A nearly decade-old battle between Garden Grove’s Main Street business owners, the city and developer Steve Sheldon over a 1.6-acre downtown parking lot may come to a head this year, as an August deadline approaches to determine how the land will be used.

Today it’s a quiet drive of restaurants, office space and empty storefronts, but Main Street was the center of the city’s bustling business district long before Garden Grove incorporated in 1956. It still is fiercely guarded by some residents as a central part of the city’s history.

Since 2006, Sheldon has floated two plans to build housing on the parking lot, the last large public lot in the area. Both plans were vehemently opposed by downtown business owners who say losing control over the lot would destroy business on an already ailing street.

Now the city’s Housing Authority, which purchased the property in 2012 for $2.3 million – is coming up on a five-year deadline to either sell the lot or dedicate it to affordable housing. Neither choice appeals to Main Street business owners.

Main Street has struggled for the past decade to attract new customers, and the parking lot is rarely full.

A petition circulated by city commissioner Josh McIntosh, called “Main Street’s Parking Belongs to Main Street!” has drawn 323 signatures so far.

“It is time for the city to either reinstate the Main Street Parking Commission or to give the parking lot to the Main Street Commission,” McIntosh said. “If people have nowhere to park, they will not come to Main Street.”

A Long Battle

The battle over the 161-space public lot started in February 2006, when the City Council approved an exclusive negotiating agreement for Sheldon to pitch a development proposal within six months. That rankled the Main Street Commission and Parking District, citizen boards which were not consulted before the agreement was approved.

And it prompted the Downtown Business Association to sue, putting the project on hold until a judge ruled in the city’s favor in late 2007. 

Sheldon’s proposal for a five-story, 100-unit condominium complex was put on hold again, however, when the market tanked in 2008 during the Great Recession.

Rankling business owners further was a 2009 decision by the city to dissolve the parking district altogether, which business owners saw as retaliation for their lawsuit.

The city’s redevelopment agency eventually purchased the property in 2011 for $2.3 million, and transferred ownership of the property to its Housing Authority in 2012 as part of Governor Jerry Brown’s decision to end the use of redevelopment agencies.

After redevelopment ended, cities were required to, within five years of the date of acquisition of a property, sell the property on the open market or dedicate the land to low-or moderate-income housing.

In 2014, Sheldon proposed a scaled-down version of the project, for 28 three-story townhomes. But it drew the same forceful opposition from downtown business owners and a petition, prompting the City Council to table the project indefinitely.

Sheldon, who says he’s still interested in the property, has maintained throughout that his project would provide over 100 parking spaces for public use, for both guests of the new housing units and people visiting Main Street.

He and city officials also argued in the past that the housing development would help inject new life to the street by adding an influx of customers.

“Quality housing would be a catalyst to help activate Main Street but it must maintain the necessary parking,” said Sheldon in an email. “We would collaborate with the businesses to develop a master parking plan to ensure there is ample parking for their customers and allow for new development.”

At least a few residents agree.

Tommy Donovan, the grandson of former Mayor Walter Donovan, said while he thinks it is important to preserve Main Street and other historic landmarks, that process has been dominated by a small group of people.

“The efforts of preserving Main Street has been strong and vibrant, but I also feel that for the surrounding area, progress is to move forward for what benefits the residents of Garden Grove as a whole,” said Donovan.

The area around Main Street is likely to change significantly over the next several years.

Developer Shaheen Sadeghi, who has spearheaded successful commercial projects like the hipster shopping complex The Lab in Costa Mesa and the Packing House food hall in Anaheim, has plans to convert homes near City Hall into restaurants, apartments and retail space.

The city is also preparing to solicit bids for a parking study of the entire downtown area.

Members of the Main Street Commission have also asked staff to explore options for sharing parking lots with nearby businesses, such as Coastline Community College, which is right next door.

Economic Development Director, Lisa Kim, said staff will update the City Council on the property in the near future.

“Our goal is to work with our community and the Main Street businesses for revitalization,” said Kim. “We recognize that parking is instrumental in that. It goes hand in hand.”

Scott Weimer, treasurer for the Downtown Business Association, says business owners are gearing up to keep fighting for their parking lot, and for Main Street’s future success.

“This is going to be the last knife in the back of Main Street,” said Weimer.

Contact Thy Vo at tvo@voiceofoc.org or follow her on Twitter @thyanhvo.

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