In Orange County: Mature vs. New Cities

Time magazine (June 15) calls them “megacounties”: counties such as Orange, Calif., DuPage, Ill., adjacent to Chicago; Gwinnett, Ga., bordering Atlanta, and Fairfax, Va., outside Washington.

They’re no longer bedroom suburbs but are still seeking their identities. They’re characterized by high employment, high housing costs, traffic congestion and the lack of a dominant city.

Orange County resembles Long Island’s Suffolk and Nassau counties in that all three have new or relatively new communities alongside mature ones, with many of the same characteristics of large, diverse cities.

The mature communities are competing with the newer ones for development--a competition that gets especially intense in Orange County, where a handful of large landowners control huge tracts.

The cliche that “there are no problems, only opportunities” is a force behind much development in Orange County. The aggressive redevelopment policy of Santa Ana is benefiting developers like Hutton Development Co. Inc., developers of the 46-acre Hutton Centre complex near John Wayne Airport.

“We call it a ‘reurbanization’ of Santa Ana,” said Christopher Felix, the firm’s president. “The addition of an eight-screen Edwards theater center--scheduled to open in mid-November--rounds out our other facilities, including the Compri Hotel and restaurants like the Courthouse and Red Onion.”

Hutton also took advantage of an opportunity to buy the downtown Main Street Buffums department store when the 37-year-old branch of the Long Beach-based chain failed to gain an anchor position in MainPlace Santa Ana.

Hutton purchased the 3.7-acre site at 909 Main St. for an undisclosed price, and the sale is expected to be closed next month, Felix said.

“We’re going to convert the store to economical office space after it closes in January,” he said, adding that long-term plans could include putting a high-rise building on the site.

Buffums is Santa Ana’s last downtown department store, but its passing next year will be softened by the opening next month of the first million-square-foot phase of the 1.6-million-square-foot MainPlace Santa Ana.

Bob Little, vice president and director of the Century City-based western region of JMB/Federated, Cincinnati, said his firm’s 52-acre MainPlace Santa Ana development was made possible, in large part, by the slow-growth and no-growth attitude of other Orange County cities.

“Santa Ana is a town where developers are made to feel welcome, especially compared to the increasingly slow- or no-growth attitudes in other cities in Orange County,” he said. “We received a city entitlement for 1.5 million square feet of office space, 1.6 million square feet of retail space and 1,200 hotel rooms in MainPlace, allowing us to plan a proper urban-style mixed-use development.”

The first of three 500,000-square-foot office buildings is expected to be in construction next year, Little said. Plans for the hotel or hotels have not been made, he added.

A spokesman for Santa Ana’s 22-acre Hotel Terrace development on Dyer Road west of Grand Avenue and the Newport (55) Freeway, and the adjacent Grand Plaza Hotel on Grand Avenue, north of Dyer, said these properties are outperforming larger hotels where it counts the most: occupancy levels.

Four of the hotels--Embassy Suites, Petite Suites, Comfort Suites and Quality Suites--are all-suite hotels, while the Grand Plaza and the Super 8 are room hotels, according to Fred DeStefano of Winegardner & Hammons, Costa Mesa. The Embassy Suites hotel, with 308 suites, is the largest, with the rest in the 150-to-184-room or suite range, he said.

In the second quarter of this year, occupancy rates for the six hotels averaged 69.6%, compared to 63% to 65% for the hotels adjacent to John Wayne Airport in Irvine and in Newport Beach, Fred DeStefano said.

He is in charge of marketing for the Quality and Comfort hotels owned by Robert P. Warmington Co., Costa Mesa. Warmington is also the master developer of the 22-acre Hotel Terrace project.

“The occupancy rates are 71% at the Comfort, and 77% at the Quality, where room rates are typically in the $50 to $75 a night range,” he said.