San Juan’s Past, Future Meet Downtown : Redevelopment: The city must balance the interests of preservation and commerce while considering Historic Town Center plans.

A wealthy rancher rides in from the dusty hills to rescue a financially struggling town. He and a local saloon owner round up more than $1 million in cash and promise to buy an entire city block, outmaneuvering a band of out-of-town investors.

Millionaire rancher Richard J. O’Neill’s recent bid to buy a major chunk of downtown San Juan Capistrano may play like a spaghetti Western, but it’s actually the latest real-life chapter in the history of this city, one of California’s oldest communities.

O’Neill’s plans--although as yet unspecified--have stirred up new questions over an ongoing local dilemma: How does historic San Juan Capistrano inject new life into its aged, Spanish-style downtown while still preserving its history?

It is a question that has plagued the city for two decades. But it has new life with the arrival of O’Neill and the anticipated unveiling in the coming months of the city’s plans for a new downtown renovation called the Historic Town Center.

City officials are hoping that O’Neill, other prospective downtown investors and the town center project will bring economic vitality to the city without sparking another battle between two powerful local political factions--the historic preservationists and downtown business leaders.

“City leaders since the mid-1970s have given an enormous amount of thought about what should occur in the historic downtown,” Councilman Gary L. Hausdorfer said. “Hopefully, what evolves there will be something that is pleasing to all the competing political interests in town.”

In recent years, keeping peace downtown has not been easy. The city’s redevelopment agency, which was launched in 1983 to inject new vitality in the city and now owns most of the downtown, is the moving force behind new projects and owns the land that O’Neill wants to buy. In town, the agency is regarded as a villain or a savior, depending on who you ask.

Residents on the preservationist side, such as Dr. Roy Byrnes, a former mayor and city councilman, charge that redevelopment has over-commercialized a charming old city, bringing in traffic and tourists at the expense of a bucolic way of life.

“Redevelopment in San Juan Capistrano has been a severe mistake,” Byrnes said. “The whole thing was a foolish adventure and the people with their hands on the wheel running this city should have known better.”

Nonsense, said Ken Friess, a former 17-year city councilman who helped launch the agency and continues to be its outspoken promoter. He is now a downtown builder and consultant.

“I don’t think any objective person can go downtown on a Friday night and see the life, the vitality there and say it was a mistake,” Friess said. “None of that could have happened without the redevelopment agency.”

Like it or not, the redevelopment agency will remain a downtown player, largely because it owns about 10 acres of city property straddling El Camino Real, just south of the 218-year-old Mission San Juan Capistrano. The O’Neill parcel along Ortega Highway across the street from the mission is also agency property.

Later this month, the City Council is expected to vote on whether to sell the property to the rancher. O’Neill has declined to comment during the negotiations.

In recent months, city planners have labored painstakingly to avoid a replay of what occurred in the late 1980s, the last time the redevelopment agency planned a town center along El Camino Real.

While preparing environmental documents for a proposed hotel and commercial project in 1988, city workers discovered a wall of buried 200-year-old adobe bricks, determined to be an old portion of the mission’s barracks.

The preservationists erupted and, within months, their outcry halted the complex and chased the San Diego-based developer out of town. Downtown businessman Paul Farber, whose own Franciscan Plaza project was caught up in the protest, still shudders at the thought of that time.

“The city at that time suddenly became very political, very political,” Farber said.

This time, however, city officials insist things are different. By summer, six new historic town center proposals will be unveiled.

Meant to embody both the new and old of San Juan Capistrano, the range of projects is designed to appeal to diverse interests, including a plaza, a museum, and archeological sites interspersed with shops and restaurants, city officials say.

And this time the planning process has been staffed side-by-side by business leaders and preservationists, said City Manager George Scarborough.

“What we are doing is responding to a community process with unprecedented community involvement that is underway as we speak,” Scarborough said.

Hausdorfer, who was a backer of the old hotel project and is the only remaining council member from those days, now says it may all work out for the best.

“We will never know how that project would have evolved . . . but ironically, it has all turned out to be a positive,” Hausdorfer said. “It has given the residents the opportunity to do some things that otherwise might have been impossible. We now have an opportunity to make an intelligent decision, a truly rational decision.”