Zoning Clout Is at Stake

Rancho Santa Margarita officials are hoping state legislation being considered today will allow them to wrest control of business development from an obscure private corporation they say is threatening the city’s financial health.

The bill, which passed the Assembly in May, argues that the five-member board of the Rancho Santa Margarita Commercial Maintenance Corp., known as Samcorp, has intruded into land-use issues that should be the province of city government.

The corporation was established in 1986 to guide commercial development on about 500 acres developed by the Santa Margarita Co. before the city incorporated in 2000. Samcorp wields control over 116 business property owners -- about 90% of the city’s businesses, situated mostly in a central business park.

The association’s rules, according to the bill, “serve to unreasonably restrict opportunities for full and free competition among business enterprises that are necessary for the continued financial viability of the city of Rancho Santa Margarita.” The bill was introduced by Assemblyman Todd Spitzer (R-Orange).

City officials contend that the association, which operates much like a homeowners association, could use its authority to keep out businesses it doesn’t like but which would generate revenue for the city. Property deed restrictions -- called codes, covenants and restrictions, or CC&Rs; -- allow the association board to prohibit uses that city zoning might allow.

The bill would allow the city’s zoning to supersede the CC&Rs.;

The association board counters that its powers are identical to those of other private associations that control the composition of large commercial centers--powers that keep a Costco, for example, from being built in South Coast Plaza. But though similar associations exist in other cities, they are smaller and have less impact on the overall business development.

Neutralizing the association’s authority, the board argues, would erode protected private property rights. Spitzer, who generally supports property rights, did not return calls seeking comment.

“It would set a very dangerous precedent,” said Steve Feistel, property manager for Samcorp and several homeowner associations.

The bill will be heard in the Senate Local Government Committee. A committee staff analysis questioned whether Sacramento should be called upon to solve “a local tussle” over land-use control.

“The committee may wish to consider whether the Legislature should intervene in what seems to be a local spat,” the analysis said.

Tensions erupted several months ago when Penske Toyota wanted to build a dealership on the last 9 undeveloped acres of business property in Rancho Santa Margarita--a decision over which Samcorp had final say. The board granted a variance for the dealership, which will be built in an office park.

“It seemed like an odd location for a car dealership, but everyone knew the city wanted it for the sales tax,” Samcorp board member Ray Melissa said. “We had some concerns about parking and screening the cars [from view], but I thought it sailed right through.”

City officials said the deal almost fell apart because because of delay. Samcorp’s board meets only every two months.

Officials with Penske Automotive declined to comment on Spitzer’s bill or its interactions with the city and Samcorp.

City officials said they asked Spitzer to introduce the bill after other businesses complained about having to process two sets of applications for approvals: one with the city and the other with Samcorp.

City officials also worried that the Samcorp board’s five members, who serve without pay, have little public accountability. The board members sit for two-year terms and are elected by the business owners, with voting power based on the size of the property.

“These five people have the ability to essentially limit competition,” said City Manager Jim Hart.

Melissa said the board has a code that keeps members from voting on issues that could affect their businesses.

Board members were caught off-guard by the city’s opposition, he said, and didn’t do much to lobby Assembly members. However, letters protesting the bill have been sent to senators.

“If anything, I think our mistake was being concerned about our own operations and not about our profile in the community,” Melissa said. “We don’t have a Web site, we don’t donate money to local charities. Nobody really knows much about us. But the city’s the newcomer. We’ve been here 20 years, and I think we’ve done a good job building up the business park.”