NEWPORT BEACH : Council to Consider Building Agreement

The city may receive up to $20.6 million toward road and freeway improvements from the Irvine Co. in exchange for guaranteeing the company the right to build houses and office space under current density limits.

The agreement would prevent future councils from scaling back housing, office and hotel projects on the 11 properties the Irvine Co. owns in Newport Beach.

“We want a contract that says, ‘You can’t change your mind,’ ” explained Irvine Co. Vice Chairman Ray Watson. He added that political change on the council level is one of the unknowns that can be avoided under such an agreement.

Under the agreement now being negotiated with the city, the Irvine Co. would be guaranteed permission to build 1,000 homes, about 256,000 square feet of office space, 50,000 square feet of commercial space, and 68,000 square feet of hotel rooms on the 11 sites.

The $20.6 million for street improvements would consist of $8 million in developer fees from the Irvine Co. and $12.6 million in an interest-free loan from the developer to compensate the city for its advance commitment to the projects.

The total amount of money that is needed to improve the city’s streets is about $65 million, said City Manager Robert L. Wynn. This includes part of the Costa Mesa Freeway, MacArthur Boulevard, part of University Drive and other main city arteries. The $20.6 million from the Irvine Co. will be supplemented by gas tax funds and by money from the county’s newly passed transportation tax.

The agreement might also require the company to set aside 112 acres in Newport Beach as open space. The open space would be divided among the 11 sites.

On Monday, the City Council will discuss a schedule for approving the agreement. However, officials say they expect it will be more than a year before the necessary environmental reports and public hearings can be completed for the agreement.