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By Shawn Raymundo
City council on Tuesday, Aug. 18, is expected to pick up discussions on a potential multi-million-dollar sale of property near Talega that a handful of developers hope to turn into a new gas station with a convenience store and car wash.
The city has been looking to sell or lease the 2.29-acre parcel located on the southwest corner of Avenida La Pata and Vista Hermosa, adjacent to the fire station. Offers to buy the land have ranged from $6 million to $7.5 million, while offers to lease the grounds have ranged from $200,000 to $500,000.
According to the staff report to the council, the city stands to receive $230,000 to $350,000 in annual sales-tax revenue from the proposed gas stations, on top of an estimated $15,000 to $25,000 in annual property tax revenue.
Tuesday’s anticipated discussion comes eight months since councilors and the public heard proposals from three developers—Fountain Head Development, Property Nine Development and Heslin Holdings.
Fountain Head, Property Nine and Heslin had each made similar proposals for a gas station, convenience store and car wash, as well as partnering with coffee companies to operate a café onsite.
During those talks, back on Dec. 10, 2019, the council directed staff and the city’s consultant CBRE to solicit final and best offers, as well as compile a review of the top five offers, instead of just the three.
The two other finalists—Cypress Express Partners, LLC and Cadence Acquisition, LLC—whose proposals will also be presented to the council on Tuesday, are looking to similarly use the site to build a gas station.
The city had initially received 15 qualified offers for the site, with most of them representing proposals for fuel stations, according to the city. Others included charter schools and assisted-living facilities.
According to the staff report, Fountain Head, the top finalist, is proposing a 76 fuel station with a Starbucks and Bliss Car Wash. It has offered to purchase the land for $7.5 million or lease the grounds annually for $450,000 under a 20-year minimum commitment.
Cypress has offered to buy the parcel for $7.5 million or lease the land for $500,000 a year, with a 10% increase every five years under a 25-year agreement. If chosen, Cypress would build a Chevron or Shell station with an H2gO Express Car Wash.
Heslin, which is offering $7.15 million for the parcel, proposes to develop a Kroger Fuel Station, Fast 5 Express Car Wash and a Toyota Hydrogen Fuel Station. The developer is also prepared to commit to a 50-year lease with four 10-year options, starting out on $200,000 a year on rent.
If Cadence is selected, it would build a 7-Eleven station with a Fast N’ Furious Car Wash. It has offered to pay between $6 million and $7.5 million for the full parcel, but would also agree to a hybrid model, wherein it buys 2/3 of the land, for a price ranging from $3.6 million to $4.5 million, while leasing the remaining property for at least $16,000 annually.
Property Nine’s proposal includes an offer of $6 million to construct an Arco AMPM or Chevron, a car wash and a satellite location for the San Clemente-based coffee shop Zebra House Coffee. The developer has also proposed a hybrid option to purchase 1 acre of the land for $3.25 million while leasing the remaining land for 50 years at $125,000 a year.
Sara Peterson, the owner of Zebra House, had initially expressed concern with the proposals this past December, as some had looked to partner with commercial coffee chains for their onsite cafés, which she said, would impact local businesses, such as her own.
Peterson had announced at the Dec. 10 meeting that she secured a lease for space directly across the street from the proposed gas station where she will soon be expanding her business with a second Zebra House location.
Several residents at that first meeting had also expressed concerns over the potential sale, questioning the use and need for a gas station.
Then-Mayor Dan Bane had defended the potential use, stating that there is a desire among Talega residents who want another gas station option nearby as the nearest and only one in the area is located on Avenida Pico and Camino Vera Cruz.
“I understand the concerns about the uses, and gas stations are by no means a sexy use, I can acknowledge that 1,000%,” Bane had said. “But I went back to Talega, and I can tell you I heard repeatedly that we need more gas stations.”
The council’s meeting on Tuesday is scheduled for 6 p.m. and will be conducted via teleconference. The meeting will be livestreamed and can be viewed through the city’s YouTube channel.
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.