Monarch Beach Golf Resort Plans Stuck in the Sands of Time : Development: Economy, bureaucracy have put luxury complex on hold. Project had been speedily approved by Dana Point officials eager to see it built.

By now, a smattering of tumbleweeds, sagebrush and sandstone along Pacific Coast Highway should have been turned into a 400-room luxury hotel--the centerpiece of a golf resort complex that’s been compared to Monterey Peninsula’s famed Pebble Beach.

Or, at least the start of a luxury hotel.

But one year after the Dana Point City Council rushed through approval for the $500-million, 225-acre coastal resort, a trailer acting as a temporary office and a half-finished park are the only signs of progress.

A nearly 10-year-old golf course is still there, but nowhere are such amenities as a clubhouse, 238 Italian-style residences and a beach house that were approved to surround it.

The developer blames government bureaucracy for delaying financing. Others say the poor economy has made financing hard to get, stalling the resort. Whatever the reason, local officials are frustrated.

Ben Cagle, a spokesman for Monarch Bay Resort Co., the California subsidiary of the resort’s developer, Tokyo-based Nippon Shinpan Co. Ltd, said the California Coastal Commission basically OKd the project last August, but final details are delaying financing.

“Our marching orders have always been that until we have complete approvals, our financing will not fall into place,” Cagle said. “We’ve made some progress, but nothing earth-shattering. We expect to know more by this summer.”

Real estate experts, however, say the economy is the main culprit.

Despite recent upbeat reports, analysts are no more optimistic than they were a year ago about the resort’s chances of luring financial backing. In fact, they claim that what was difficult a year ago is worse today.

“The thing that is different today is that the environment has gotten tougher as far as finding lenders willing to loan,” said Gary Wescomb, a partner at Kenneth Laventhal & Co., an accounting firm with expertise in real estate. “I’m sure they are finding a lot of obstacles to overcome to get that project off the ground. Lenders in general just aren’t lending.”

City officials and residents of Monarch Beach, the posh neighborhood surrounding the proposed resort, admit to increasing frustration over the lack of progress. After all, it was the urgent pleas for quick cooperation from the neighborhood and the developer that prompted the city staff to ram the resort plans past the Planning Commission and council in a record six months.

“It’s disappointing we are not seeing any ground broken,” said Tom Crump, former president of the Monarch Beach Civic Assn., who was an outspoken backer of the project while it was being presented to the city.

“I think we are starting to experience a bit of frustration that the economy doesn’t allow the developer to move along,” he said. “I can sense some frustration on the developer’s part as well.”

Frustration was the last thing on people’s minds Feb. 25, 1992. Instead, a glow of celebration was in the air at Dana Point City Hall as dozens of Monarch Beach residents, business leaders from the Chamber of Commerce and Japanese officials flown in from Tokyo urged the council to back the project. The council voted 4-1 for the resort plans.

Talk back then was of a boost to the struggling local economy. The complex, tentatively to be called the Monarch Beach Resort, would be Dana Point’s third major tourist resort, along with the Ritz-Carlton hotel and the Dana Point Resort. It was expected to bring in $2.26 million annually in tax revenue to the city.

“It’s wonderful to see that construction will begin imminently on a major development in spite of these economic times,” then-City Manager William O. Talley said publicly.

But, privately, Talley and others were not so optimistic about the real estate market or the prospects for the resort site. Nippon Shinpan is only the latest developer--Avco, Stein-Brief and Qintex are some others--to attempt to build a resort there.

Nippon Shinpan, Japan’s largest credit card company, bought the Monarch Beach site in 1990 from Qintex, an Australian company that tumbled into receivership and bankruptcy. Their answer for the site--one that won the backing of the neighborhood--was to scale back previous proposals.

Nippon Shinpan offered a plan that cut the hotel from 1,100 rooms to 400 and eliminated 300,000 square feet of commercial space that residents did not want.

City officials accepted the scaled-back plans, but added a new demand of their own: The hotel had to be started first, before any residential building could take place.

“We wanted to have as many, if not all, of the public benefits--the parks, the golf course, the clubhouse and the hotel--completed and operating before we started issuing occupancy permits for the homes,” said City Councilman Mike Eggers, who was mayor when the project was approved.

“Historically,” he said, “when you have a multi-phased project like this, the homes that are easier to sell get built and the public improvements never get completed. We have seen that firsthand in San Diego County.”

As it turns out, that demand hurts the resort backers in the current lending market. When money does finally loosen up, it will be residential projects that move first, with resort hotels far down on the lending chain, Wescomb added.

“Once lenders get back into the lending market in Southern California, the first thing they will get back into is residential housing, not hotels,” Wescomb said. “Then comes the lending for projects to support housing, such as retail, industrial and commercial. One of the last things will be hotels.”

Given that, would the council relent on its hotel-first requirement?

“I’m more than willing to work with the property owner as long as it does not have a negative impact on the city,” Eggers said. “I am not willing to give up the only economic benefits to the city simply to plaster more homes on that site.”

Monarch Beach Resort * $500-million world-class luxury project on 225 acres * Owned by Japanese credit-card giant Nippon Shinpan Co. Ltd. * Tax revenue to Dana Point of $2.26 million a year * 400 hotel rooms * 238 homes and condominiums * Developer will create a 27-acre park and improve the golf course Source: California Coastal Commission, Dana Point City Council