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By C. Jayden Smith
Seeking a potential partnership with Hoag Memorial Hospital Presbyterian to develop a medical facility on city-owned property, the San Clemente City Council voted, 4-1, on Tuesday, Sept. 20, to enter into a three-month exclusive negotiating agreement (ENA) with a medical-based real estate developer.
The agreement limits the City of San Clemente to conduct good faith discussions with only Pacific Medical Buildings (PMB) regarding the possible sale or lease and development of commercial land at the southwest corner of Avenida Vista Hermosa and Avenida La Pata.
Councilmember Kathy Ward was the lone vote against entering the ENA.
The land in question, a vacant 2.29-acre parcel that contains 99,750 square feet, was determined to be surplus land in 2014 and was appraised for $4.99 million in 2021. Hoping to earn revenue from the parcel’s sale and possible development, the city has fielded numerous offers to purchase the property in recent years.
Most recently, in January 2022, a council majority declined to enter an ENA with Cypress Express Partners, which had offered to pay $7.5 million to buy the property, or lease the land for $500,000 a year, to construct a gas station.
This came after public pressure against such activity, which Councilmember Steven Knoblock referenced on Tuesday night while saying he had “mixed emotions” about the current item in front of the council.
“This particular party that we’re suggesting we enter into an exclusive negotiating agreement with was part of that original group of applicants,” Knoblock said, referring to the city’s initial solicitation of offers for the land. “My concern is that there’s been so many years that have passed and there may be other opportunities.”
He suggested restarting the request for proposal (RFP) process to gain new suitors for the property, given that the majority of previous applicant plans also centered around now-disapproved gas stations.
Knoblock didn’t receive much support from his colleagues.
Regarding her decision to vote against the ENA, Ward cited concerns that the proposed project would not generate as much revenue as she wanted the city to receive.
“This is a property owner that’s not going to pay any property taxes,” Ward said. “I’m from the old council, where this lot was held out to be revenue-generating for the City of San Clemente. We held it out as our most important lot.”
Under the terms of the ENA, the city and PMB will discuss pricing and terms of the potential development.
Other councilmembers cited a need for health care options near the Talega neighborhood and wanted to focus on the upcoming negotiations.
Mayor Pro Tem Chris Duncan stated that Hoag was a “reputable health care provider” and expressed his desire to move forward.
Councilmember Laura Ferguson called health care services “critical for the community,” and said the initiative was not about revenue, but the community’s desire for a concept similar to what the city and PMB may work toward.
Mayor Gene James echoed Ferguson’s comments, stating that from his perspective, “We need health care in that area.”
“We need health care overall,” James said. “I can’t imagine a more quality group than Hoag to come in and offer health care in our city.”
The San Diego-based PMB has worked with numerous recognizable health care brands to develop medical facilities throughout California and beyond, including the Mission Medical Plaza in Mission Viejo and the Hoag Health Center in Irvine.
City staff said it will communicate with California’s Department of Housing and Community Development regarding the Surplus Land Act (SLA), which imposes certain restrictions on how municipalities can solicit offers from prospective developers on excess property.
Modifications to the SLA since 2014—when the land was declared as a surplus—could delay the ENA process by requiring the city to publish a new notice of the property’s availability and conduct good faith negotiations with affordable housing developers that respond.
The city will seek a written determination from HCD, according to the agenda report.
Interim City Manager Sean Joyce will conduct the negotiations with PMB, which could extend an extra 60 days if both parties agree toward continued collaboration.
C. Jayden Smith
C. Jayden Smith graduated from Dana Hills High in 2018 before pursuing a Bachelor’s degree in digital and broadcast journalism from the University of North Texas. After graduating in December 2020, he reported for the Salina Journal in Salina, Kansas. Jayden loves college football and bothering his black lab named Shadow.