As cities throughout Orange County grapple with building enough housing, local officials are increasingly looking at redeveloping underperforming retail centers.
Now, another commercial center in Santa Ana near South Coast Plaza could be redeveloped into nearly 1,600 homes, restaurants, retail stores, office space as well as bikeways and acres of open space accessible to the public.
It’s one of the latest proposed conversions of an aging mall or underused commercial plaza into a mix of retail and homes as cities across Southern California struggle to meet the state’s substantial housing mandates.
Those goals mandate that cities across Orange County plan for more than 180,000 new homes – about 40% has to be designated for lower income families – by the end of the decade amid pressure on local officials to do more to address the state’s housing crisis.
On Tuesday, Santa Ana City Council members voted unanimously to approve a development agreement and a specific plan for the project, dubbed The Village, proposed by the prominent Segerstrom family.
“Our city needs quality economic development, and that’s what this project will deliver,” said Councilman Phil Bacerra, who represents the district where the project is proposed, at Tuesday’s meeting.
Mayor Valerie Amezcua said The Village was a development Santa Ana deserves.
“I want Santa Ana to look beautiful and the people are going to come here and I say that passionately, because I think sometimes people in the community act like we don’t deserve this ‘pobrecitos, we’re poor.’ No, we’re not. We deserve this,” she said.
The proposed project is moving forward months after city staff estimated that elected officials will grapple with a $30 million deficit in four years when Measure X, a 1.5% sales tax measure approved in 2018, starts to sunset in 2029.
Bacerra said the development will help bring in revenue to the city through taxes and a $9.3 million community benefit payment to the city doled out as the project progresses in phases and to be used however the city council decides.
“This project provides housing while also providing much needed commercial spaces. Santa Ana cannot thrive or survive by only providing the housing for other city workers and other cities’ economic engines,” he said.
“Previous city leaders did not cultivate this level of economic development. Instead, they chose to force higher sales tax on our residents.”
According to a staff report, the current commercial center brings in more than half a million a year in tax revenue to the city and the proposed project is projected to bring in nearly $5.5 million a year – almost 10 times more than what’s currently being produced.
The report also estimates the project will create around 9,000 jobs – 1,000 of which will be recurring and that the developers will pay $7.1 million in in-lieu fees to go towards building affordable housing elsewhere in Santa Ana.
A couple members of Unite Here Local 11, a hotel workers union, said city officials should require the developer to build affordable housing on site.
The project received support from some residents as well as construction union LiUNA Local 652 and Western States Regional Council of Carpenters, hailing it as a development that will create jobs for their members and bring in revenue to the city.
“The village project represents the kind of responsible development Santa Ana needs. It will create good, paying local jobs for our members, bring new economic investment and provide lasting benefits that families in this city can count on,” said Jimmy Elrod, on behalf of the carpenters union Tuesday.
It’s not the only redevelopment project near South Coast Plaza.
Last year, Santa Ana officials approved the conversion of the Metro Town Square Mall, a project dubbed Related Bristol, into a mix of retail and homes nearby the luxury shopping mall and the proposed Village development.
[Read: Another Orange County Mall Will be Turned Into Homes in Santa Ana]
Developers behind Related Bristol – a project expected to create over 3,500 homes – agreed to a $22 million community benefit payment to the city as well as $18 million in in-lieu fees for affordable housing for lower income families.
The two developments combined could bring in over 5,000 new homes to Santa Ana.
Both Bacerra and Amezcua said the city is on track to meet their state-mandated housing goals that require officials to zone for over 3,100 homes – of which about a 1,000 of them have to be for low and very low income families
“We’re the charm when it comes to affordable housing,” Amezcua said.
Between 2018-2024, over 5,200 homes were built in Santa Ana – of which about 59% were for above moderate income families, nearly 26% were for low income families, nearly 13% for very low income families and nearly 3% for moderate income families, according to a state database.
Orange County’s median income for a four-person household is close to $128,000, roughly $13,000 above what’s considered low income, according to the California Department of Housing and Community Development.
A four-person household making less than $72,000 a year is considered very low income.
Will There be a Hotel?
The Segerstrom family could also look to develop a hotel on the lot but would have to get a permit from the city and go before the planning commission.
It comes after members of Unite Here 11 raised concerns Tuesday that the project’s specific plan would give them the right to build a hotel without studying its impacts.
“If hotels are ever seriously contemplated for this site, they should come back as a separate proposal with their own environmental review, so that the public and decision makers can see the impacts clearly,” said Jonah Breslau, an organizer with Unite Here, at Tuesday’s meeting.
Justin McCuster, a senior executive with South Coast Plaza and representative for the developer, said they don’t plan on building a hotel and told officials they could strike that language from the plan.
“If part of this motion needs to be to strike the hotel use from it, so that it is not an option for the city or for us, then we will support you in that manner,” he said at Tuesday’s meeting adding that Unite Here never reached out to them with their concerns.
Ultimately, council members decided to amend language in the specific plan to require the developers to get a conditional use permit to build a hotel if they want to do so in the future.
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.