rd and 5th Streets, will include 113,000 square feet of retail space and 69,000 square feet of second-floor offices. Chase said the city’s first plan was for a tourist-oriented center, but he added that he and his partners argued that such a plan would “scare away the customers who are already there.”

Chase said he was surprised when City Manager Robert C. Bobb and David Ream, executive director of community development, agreed and told him to put together his proposal.

A lot of cities, he said, stick to their own ideas about what is right within their borders. “I think it takes a pretty aggressive, forward-thinking city to admit that they may have made a mistake,” he said.

Ron Brunswig, vice president of JMB Federated Realty, the development firm for Main Place Santa Ana, said the shopping mall is scheduled to open in September, 1987, and he predicted $245 million in sales in the first year.