Irvine Co. Suffers Major Blow : Newport Beach Voters Reject Center Expansion

Despite a $500,000 campaign by the Irvine Co., Newport Beach voters soundly defeated a controversial $300-million expansion plan for Newport Center in a special election Tuesday. The unofficial final vote was 11,390 to 8,260.

The defeat of Measure A was a victory for Gridlock, the grass-roots group that forced a public referendum on the issue. The results also gave a boost to Orange County’s slow-growth movement.

“The election means that we have reached the end of high-rise expansion in Newport Beach,” Gridlock co-founder Allan Beek said. “The developers who have been cleaning the place out will go look someplace else for their quick profits.”

Thomas H. Nielsen, vice chairman of the Irvine Co., said in a prepared statement:

“We are very disappointed in the outcome, of course. It’s a disappointment that’s sharpened by the fact that so many worked so hard for passage of the measure. . . . The needs that would have been met and the problems that would have been resolved by the Newport Center completion plan still remain, of course. That’s the challenge that now awaits us--all of us, friends and foes of Measure A alike.

“As for the Irvine Co., we’ll be reassessing in the near future various options with respect to the completion of Newport Center. One day it will be completed; that’s a certainty. How and in what form are, in light of the election outcome, the unanswered questions.”

Bobby Lovell, who actively opposed the expansion plan and held a No on “A” victory party Tuesday night, said of the election’s outcome: “I think that what we are hearing is that we have a sophisticated, interested community that is taking responsibility for its future.”

Lovell said: “The Irvine Co. was entitled to ask for the sky, but it’s the City Council’s job to set limits. The intensity of the development in this plan was just out of line compared to any other project ever proposed in this community.”

About 43% of Newport Beach’s registered voters turned out for the election, according to Registrar of Voters Al Olson, “substantially higher than you would normally get in a special election.” Observers said Tuesday night that the higher turnout was especially helpful to opponents of Measure A.

The Irvine Co.’s $500,000 campaign for the measure, complete with a videotape presentation, brochures and personal pleas from Irvine Co. Chairman Donald Bren and other company executives, was aimed at allaying residents’ fears of increased traffic congestion and explaining how the development plan would benefit the community as well as the company.

The plan included provisions for housing, parks, a teen and cultural center, a day-care facility and $47 million in road improvements for the area in and around Newport Center. But critics such as Beek called those provisions “sugarcoating” to make the plan’s three office towers more palatable to voters.

Beek argued that 40,000 more car trips a day would have been added to the Newport Center area if the expansion had been approved.

Mike Kapowich, a bartender and longtime resident of Newport Beach, was elated with Tuesday’s outcome.

“The bay is polluted--the air is polluted,” he said. “Forty thousand plus cars means 40,000 plus tailpipes. We have five theaters in Newport Beach. In the 13 years I’ve been here I have never not been able to get a seat, and they are building more seats? That’s ridiculous. It (the plan) seems like a little too much of everything.

“This is the St. Tropez of the United States. There is no replacing it.”

Tuesday’s election marked the culmination of a long and expensive effort by the Irvine Co. to win approval for the expansion.

According to campaign reports filed with the Newport Beach city clerk, the Irvine Co. spent more than $100,000 trying to ferret out voter sentiment every step of the way. That effort included polling and the use of focus groups, in which residents are asked about their views on local issues.

The company, which was forced to scale down its expansion plans for Newport Center three times in 10 years, had been thwarted in the past in efforts to win approval for those plans.

In 1981, for example, after the City Council approved an expansion plan, opponents qualified a citywide referendum for the ballot. The Irvine Co. withdrew the proposal because surveys showed immense voter hostility toward the company on an unrelated issue, and company officials feared the expansion plan would lose.

Last spring, the Newport Beach City Council, by a vote of 5 to 2, approved the Irvine Co.’s revised expansion plan for Newport Center. In response, a grass-roots group calling itself Gridlock successfully circulated a petition calling for a referendum on the expansion. That referendum became Measure A.

The two-month campaign was a spirited one. Gridlock, which spent about $10,000, was outspent not only by the Irvine Co. but also by Citizens For a Better Newport, a pro-A citizens group that raised more than $65,000. The pro-A citizens group mailed out 6,000 absentee voter applications.

Local real estate analysts had said the Irvine Co.’s ability to expand Newport Center was “one of the keys” to the company’s future.

Bob Reicher, manager of real estate consulting for the Costa Mesa office of Deloitte, Haskins & Sells, said in an interview earlier this week, “If they don’t get it, it would have a severe impact on their income and cash flow for the foreseeable future.”

Irvine Co. officials said before the election that they had not estimated future revenue from the Newport Center expansion.

However, a major accounting firm, taking into account the additional leasable space, anticipated rental rates and inflation, calculated that if Measure A had passed and the center expansion had gone forward as planned, it would have generated $822 million in gross revenue for the Irvine Co. by the time the entire program was completed in 15 years.

And by the year 2001, the study shows, the Newport Center expansion would have been producing annual revenue of $93 million--$12 million from retail, $28 million from apartment rentals and the lion’s share, $53 million, from office leases.

When asked early Tuesday evening at the Balboa Bay Club about the Irvine Co.’s plans should Measure A lose, company chairman Bren said: “I haven’t thought about losing.”

Both sides celebrated early but the party turned flat for supporters of Measure A. Part II, Page 1.