San Clemente’s in Casa Romantica Mood : History: Going back for a third try, the City Council hopes the private sector will revitalize the mansion built by the city’s founder and generate some municipal revenue.

Once again, city officials are trying to answer the increasingly stubborn question: How do you make money off the city’s most venerable landmark?

For the third time in four years, the City Council is hoping the private sector will revitalize the historic Casa Romantica and generate badly needed revenue from the mansion built by the city’s founder, Ole Hanson.

Casa Romantica is part of a proposed $15.6-million plan that also involves building a small shopping plaza and time-share condominiums on the oceanfront bluffs overlooking the city pier.

Previous plans have envisioned the Casa as a hotel with a small museum, or a wedding/reception hall with small time-share units built around it. Both ideas flopped.

But this time, the city thinks it has a winner with renovation plans for a restaurant and small museum.

“It has absolutely been done right this time,” said Jim Pechous, assistant city planner. “We wanted to preserve the Casa and this plan will do it.”

More than any other structure in town, “the Casa Romantica is the symbol of San Clemente and Ole Hanson’s dream of creating a Spanish village by the sea,” said Dorothy Fuller, president of the San Clemente Historical Society. “No other place tells the story of San Clemente better than that building.”

City officials admit that converting the historic landmark into a commercial venture has been a delicate business. They should know.

In 1990, the first proposal for rejuvenating the Casa Romantica and the Pier Bowl area brought hundreds of residents storming to public meetings, complaining about the grand scale of the plans. The pressure caused Los Angeles-based developer, the Ratkovich Co., to withdraw from the project.

Another attempt to develop the Pier Bowl and leave the Casa as a wedding reception hall collapsed earlier this year when financing fell through for Mission Viejo businesswoman Maureen Capielo Gates.

Few detractors were in the audience last week when the newest renovation project was introduced, “but once public hearings come up, people will show up,” said community activist Karolyn Koester. “It’ll be like Ratkovich. The Casa is very important to this city and I have problems with the restaurant” in the Casa.

“All the city sees is dollar signs, and I’m afraid of what they’ll do” to the mansion, said Koester, a former mayor here.

Under the proposal, the city would pay $800,000 to renovate the Casa and the developer team of Riverside Commercial Investors Inc. and the Continental Commercial Corp. would put up $500,000 to convert the grounds into a restaurant. A small museum would be included in renovation plans.

Overall, city planners say the proposal is less than half the size of the Ratkovich plan and they maintain that restoring the Casa Romantica is their No. 1 priority. But the city does have financial pressures to build a money-making project in the Pier Bowl.

San Clemente has painfully earned the sobriquet “San Calamity” in recent years. The city budget was in the red even before a series of major landslides and floods in 1993 cost the city millions of dollars in cleanup costs and sewer repairs.

Just before the recession hit California in 1989, the three-acre Ole Hanson mansion was bought by San Clemente for $2.5 million. So far, the city has only been able to make interest payments on the financing used to make the purchase.

The Casa “is not the draw at the present time that it needs to be to fund the debt service,” said Mayor Scott Diehl. “In these tough times, the council needs to take a hard look at what the Casa becomes.”

Fuller said the historical society has “mixed feelings” about turning the Casa into a Mexican restaurant.

“We’d prefer not to see it touched other than to be renovated, but we’re aware of the fact that the city has to make money,” she said. “There will be some hard choices to make in the future.”