Infill Comes to Balboa Peninsula

When John Newcomb first saw the property, it contained an abandoned warehouse.

But Newcomb is a builder. Looking beyond rusting metal and heaps of trash, he saw opportunity and profit.

The result, two years and several million dollars later, is 28th Street Marina, the first new housing on Newport Beach’s Balboa Peninsula in nearly 20 years.

It is a true infill project. Newcomb turned a problem property into an expensive enclave of 34 luxury condominiums built on three levels over ground-floor retail shops and a subterranean parking facility.

To accomplish that required a major engineering effort, including expenditure of more than $1 million to drain the water’s-edge parcel. And because the water table starts two feet below ground level but the floor of the garage area is eight feet below that, Newcomb had to install an elaborate subterranean dike to keep Newport Bay from re-invading the property.

He also spent months wooing the neighbors, presenting his plans, making changes to satisfy the concerns of nearby merchants and residents, and ensuring that when he took his proposal to the city there was no community opposition.

But Newcomb has run into a problem that has plagued most other developers in the past two years: the recession.

The condos at 28th Street Marina, ranging from 1,560 to 2,500 square feet and originally priced from $500,000 to $1.3 million, are not selling as rapidly as Newcomb’s bank and investment partners would like.

So the project has been pulled off the market until Aug. 9, when 33 of the 34 units will be auctioned. Six of the units were in escrow when Newcomb decided, three months after sales began, to use an auction. Five of the initial buyers decided to pull out and see if they could get a better price during the auction, Newcomb said. The sixth buyer has gone ahead and is about to complete a purchase.

But Newcomb says that, even at minimum auction bids 30% below the previous list prices, the project will be a financial success. The sale proceeds will enable him to repay his banker and investors, and slash his monthly interest costs while he proceeds with leasing the 21,250 square feet of ground-floor retail space.