Change Is at Hand for San Juan Capistrano : Downtown Redevelopment Plans Spark Hopes and Fears of Merchants, Residents

Mike Darnold leaned back at the cash register and surveyed the rows of imported goods that fill his cavernous shop across from Mission San Juan Capistrano. A smattering of tourists were turning over price tags, but the register remained silent.

“What do you see?” asked Darnold, waving an arm through the near-empty building, which in its 60 years has housed horseless carriage craftsmen and Model T mechanics, as well as the town’s Fire Department. “I used to pay the rent in one day. Now, it takes me most of the month . . . We’d like to change that.”

Some San Juan Capistrano merchants, including Darnold, think that change is at hand. They are pinning their hopes for a brighter economic future on an ambitious city redevelopment project that has been talked about for years, but is now nearing realization.

Next week, the city’s Community Redevelopment Agency is set to award the Historic Town Center project to one of two development teams that have survived a year-long competition: Oliver McMillan and Collins Development, two San Diego area firms, or the team of Birtcher, a family-owned development firm with longstanding ties in San Juan Capistrano, and J.W. Colachis Resorts, owner of the Rancho Bernardo Inn in San Diego County.

The project, estimated to cost between $30 million and $45 million, will reroute streets and attempt to create a town square, new shops and restaurants, a parking structure and a 125- to 150-room hotel in the midst of some of the county’s oldest and most historically significant buildings, including the serene, 211-year-old mission and a collection of inhabited adobe houses that date back to 1794.

A separate project in the same area will include a five-screen movie theater, more restaurants, and yogurt and cookie shops.

City officials expect the two developments to draw new tourist money, as well as resident shopping dollars that currently are lost to newer, more dynamic attractions such as Dana Point Harbor, Mission Viejo Mall and the Ritz-Carlton Hotel.

But some merchants and residents fear the influx of corporate stores and chain restaurants will drive out the town’s odd assortment of antique dealers, gift shops and cowboy saloons.

“The flavor of this town is not hot-buttered popcorn,” said Jim Thorpe, a 19-year resident and former mayor. “It’s going to be like the Ritz-Carlton--a great place to have high tea--once. Most of us will stay out of the downtown.”

Although no dirt has yet been turned, at least two shop owners already complain that they are feeling the effects of redevelopment. Doris Crowningshield saw the monthly rent on her antique store jump $500 in January, while Darlene Perrault, owner of a monogramming business in sleepy Franciscan Plaza on Camino Capistrano, was evicted by her landlord after she hung a T-shirt in the window and taped up a petition, both of the items calling for a ban on downtown redevelopment.

Perrault’s landlord is Paul Farber, a Mission Viejo developer who plans to expand the plaza and bring in the multiscreen theater, a parking complex and new restaurants.

‘It has to Be’

“I’m not against growth, because I know it has to be,” said Perrault, a 25-year resident who says she plans to move her business to a nearby shop. “I just don’t like what they’re going to do to my town.”

Thorpe, who feels strongly about preserving the look of old San Juan Capistrano, claims that the downtown redevelopment project has failed to evoke the kind of heated debate among residents that marked his two council terms in the 1970s. At that time, the town was locked in fierce political and philosophical battles over preserving agriculture and imposing residential growth limits. “People today follow the direction the staff and council set,” Thorpe said. “In the ‘70s, it was the other way around. . . . The passion for San Juan . . . just isn’t there anymore.”

That direction is provided by the City Council, acting as the Community Redevelopment Agency. Its members are mayor and acting redevelopment agency chairman Kenneth E. Friess, a general contractor; Anthony Bland, Friess’ former business partner; Phillip R. Schwartze, vice president of one of the county’s major planning firms; retired citrus grower and San Juan Capistrano native Lawrence F. Buchheim, and Gary Hausdorfer, a mortgage banker and redevelopment agency chairman who will not vote on the awarding of the project because his company does business with Birtcher.

‘Ready to Lynch Us’

Friess agrees that in the case of the redevelopment project, the council has had to change a lot of minds “because nine years ago, the landowners and merchants were ready to lynch us,” he said.

“That’s why you elect leaders, to give direction to the community,” Friess said. “You can’t just let the downtown area fester.”

The city touts the project as a cultural milestone as well as an economic necessity. City officials have tried to defuse criticism by assuring nervous residents that the plan will not only preserve San Juan’s village atmosphere but will also restore missing elements that were long a part of downtown: a village inn, a town square and a theater.

And if some shop owners are forced out by higher rents in the new downtown, “That’s the business world,” Friess said. “Thirty percent of all businesses die out every year. People have to adapt to change. . . . Five years from now, if they devote the time and the commitment, I think they’ll be big winners. . . . The only reason for doing this is to improve business.”

At a special public hearing two weeks ago, city officials took more than an hour to present an elaborate defense of the plan, complete with slides, maps and drawings, even before anyone from the public had spoken a single word against it.

‘Simply Another Step’

“In all reality, the option of no development in the downtown area does not truly exist,” Friess said. “What we are considering is how best to approach that process. . . . We have done a good job of controlling our destiny, and this is simply another step in that direction.”

