SAN JUAN CAPISTRANO : City May Sell Part of Historic District

A significant portion of the historic downtown commercial district, including the venerable Swallows Inn, should be placed on the market and sold by July, according to a city staff recommendation in a report to be presented to the City Council tonight.

The staff has recommended that the council approve offering for sale two city-owned downtown buildings at Camino Capistrano and Ortega Highway that include the Paisley Penguin, Cafe Capistrano and the El Peon complex of buildings across the street from Mission San Juan Capistrano. The Swallows Inn and the El Peon complex also include parking areas at the rear of the buildings.

“It’s time to do something about them,” said Councilman Kenneth E. Friess. “We don’t have anyone who has made an offer yet, but from the standpoint of planning the city budget for the next couple of years, this is a good time to sell.”

Councilman Gary L. Hausdorfer said the properties to be sold are part of “one of the most unique environments in all of Southern California.”

“When you look at many neighboring areas, like Mission Viejo and Laguna Niguel, they don’t even have a downtown,” Hausdorfer said. “We’re offering a specific environment that creates a value and an attraction. I would think no one would really get hurt investing in our downtown.”

According to a 1990 appraisal of the properties, the Swallows Inn and its neighboring Paisley Penguin were valued at $650,000, and the El Peon complex was rated at $1.5 million, according to the city report.

All of the buildings are currently leased by commercial tenants, who are also eligible to submit purchase offers, Friess said.

The city purchased the downtown property in the mid-1980s as part of a planned renewal effort. But an ambitious commercial project proposed for the area that included a 125-room hotel, restaurant and shops was killed by opposition from a historic preservationist group.

Part of that downtown renovation project remains, however, including a realignment of Ortega Highway that will move the street through the heart of the area and bisect the two buildings the city hopes to sell.