San Juan Capistrano Picks San Diego Firms for Town Center Project

The San Juan Capistrano Community Redevelopment Agency rejected local favoritism Tuesday and voted to award the contract for the Historic Town Center project to Oliver McMillan and Collins Development, two San Diego area firms.

The agency, which is run by the City Council members, voted 3 to 1 for the San Diego team over 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.

Many residents had spoken out in recent weeks in favor of Birtcher, whose top executives live in a six-acre compound in the historic mission city and who have established themselves as prominent philanthropists in the community.

But Mayor Kenneth E. Friess and council members Phillip R. Schwarte and Anthony Bland said the McMillan-Collins plan adhered more closely to the council’s original request for a town center design and would be less costly for the city than the Birtcher-Colachis plan.

Vote for Birtcher

Councilman Lawrence F. Buchheim, a lifelong San Juan Capistrano resident, cast the vote for Birtcher-Colachis, arguing that the more expensive features of that team’s plan were negotiable and that the cost could be brought down.

Redevelopment Agency Chairman Gary Hausdorfer did not participate in the selection because the company he works for, Weyerhaeuser Mortgage, has a business relationship with Birtcher.

Friess, calling the vote the most difficult decision of his 11 years on the council, said “in our hearts at least,” he and the other agency members may have tried to justify a decision for Birtcher in light of the family’s contributions to the city.

“From a standpoint of pure fairness, though, I would have to cast my vote for the Oliver McMillan (proposal),” Friess said. Their plan represented the “purest adherence to the process” and the “best economic opportunity for the city,” he said.

“I’m very disappointed,” Birtcher general partner Brandon Birtcher said after the vote. “I felt all along that it would be a joy to be able to develop the town in which you live. . . . But I’m convinced there is a reason and a good reason why Oliver McMillan was selected, and because of that I trust it is a good decision and I find peace in it. . . . I’m not resentful at all.”

The McMillan-Collins plan centers on a town square that would face north toward Mission San Juan Capistrano. Where El Camino Real now runs, a new pedestrian shopping area would be created that would lead back to a 125-room hotel off Forster Street. Another courtyard would connect the hotel to Camino Capistrano. The plan includes underground parking, 60,000 square feet of retail shops and as many as four new restaurants.

“We were very responsive to their request for proposals,” said Morgan Dene Oliver, chief executive officer of Oliver McMillan, explaining why his team was awarded the project. “There was also a significant disparity in the cost of the projects . . . and that’s where competition comes in.”

Larger Project

The Birtcher-Colachis plan, which included a larger hotel, more shops and restaurants and a town square facing Camino Capistrano, would have cost an estimated $42 million to build. Of that amount, the city would have had to provide a subsidy of $10 million to $11 million. But increased tax revenues from the project would have covered only about half of that amount, leaving a gap of $5 to $6 million to be made up from other public funds.

The smaller McMillan-Collins plan would cost about $28 million to build, including $3 million to $4 million in city subsidies. Increased revenues generated by the project are expected to cover most, if not all, of that cost, possibly leaving the city with a small surplus and at worst with a subsidy of less than $1 million.

A report presented to the Redevelopment Agency on Tuesday by the city’s planning staff and outside consultants did not recommend one project over the other. But it awarded the McMillan-Collins plan higher scores on several key points, including provisions for parking, improved traffic circulation and the financial impact each plan would have on the city.