Developer’s Plan B for Mission Viejo

The developer of an affordable-housing project in Mission Viejo has been criticized by neighbors and rejected twice by the Planning Commission. Now he has apparently decided to pursue Plan B -- high-end housing on the same lot.

“What can we do?” asked Michael Hall, vice president of Steadfast Cos. in Newport Beach. “We’re real estate developers, not affordable-housing advocates. We’re going to do what works.”

But Hall’s problems may not be over. Some in Mission Viejo have a problem with Plan B, as well.

Two months ago, Steadfast’s proposal to build a 168-unit apartment complex on a vacant 23-acre hilltop site in a commercial area stirred outrage in the city.

Opponents circulated a flier reading “Stop the Nightmare Before It Starts,” accompanied by a drawing that looked like the notorious Cabrini-Green project in Chicago

More than 100 residents attended the initial Planning Commission meeting, and none publicly supported the project. Several residents said the project for moderate- and low-income families would bring overcrowded apartments, graffiti, gangs, drugs and even drive-by shootings.

Both advisory votes by the commission were 5 to 0 against the project.

“We’re simply going where the city has taken us,” Hall said. “It’s evident that [the affordable-housing project] is not going to garner much community support.”

But before Steadfast can move forward with his new proposal, which includes 109 homes on the corner of Jeronimo Road and Los Alisos Boulevard, the City Council must approve a zoning change from commercial to residential and amend the general plan.

At least one member of the council opposes the idea. Councilman John Paul Ledesma said he is reluctant to rezone the property, which is about 40 feet above street level and does not abut residential neighborhoods.

“It would be an island of residential, surrounded by commercial and light industrial,” he said. “I don’t think that’s the best use for the city.”

Councilman Lance MacLean, however, said he supports Hall’s request, pointing out that the lot has been vacant for more than three decades.

“If this was a prime commercial spot, it would have been developed by now,” said MacLean, who supported the original 168-unit affordable-housing proposal for the site.

“When I look at the traffic, noise and pollution impacts to the area, residential is the most compatible use with the most minimal impacts.”

It is unclear how the rest of the council will vote. Mayor Gail Reavis and council members Patricia Kelley and William S. Craycraft did not return phone calls seeking comment.

Hall said studies have shown that a commercial development such as Costco or Home Depot would generate 13,000 automobile trips a day, compared with 2,000 for single-family homes, and would require Los Alisos Boulevard and Jeronimo Road to be widened a lane in each direction to accommodate the increased traffic.

“Residential single family use is a moneymaker for us and the city,” said Hall. Steadfast would pay the city a $2-million fee for rezoning the property to compensate it for the loss of future sales tax revenue, he said.

Hall said several city officials had once told him an affordable-housing project was the city’s best use for the site.

“The planning director and his staff, the city manager and the special counsel for community redevelopment directed us toward affordable housing,” Hall said. “So that’s where we focused our energy.”

Affordable-housing advocates say they can’t blame the developer for shifting direction but are worried that working families are being ignored by city officials. Teachers, firefighters and nurses are among those who qualify for affordable-housing units, housing officials say.

“We feel like the city is going down completely the wrong road,” said Scott Darrell, executive director for of the Kennedy Commission, an Orange County nonprofit affordable-housing group.

“Building more affordable housing is what they should be doing, it’s what they planned on doing, and it’s what they have the obligation to do.”

Based on various formulas that factor in the cost of housing and median family income, Mission Viejo is 154 units shy of meeting state affordable-housing requirements. If it fails to meet those standards within two years, housing advocates could sue. The state could also cut housing funds or grants.

If the council decides to rezone the property for residential use, Hall said, a downsized 108-unit affordable-housing project would still be a possibility, albeit a remote one.

“Either approach is an economically feasible one from our point of view,” said Hall. His company would earn more from a market-rate residential development, he said, but “if the city is still interested in proceeding toward affordable housing, we’re right there with it.”