Developer Mike Harrah will turn the old YMCA building in downtown Santa Ana into a boutique hotel despite calls to make it a community center.
The building has been boarded up and decrepit for decades.
The City Council unanimously approved the deal Tuesday and had put his company, Caribou Industries, back in the running for the nearly 100-year-old building despite it scoring second place among a number of other proposals from different developers.
When the Council again sought someone to redevelop the building in February 2018, it ranked a proposal by the Orange County School of the Arts 19 points higher than the proposal from Harrah, who financed the construction of the school, which was established in 1987.
But the city continued to try and find ways to involve both Harrah and the school in the project, though negotiations kept falling through until March, when the school told the city that no partnership would work.
Advocates for the school’s proposed campus expansion, which would have included a youth community center, made a last-ditch appeal to council members Tuesday night while Harrah watched from the back of the chambers.
“Research says community spaces are vital to our youth,” said resident Heather Luis-Martinez, whose kids participate in the Relámpago del Cielo program, which teaches Baile folklórico — traditional Mexican folkloric dance — to young people. The dance program is partnered with the school and would have been part of the school’s plans for the community center.
“They’re vital for creating safe spaces for youth to grow up in,” said Luis-Martinez, who noted Santa Ana residents “only have less than 10 community centers in our city.”
Oralia Aguilera, a school teacher at the Santa Ana Unified School District, said the school’s proposed project would give kids much needed arts and culture exposure, amid cutbacks in music classes at the city’s public schools.
Aguilera said that as a first-grade teacher, she hasn’t had a music specialist come into her class for over 12 years. “There’s no art programs in the elementary schools offered to our children.”
But as a parent of kids at the School of the Arts, she said “a lot of families would share in my experience that our children might not have had the opportunity to be exposed to the arts and a great education” had the school’s partnership with Relámpago del Cielo not existed.
Luis-Martinez said with the possible expansion of the impact of the school and dance program on the city’s youth, the Council has an opportunity on its hands to “change the lives of so many other kids.”
But Harrah’s had an eye on the building for years, losing a bid for it in 2014 to St. Joseph Health and Taller San Jose, which proposed $18 million to turn it into a fitness center.
When that project fell through in 2017 due to higher-than-expected costs, Harrah was one of the four developers to answer the city’s new request for bids in 2018 with his hotel proposal. Campaign finance records from the Secretary of State show he’s donated nearly $20,000 since 2015 to current council members, as well as ballot measures they supported.
Harrah gave $15,000 in 2017 to an independent expenditure committee supporting Mayor Miguel Pulido’s reelection, and $2,500 to a ballot measure committee sponsored by Councilman Jose Solorio.
Councilmembers David Penaloza and Ceci Iglesias got donations of around $250 each in 2018, while Councilman Vicente Sarmiento got $1,000 in 2016.
Harrah has also donated to former council members like Sal Tinajero, who received around $250 in 2017, and Michele Martinez, who got $1,900 in 2016 for a supervisor run.
The campaign finance records indicate Councilman Juan Villegas is the only member of the current council who hasn’t received donations from Harrah. Villegas said this was the case in a Wednesday text message.
Harrah didn’t speak during the meeting, but told Voice of OC he’s “fully open” to including the School of the Arts in the process at any point in the future.
“You know that I designed the school? That I built the school? That I financed the school?” he said, adding it “wouldn’t be here if it weren’t for me.”
The YMCA deal is the latest in a series of wins for the property tycoon’s ongoing endeavors in Santa Ana.
The City Council reached a deal with Harrah earlier this year to give him real estate at 3rd St. and Broadway St. in downtown, in exchange for Harrah developing it into a private hotel and retail property.
And last year, the city deferred up to $502,000 in fees for Harrah’s other company, Eastcom Corporation, for a 10-story office tower at 880 N. Main St., which had housed the county Social Services Agency since 1996. Employee frustrations over what they called “slum-like conditions” and outdated electrical and plumbing systems prompted the agency to relocate in 2014.
Citing “various unanticipated project delays” since plans to convert it into a residential building began in 2016, Eastcom requested the city wait to collect the residential development fees until after the company obtains building permits, according to a staff report.
The City Council approved that request in November 2018.
Harrah is also the developer of the One Broadway Plaza project near downtown Santa Ana, which he says at 37 stories would be the tallest building in Orange County. That endeavor’s gained notoriety for a lack of progress over more than a decade.
But Harrah on Tuesday said the building will be “above ground by probably around March” next year, and that he’s secured all the financing.
Many of the council members alluded to the One Broadway Plaza holdup, citing concerns over possible project delays.
“We need things done yesterday,” Penaloza said before the vote, calling the YMCA building in its current state “an eyesore.”
City staff have already indicated they will level a 180-day deadline on Harrah to beautify the exterior of the building.
Other timeline requirements would have to be negotiated between Harrah and the city, like a possible “reversion clause” that Sarmiento floated to give the building back to the city if Harrah can’t meet deadlines.
Before council members voted to give the YMCA to Harrah, they kept bringing up their appreciation for the school and its partnerships.
“I’m torn when it comes to this,” said Councilman Juan Villegas, though he added “it looks like the school can’t do much without a partner. They need a partner. We’re talking about a $13 million cleanup cost just to get started.”
Pulido wondered out loud whether there were other places in the city Relámpago Del Cielo could expand to.
“Maybe we could find other homes for Relámpago,” he said. “They can dance many places.”
Brandon Pho is a Voice of OC intern. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.