Welcoming Business--for Sake of Prosperity : San Clemente: City is opening its arms to developers, spawning wariness among veterans of past slow-growth political battles.

By LEN HALL

April 2, 1995 12 AM PT

TIMES STAFF WRITER

SAN CLEMENTE —

Not even the pro-development Chamber of Commerce could have said it any more bullishly:

“I hope this sends a message that if you desire to do business in our city, we will find a way to make it possible,” City Councilman Scott Diehl said when he and his colleagues recently voted for the largest commercial project ever built in this 67-year-old city.

While a slow-growth sentiment may linger elsewhere in the county, particularly among the coastal cities, it appears to have vanished in San Clemente--at least among the council members.

Dana Point remains embroiled in a bitter lawsuit over the development of the Headlands near Dana Point Harbor, and Huntington Beach is awash in controversy over proposed building at Bolsa Chica.

But in San Clemente, the council and city staff have joined the Chamber of Commerce in energetically rolling out the welcome mat to business people, investors and developers.

The result has sparked a mini-boom here, although many longtime residents believe city officials are selling out to developers.

“When I hear talk about San Clemente on the edge of a new prosperity, it sounds to me like the developers are again going to have free rein in San Clemente,” said Glenn Roy, 43, a resident since the late 1950s.

Council members and city officials dismiss such talk as sour grapes left over from the slow-growth political wars of the late 1980s.

“I still see San Clemente as a sleepy little town, at least as compared to some of our neighbors. . . . But this is a new era,” said Councilman Steve Apodaca.

Along with the recently approved 600,000-square-foot commercial project called Plaza Pacifica that will include four anchor stores, a food court and a movie theater complex, projects are moving forward on all sides of this 17-square-mile city of 45,000 people.

Several large housing developments are underway in the back country next to San Juan Capistrano and Rancho Mission Viejo. A new restaurant akin to Laguna Beach’s Las Brisas and a time-share project are planned near the city pier. Preparations to rekindle development have begun for the long-abandoned 253-acre Marblehead property that reaches from Pacific Coast Highway to Interstate 5.

“Rightly or wrongly, San Clemente back in the late 1980s was regarded as too tough and too difficult to deal with,” said David N. Lund, the city’s director of economic development. “What we have done is make it clear that if you are willing to invest in our community, we will do what is humanely possible to assist you.”

The city’s goal is financial stability, Mayor Candace Haggard said.

Long before the county’s dive into financial ruin, San Clemente suffered shrinking revenue so much that the city two years ago disbanded its Police Department and contracted with the Orange County Sheriff’s Department for police services.

Other streamlining and privatizing cut 184 positions from the city staff, a decrease of nearly 50%.

Now comes the time to build up revenue from a new sales tax base, Haggard said.

“We made some tough decisions that had to be made . . . and downsized before it was trendy,” said Haggard, 44, a 20-year resident of San Clemente. “And we came to the realization that we needed a commercial base here.”

Lund, 47, the former city manager of Sierra Madre in the San Gabriel Valley, came to San Clemente specifically to help revitalize its economy. He said the city has not abandoned its citizens nor its established businesses in the zeal to grow.

“We are not offering up this community to developers,” Lund said. “But we also feel that for those who are willing to invest their money here, we are here to help.”

People such as former Councilman Tom Lorch, however, remain unconvinced the best interests of all residents and business people are at heart.

“San Clemente is a great little town . . . but I’m not optimistic as long as the same clique is running things at City Hall,” said Lorch, a 20-year resident who spent eight years on the council. “This city has always been open to development. San Clemente has never met a development it wouldn’t approve. The real issue is that the city has no established long-term plan.”

Others, such as downtown business owner Wilma Bloom, are concerned that new commercial development like Plaza Pacifica in the backcountry east of Interstate 5 will detract from the traditional heart of the city along El Camino Real and Del Mar, considered the city’s main drag.

“If you bring in a Wal-Mart or a Mervyn’s or a Target, then you take away from the small Mom and Pop stores that have been supporting this community forever,” Bloom said. “We know our customers by name. David Lund has never asked the local merchants if they want this new development.”

Cyclical change--boom and bust--has been a hallmark of San Clemente’s history ever since Ole Hanson arrived in the late 1920s and created what he called his “Spanish Village by the Sea.” Hanson and San Clemente boomed until the mid-1930s when a recession hit and he went bankrupt, forfeiting his holdings to the Bank of America.

“San Clemente tends to follow in step with the economy of the state of California,” said Councilman Diehl, a local veterinarian. “To a large extent, when the good times come to the state, we share with them. . . . Right now, we have the planning in place and this council is the most focused one I’ve seen to bring healthy growth to this city.”

The city staff has spent the early years of the 1990s rewriting the city’s General Plan, revamping design standards and streamlining the project approval process to make it faster and easier to understand, city officials said.

This spring, Centex homes will break ground for 315 new single-family homes in the Forster Ranch area at the north edge of the city. The Rancho San Clemente Business Park, which languished in the late 1980s, is now filling up and considered a success. And perhaps the most distinct sign that the city is turning around is the talk of a major outlet center along Interstate 5 on the Lusk Co.’s Marblehead coastal property.

San Clemente, and the entire South County region, is ripe for a new wave of development, said Paul Loubet, the Plaza Pacific project manager whose company has chosen San Clemente for its first Orange County project.

“The entire South County area is maturing,” Loubet said. “In San Clemente, it has taken a long time for the city to evolve to the point where it can support the level and amount of retail services we have planned. The level of activity there has increased dramatically.”

Loubet praised the teamwork his company has shared with city officials and said the city has “been very cooperative” despite a previous reputation as being tough.

Certain to be the most controversial of all the new projects will be any development in what is called the “Pier Bowl,” the area surrounding the city pier. A petition has been circulated to prevent a time-share development there.

“A lot of people don’t like the idea that the last downtown open space on the beach will be developed into shops and time-shares,” said Karolyn Koester, a longtime resident and former mayor.

But Koester, a constant council critic, hopes the city fathers are correct and the city is headed in the right direction. For the moment, she is going to watch, wait, and see.

“I think the new business plan is basically a good one. . . . It gives businesses a chance to come in,” Koester said. “But this city is far from settled. It’s trying to find its way.”

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San Clemente’s New Center

In past years, San Clemente placed little emphasis on commercial development. But population growth and the need to build a tax base has the city seeking more commercial establishments. Construction is expected to begin by the end of this year on recently approved Plaza Pacifica, the largest commercial project in city history. A look at Plaza Pacifica and San Clemente’s economic trends:

Plaza Pacifica

* Size: 78.6 acres

* Developer: Ramser Cos., Costa Mesa

* Builders: Pacific Development Group, Newport Beach; and Kaufman & Broad, Costa Mesa

* Tenants: Major retail stores; mix of shops, boutiques and restaurants; health club and theater-entertainment complex

* Residential concept: 145 single-family lots (minimum 5,000 square feet) next to the commercial center

Non-residential Building

(Permit values, in millions)

1994: 7.4

Taxable Sales

(Total, in millions)

1993: 240.8