Mission Viejo is moving ahead on a controversial real estate project in the city, using millions in taxpayer dollars for a project plagued with transparency concerns.
Since 2016, the city council has been trying to complete their new core vision plan for the city, with a new focus on the Oso Creek trails and revitalizing the shopping center across the street from city hall.
In February, the council started negotiations with the Kinstler Family Trust to purchase the vacant Stein Mart building in that shopping center,
Those discussions have all taken place behind closed doors — which is legal under public meeting laws so long as it’s only talks of price and terms of payment — but it’s also opened a lot of questions from the public and other business owners in the shopping center about what’s actually going on.
The city has already been sued by Jane Kronick-Gath, a property owner in the shopping center, alleging the city council violated California’s open meetings laws by not discussing the issue publicly.
Now, the city is set to buy the Stein Mart building for $11.9 million after six months of closed-door negotiations.
None of the property appraisals have been made public, but City Attorney Bill Curley has promised they will be released after the deal is closed.
That stands in stark contrast to Anaheim’s Angel Stadium deal — which is also wrapped up in a lawsuit centered on transparency concerns.
After initially resisting its release, Anaheim council members made the stadium appraisal public before voting to begin the land sale process in December 2019.
Meanwhile, once Mission Viejo gets the land, it’s not 100% clear what’s going to happen with it.
So far, the new plans included tearing down part of the building to create an alleyway connection to Oso Creek, building two bridges to extend over the creek and building a facility to house a new water treatment plant at the other end of the bridges.
However, according to the city staff’s presentation, design plans are still in progress and it’s unclear whether or not the actual Stein Mart building will stay or be demolished to make room for new construction, which isn’t scheduled to start until at least 2024.
Ordinarily, bonds require an approval by the voters on the ballot, but the Mission Viejo City Council opted to use lease revenue bonds, which puts all the burden on the city’s coffers.
According to the staff report, the same approach was used to update the Mission Viejo Library and build the current city hall.
Those bonds result in no new taxes and have a higher interest rate than general obligation bonds, but the city can issue them at their own discretion. Those bonds will undergo one last approval at the council’s November 9 meeting and go on the market mid-November.
To offset the cost of those bonds in the city budget, just over $3 million of budget cuts are going into action in the next two years.
The largest single cut is coming by eliminating the Kid’s Factory subsidy, which provided $482,000 annually for the city’s afterschool program for kids kindergarten through sixth grade.
The city is also leaving one librarian position vacant and raising animal services fees for residents, along with cutting back the landscape maintenance budget and recreation subsidy.
Public commenters were divided over the decision to move forward during the Sept. 14 meeting where the purchase agreement was unveiled.
Most of the defense for the project came from the business community, including representatives from the city’s chamber of commerce and the Orange County Business Council.
“Our vision as a chamber is to promote economic well being within the city limits,” said Doug Zielasko, CEO of the Mission Viejo Chamber of Commerce at the meeting. “The core vision plan is clearly aligned with our goals and objectives. We’re truly enthusiastic.”
But many of Mission Viejo’s own residents came out to criticize the bonds, saying the public hadn’t been brought into the discussion and that it was too much money.
“If we’re so confident the whole city wants this, and you get a better interest rate with a (general obligation bond), then put it to the voters,” said Larry Gilbert, a longtime watchdog at Mission Viejo City Council meetings. “If you don’t come to us and make this decision on your own, you’re not representing all of us.”
According to a 2016 survey of 798 residents conducted by the city for the core vision plan, the largest bloc of respondents — 38% — said they couldn’t think of any changes they wanted to the city or wanted no changes. None of the other requested changes reached more than 10% of the response.
That survey also showed roughly two thirds of the respondents said the city’s shopping centers needed to be revitalized, but only 19% of the respondents said they supported major changes.
Despite objections from the public, the city council unanimously defended the project, saying it was needed to increase the city’s sales tax base, which is projected to drop $2 million from 2021 to 2023.
“This is not an invasion, it’s an opportunity to create opportunity, and I think that’s how we all have to look at it,” said Councilman Ed Sachs at the Sept. 14 meeting. “The people who constantly object to everything we do, I have yet to hear them offer any options other than the word no.”
Councilwoman Wendy Bucknam said everyone on the city council had the city’s best interests at heart, and they were only taking action on this issue after hearing constant complaints from residents.
“Our goal is to create a vibrant economy for Mission Viejo,” Bucknam said. “It would be so easy to do absolutely nothing … we’re trying to do the right thing to protect our city.”
According to the schedule given by city staff, the council will discuss the issue again at their November 9 meeting when they issue the bonds, and in February 2022 will receive the concept plans for the site.
Angelina Hicks is a Voice of OC News Intern. Contact her at firstname.lastname@example.org or on Twitter @angelinahicks13.