NMUSD mulls housing for 11-acre Newport Beach parcel, rejecting bid to preserve land
- Share via
An unused parcel of land held by Newport-Mesa Unified School District is being eyed for up to 402 units of housing — a proposition that could net as much as $1.7 billion throughout the life of a 99-year lease.
But the plan to develop the coastally zoned property and pencil in units for low income residents or workforce housing could hit a snag, according to environmentalists who’ve thrown in their own bid to purchase and preserve the 11.36-acre site.
Chief Business Officer Jeff Dixon shared with school board members during a Jan. 20 meeting an overview of bids received from six developers. His analysis listed the estimated number of units, whether they would be for sale or rent and the revenue that might be realized, both in total and in the first five and 10 years of the lease.
A proposal from City Ventures and Jamboree Housing Corp. described 134 single-family homes and 50 rental units for NMUSD employees, bringing in $582 million, $7.7 million of which could be realized in the first five years.
A bid from Knighthall Capital, envisioned 169 four-story single-family homes, 20% of which could be offered below market, bringing in $1.6 billion, up to $40 million in the first five years. A proposal from Majestic Realty Co. pitched up to 300 rental units and $1.7 billion across the 99-year lease.
“These are all estimates, and a lot of it’s going to be based on what happens when they go through the entitlement process and go through the permitting process,” Dixon told the board.
Among the portfolio of lucrative and promising prospects was an offer from the nonprofit Coastal Corridor Alliance to purchase the parcel for $2 million. Dixon said the offer was deemed non-responsive, as the district specifically requested ground lease offers only.
Coastal Corridor Alliance, is a local conservancy whose members are more than familiar with the Newport Beach land directly adjacent to the 387-acre Randall Preserve they worked to save, raising $97 million toward the effort.
Melanie Schlotterbeck, the group’s stewardship consultant, said in an interview Thursday that, just like the preserve, the NMUSD property is ecologically rich land on which sensitive and threatened species, like the burrowing owl and California gnatcatcher, have been spotted.
It’s also home to vernal pools that fill up with endangered San Diego fairy shrimp, which feed the ecosystem during rainy periods.
“Because of those three species and habitat, the evaluation that needs to be done on that property is of a higher standard, [encompassing] environmental laws and the California Coastal Act,” Schlotterbeck said, adding that protective buffer zones in Randall Preserve incur into the NMUSD site, making it legally and environmentally undevelopable.
“There is only one serpentine acre on the center of the property you can develop. The rest of it is a sensitive habitat area,” she added. “Knowing what the constraints are on the property, our bid included that first filter of developability. [But] they totally disregarded it.”
A surplus land committee will seek public input in a Feb. 5 meeting at the school district’s headquarters in Costa Mesa.
District 7 Trustee Ashley Anderson, who represents Costa Mesa’s westside, expressed concerns about making a decision now that would impact the neighborhood and community for the next century.
But Newport Beach Trustee Krista Weigand said she favored a deal that would provide affordable housing options for employees and funding the district could use for teachers, programs and educational initiatives, as opposed to a low-bid effort to preserve the site.
“I appreciate the offer, but it was $2 million for 11 acres of oceanview land — the median home price in Newport Beach is $3.5 million on 7,000 square feet,” she said.
“We’re looking at trying to do the best for our constituents, and our constituents are our students. That’s what we’re looking for with this opportunity, as well as doing a common good by having opportunities for low-income housing, which we know there’s a state mandate for.”
Trustees, who have from 30 to 60 days to consider the proposals before selecting a preferred option, are anticipated to select a developer sometime in March.
Schlotterbeck said she hopes any developer looking to build on the site is prepared to contend with many layers of Coastal Act regulations and restrictions.
“We hope they do their homework,” she said.
