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By Shawn Raymundo
The city is no longer pursuing a lease agreement with a gas station developer over property near Talega after a council majority on Tuesday night, Jan. 18, voted down plans to enter exclusive negotiations with Cypress Express Partners.
In a 3-2 decision, with Councilmember Kathy Ward and Mayor Pro Tem Chris Duncan dissenting, the council voted against moving forward with Cypress through an exclusive negotiating agreement (ENA) that would have brought the developer a step closer to leasing the land and constructing a gas station off Avenida La Pata and Avenida Vista Hermosa.
The council’s final vote—which followed a failed attempt by Duncan to table the proposal for 30 days—seemingly caps off the yearslong effort to sell or lease the city’s 2.3-acre property, which multiple developers such as Cypress had eyed as prime real estate for a gas station and other amenities, including a car wash and a quick-service café.
“I just don’t think it’s wise for us to be going down this path, and I think we really need to stop this once and for all, and really prepare a project or seek a project even with a subcommittee, in my opinion, to explore something that will bring joy to the community,” Councilmember Laura Ferguson said after hearing from several public speakers—none of whom expressed support for a gas station development.
“I’d be with the community if they wanted a gas station and car wash,” she later added. “But I listen to the voice of the people, and I’m not hearing that they want this.”
For nearly the past year, Duncan and Mayor Gene James have led a council subcommittee tasked with talking to Cypress, the front-runner in the bidding war for the property—a city gateway next to a fire station and nearby Vista Hermosa Sports Park that was appraised at roughly $4.99 million.
Offers from a handful of gas station developers ranged from $6 million to $7.5 million. Cypress’ initial offer was to pay $7.5 million to buy the property, or lease the land for $500,000 a year, with a 10% increase every five years, under a 25-year agreement.
According to the draft of the ENA—which the city explained wouldn’t have initiated a formal agreement—Cypress was looking to lease the property for 25 years, and it would have had two five-year extension options. There would also have been two more possible five-year extensions at the city’s and Cypress’ mutual approval.
The agenda report added that a maximum 45-year agreement was estimated to net the city more than $35.3 million in revenue from lease payments.
“The city could see an additional $15 million in revenue from taxes and fees related to commercial operations at the property,” the city report stated. “Combined potential revenue tops $50 million over the full term.”
James had previously advocated that a portion of the anticipated revenue from the sale or lease should be used to help pay down the city’s unfunded pension liability, which was at about $45 million this past summer.
During the council’s deliberations over the ENA on Tuesday night, Councilmember Steve Knoblock, echoing Ferguson’s comments, also noted the contingent of residents who have spoken against the proposed development and have asked the city to explore other possibilities and prospective buyers or tenants.
“The community has spoken loud and clear, they don’t want a gas station there; they think it’s not needed,” Knoblock said. “With the proximity to the sports park, I think it’s a natural addition to be incorporated. And just because we have the ability to sell it doesn’t mean we should.”
Expressing her support for the development, Ward countered the criticism by explaining that a gas station would be of good use for the lot, given that it’s a heavily trafficked intersection off La Pata—which connects San Clemente and Talega to the neighboring towns to the north.
“I’ve been part of the City Council for years that’s been talking about this lot. It is not open space; it is a separate lot on a corner of a very busy intersection that’s been planned for this. It’s always been planned that something was going to be built there,” Ward said, referring to the planning of Talega and La Pata’s extension into San Clemente.
Ward also stated that she would have been open to an even longer lease agreement if it meant more revenue for the city.
Duncan prefaced his support for the project by touching on his campaign promise to make “the difficult but right decision, even if it might cost me personally or otherwise.”
“The bottom line, I think it’s just the right thing to do. This was a lot that was specifically set apart for exactly this type of purpose, after years of review,” Duncan said. “It’s an important revenue source for the city that would allow us to maintain our budget as costs rise.”
The mayor pro tem went on to dispute some of the negative remarks and arguments against the development, stating the gas station itself is merely a component of the project, as its other services such as outdoor dining and a market would make it “be a gathering place.”
“The concept is gorgeous … it’s everything we can hope for actually at that location,” said Duncan, before addressing the environmental concerns. “This isn’t 50 years ago, when they put gas tanks in the ground. Now, there’s so many laws about that, you go and pull them out, and it’s like nothing was there.”
James, who has largely been on the fence over the issue and looked at as the deciding vote, noted that he’s struggled with the project for more than a year. He further touched on other recent developments and projects that he believes have made residents anxious, including the scrapped Amazon delivery facility and the abandoned toll road extension.
“Cypress group, I would say, is a class group, a class group to negotiate with. The gas station and convenience store industry is not the best corporate citizens we have around,” he said, adding: “With that being said … it’s difficult for me to vote in favor of this, this evening, so I’m not going to.”
“We don’t know the amount of mail of people who’ve approached me. I would say it runs 10 to 1, but I can’t remember the one who was in favor of it,” James continued. “I’m not going to vote in favor of it. To the Cypress group, I’m sorry, but the will of the people is overwhelming on this, and I simply cannot turn my back on the people this evening.”
In an emailed statement from Brett Blanchard of Cypress Express, the representative said the company had been working for about three years to develop the site and was both “surprised and of course very disappointed to be denied at what is tantamount to the ‘starting line’ for taking a project (through) the approval process.”
Blanchard added that the ENA would have been the starting point for Cypress to start designing the project with the help of local architect Michael Luna, and submitting those plans to the city for standard design and planning approvals.
“It is very unfortunate that the vocal minority was the deciding factor so early in the process, according to the Mayor,” Blanchard wrote, adding: “It’s getting harder and harder to get projects approved in all (cities), negative social media inordinately amplifies that negativity.”
In conclusion, Blanchard wrote, “Perhaps another time.”
Reading the likely outcome, Duncan proposed that the council table the vote for 30 days, which he believed would allow time for more residents who would support a gas station to come forward.
While Ward supported the motion, the other three officials voted it down, with Knoblock noting that “this matter has been in front of this council for over a year.”
James said tabling the vote would mean “dangling a carrot in front” of Cypress for another month, “which is just not fair.”
Shawn Raymundo is the managing editor for Picket Fence Media. 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.