The key point that the city has been trying to get across is that change is endemic to San Juan Capistrano, and as much a part of the old town as the historic mission and the return of the swallows each spring.

Curiously, many old-time residents agree with that assessment. It seems to be the relative newcomers who want to see the city preserved as it is.

“As a native, I think I accept change much easier than newer residents,” said Tony Forster, whose ancestor, Don Juan Forster, once owned the mission and amassed vast landholdings in the area during the 19th Century. Most of the land is now part of Rancho Mission Viejo, owned by the O’Neill family. “Every day, every year, something new has come along here. Now, we’re planning for the next 100 years.”

Town historian and fourth-generation resident Pamela Hallan-Gibson says the redevelopment project will do some things that are “historically appropriate,” such as recreating a zocalo, or town square, and revitalizing El Camino Real, once the town’s center but now a little-used street blighted by overgrown, vacant lots.

‘Bring Them Back’

“I’m not going to tell you downtown doesn’t have charm the way it is, because it does,” Gibson said. “But, if anything is missing, maybe it’s the people who live in town. I don’t see too many of them down there. This plan will bring them back.”

But, she warns, the downtown project must be built on a scale that doesn’t overwhelm the city’s adobes and red-brick structures. “The downtown is small, and it’s fragile. And we’ve got to be careful,” she said.

Architects’ models and artists’ renderings of the two development teams’ proposals show that very few buildings will be demolished to make room for the project.

Both plans would eliminate four houses--none of them historically significant--on El Camino Real. The residents would be given relocation assistance. They also call for razing a gas station on Ortega Highway, whose own construction 20 years ago brought down a historic adobe, one storefront on Camino Capistrano, and possibly a telephone company building.

The Birtcher/Colachis proposal would also wipe out the Esslinger Building on Camino Capistrano, a stark white example of 1930s art deco architecture that residents seem either to love or hate.

The building’s owner and occupant, architect Ed Lohrbach, does work for Birtcher and is quietly watching the fray develop over his building from the sidelines. “I think the building is strong enough to defend itself,” said Lohrbach, adding that he and other architects would rally behind it should final plans call for its demolition.

Towers Link Project

In the Birtcher/Colachis plan, the town square would open onto Camino Capistrano and be surrounded on three sides by two- and three-story buildings housing shops and hotel rooms. Six restaurants and about 76,000 square feet of retail space also are planned. Several towers, including one 80 feet tall, would link the project.

The Oliver McMillan/Collins plan is centered on a town square that would face north toward the mission. Where El Camino Real now runs, it would create a new pedestrian shopping area that would lead back to a hotel off Forster Street. Another courtyard would connect the hotel to Camino Capistrano. This plan includes 60,000 square feet of retail shops and as many as four new restaurants.

City analysts say the Birtcher/Colachis project would cost about $42 million, including public infrastructure improvements, while the smaller Oliver McMillan/Collins plan would require about $28 million. In each case, the developer would put up a small equity amount--$5 million in the case of Birtcher and $4 million by Oliver McMillan plan--with the lion’s share of the balance coming from standard construction financing. The city’s Redevelopment Agency also would kick in a share of the financing--$10 million to $11 million for Birtcher and $3 million to $5 million under the Oliver McMillan/Collins plan.

Most of the city’s money would come from a typical redevelopment arrangement in which increased tax revenue from the improved property accrues to the Redevelopment Agency, which in turn uses those funds to service bonds issued at the start of the project. Sales tax and bed tax revenues would also increase.

Surplus Revenue

But if the projects were built as planned today, according to community development administrator Nancy Erickson, the increased city revenues earned under the Birtcher/Colachis project would fall short of servicing the bond debt by $3 million to $4 million. The Oliver McMillan/Collins plan, on the other hand, could bring in as much as $2 million in surplus revenue.

The difference, Erickson explains, is that the larger, more expensive Birtcher project would not yield correspondingly higher revenues.

But Friess says the project proposals on the table now bear little resemblance to what ultimately will be built. Once a development team is selected, he says, its plans must go through the city’s normal channels: architectural review, Planning Commission and City Council. That process could easily take two years, says Friess.

“We usually get what we want,” he said. “We will not build a project that will be a drain on the community.”

While he agrees that the ultimate project will differ from current plans, Oliver McMillan executive Dene Oliver says the proposals represent “commitments from each developer as to how much subsidy they’re looking to from the city. And there are differences.”

Home Town Advantage

Oliver’s company may look to have the economics in its favor, but his team is battling a distinct home-field advantage held by Birtcher, a family-run business whose top executives have lived in San Juan Capistrano for 26 years.

Written comments on the two teams’ architectural models have favored the San Diego firms, but the public hearing on the competition was a Birtcher landslide, with old friends and acquaintances lining up to testify as to the local family’s good name.

Right now, Friess says, the Redevelopment Agency’s choice is anybody’s guess--and many residents are guessing Birtcher.

The economics of the proposals “don’t bode well for the Birtchers,” Friess said. But “if the public is casting their lots with Birtcher . . . I think we have to listen to that.”