Construction Surging Back in South County

After years of sluggish growth, a building upswing is taking shape in South County, where city and county planners report significant increases in the development of new housing subdivisions and commercial properties.

The county’s planning department is preparing a report for the Board of Supervisors this week showing that the number of building permits issued in unincorporated communities such as Aliso Viejo and Foothill Ranch is up nearly 20% so far this year.

Demand for new tract maps and grading permits also is rising across South County, an indicator that the surge will extend at least into next year.

“We estimate that this will be our biggest year ever--even bigger than the 1980s,” said Sheri Vander Dussen, Irvine’s community development director. “We are seeing it across the board.”

Revenue from building permits, which reflect the value of the projects being built, is up 26% in Irvine, while Laguna Niguel and Mission Viejo report that the value of projects under construction during the first eight months of 1997 already surpasses last year’s total.

Lake Forest has seen commercial development double over the last year, and planners expect similar growth next year.

Signs of the surge are already evident from Laguna Niguel, where bulldozers are grading home sites, to Irvine, which is witnessing the construction of the first office buildings since the late 1980s on a “speculative” basis, before tenants have been secured.

“This is really a banner year, when compared to the recession,” said Tom Mathews, Orange County’s planning director. Developers “have weathered the storm. Now, the market is upbeat. We are seeing a lot of investment.”

The boom just beginning is already changing the character of some South County communities, and is likely to fuel efforts in some unincorporated areas to form new cities.

Developers have submitted plans for all of the remaining commercial parcels in Foothill Ranch, and officials said the community should be “built out” within two or three years.

Lake Forest has approved 1.8 million square feet of commercial development over the last 18 months, an area two-thirds the size of South Coast Plaza.

“Until recently, we were primarily a residential community,” said Kathy Graham, the city’s community development director. “This has helped balance out the community and provide more employment opportunities.”

The situation marks a big change from the early 1990s, when building activity all but came to a halt. During that latest recession, the city of Irvine reduced its community development staff by 50%. Now, cities and the county are using outside contractors to meet the demand for building inspections, plan reviews and other jobs.

“I’ve been here 21 years, and it’s never been so busy,” said Bob Storchheim, Irvine’s building safety manager. “We are trying to keep up.”

Officials attribute the current upswing to the county’s strengthening economy, the improved El Toro Y freeway interchange, and the construction of the Foothill Transportation Corridor and Antonio Parkway, which are expected to improve traffic flow to and from communities east of the San Diego Freeway.

Builders are pushing ahead with some projects ahead of schedule, while others are finally getting around to developments put on hold during the recession.

In the Lower Peters Canyon section of Irvine, a developer is moving forward with a business park and retail center about two years earlier than city officials expected.

In Laguna Niguel, a Mercedes-Benz dealership is opening at a prime location near the San Diego Freeway and Avery Parkway. The site was once slated for a Home Depot store before the recession killed the project.

Across town, a prime parcel off Moulton Parkway is being graded for 1,100 homes. “It sat there for seven years with no construction activity,” said Bob Lenard, Laguna Niguel’s community development director. “The developer was waiting for the right time in the marketplace.”

In Lake Forest, the Pacific Commerce Center was built out in about two years, and the 35-building business and industrial park has been flooded with interested tenants.

“We had expected a three- to five-year time frame, but everything is going much more quickly,” said Graham, adding that a new Bake Parkway offramp from the San Diego Freeway improved access to the center.

The development in unincorporated areas is another sign of the county’s strong economy, which is slowly translating into higher tax revenue for county government. But it also places more pressure on officials to address the demands of some residents for more autonomy from county government.

“As we continue to see this tremendous growth, we need to deal with desires of the people living in these areas to control their own destinies,” said Supervisor Todd Spitzer, who represents some of the faster-growing communities.

Competing cityhood proposals are being debated in communities like Rancho Santa Margarita, Aliso Viejo, Foothill Ranch and Portola Hills.

While many residents are interested in forming their own cities, it remains unclear whether each community has the commercial tax base needed to sustain an independent municipality.

“We have to make sure we are planning communities with public input, and in a way that will allow self-sufficiency for the areas that want it,” Spitzer added. “We want to help people who are interested in incorporating. But we have to be realistic about whether the bills can be paid.”