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By Shawn Raymundo
A council subcommittee is in direct talks with the front-runner of a bidding war between gas station developers that have eyed the city’s 2.3-acre lot on the corner of Avenida La Pata and Vista Hermosa, according to city officials.
Though the parcel, located near a city gateway, has been highly sought after by hopeful bidders offering to pay more than $7 million, the potential sale of the property has ignited consternation among a group of residents who believe the land could be put to better use.
Since May, Mayor Pro Tem Gene James and Councilmember Chris Duncan have led discussions with Cypress Express Partners over its proposal to purchase or lease the land near Talega, and construct a gas station with a car wash, and quick-service food and coffee house.
“The ongoing negotiations are looking less about process and more about coordinating the nuances of what that development could look like,” said Jonathan Lightfoot, the city’s Economic Development Officer, adding that those nuances include consideration of local elements and connections to the surrounding community and nearby Vista Hermosa Sports Park.
Cypress was among a group of five bidders in the running to purchase the site, with offers ranging from $6 million to $7.5 million. The council this past January considered their proposals before narrowing down the field to Cypress, Fountainhead Development and Heslin Holdings.
The three developers, which had similar concepts for a gas station and car wash, were asked to refine their bids by addressing certain desires and concerns that some councilmembers had expressed related to design, local vendors and charging stations for electric vehicles.
In Cypress’ initial bid, the developer offered to buy the parcel for $7.5 million, with the intention of constructing a Chevron or Shell station, along with an H2Go Express Car Wash and a quick-service food and coffee outlet.
Cypress had also made an offer for a lease option of $500,000 a year, with a 10% increase every five years under a 25-year agreement.
James previously had advocated that a portion of the anticipated revenue from the potential sale or lease should be used to help pay down the city’s unfunded pension liability, which is about $45 million. As of press time, James had not responded to a San Clemente Times request seeking comment.
According to Lightfoot, the council, after reviewing those updated proposals in a May 4 closed-session meeting, appointed James and Duncan to the subcommittee to begin negotiating with Cypress.
“The end result could be that the subcommittee is happy with the proposal and then brings that back for (council) discussion and a vote,” Lightfoot said of the process. He also stressed that any potential agreement would have to come back to the full council before it proceeded.
Should the city sell the property, Lightfoot continued, the developer would then be required to submit formal applications and project plans before being granted permits. Those plans would also fall under the Planning Commission’s and city planning division’s review.
Development details on property walls and egress and ingress, among other things, “are not yet part of the discussions at this point, but would be required down the line if the council does enter into an agreement,” Lightfoot said.
The negotiations mark a new milestone in the bidding process that began in mid-2019, when the city and its contractor for the listing, CBRE, began collecting proposals. According to the city, out of the 15 bids received, 12 of them came from gas station developers.
The other three bids, Lightfoot said, proposed a charter school, a health care services building and a Montessori school. The gas station developers—specifically, the five top contenders—had submitted bids above the appraised value of the property, which was assessed at nearly $3.3 million.
“My take on why that’s the case is the market demand,” Lightfoot said, noting that a significant number of residents in the area commute to work by taking La Pata—a route that doesn’t hit a fueling station until Ortega Highway, where San Clemente, San Juan Capistrano and the expanding Rancho Mission Viejo (RMV) intersect.
“These developers recognize that there’s a significant base of community that commute by this section,” he continued, further adding: “There’s a lot of new developments occurring in Rancho Mission Viejo. They just announced that the next phase of 2,700 homes is kicking off next year.”
In an announcement last week from the master-planned community of RMV, The Ranch, as it’s colloquially referred to, said that escrow had closed on land for its new Village of Rienda. That area is expected to open next spring, with the first phase to include about 670 homes across seven neighborhoods.
“It’s that mix of different uses and different rationales that have encouraged a number of developers to offer bids for the land that was more than what it was appraised for,” Lightfoot said.
Pamela Roth is a San Clemente resident who heads the La Pata Coalition, a Facebook group opposed to the gas station proposals based on a variety of factors. Chief among them is the belief that the proposals don’t fit with San Clemente founder Ole Hanson’s vision.
“We do not believe that the gas station proposals, as they’re currently written, are the best use of the lot and an attempt to stay in line with Ole Hanson’s vision of our city,” Roth said after citing a Hanson quote about envisioning the town as a “place where people could live together more pleasantly than any other place in America.”
“San Clemente seems to be heading toward an over-commercialization of San Clemente that moves away from our city’s roots and Ole Hanson’s vision,” she also stated.
Roth added that the group doesn’t believe a gas station is the best use for the property, even calling the proposed car wash an “abomination” that disrespects the area. Instead, she said, the site, at least partially, should be used as a community gathering place.
“We want to see a more trend-setting, a more natural environment for this area and not a gas station,” she said.
On the group’s private Facebook account, they describe what they believe to be a more appropriate use of the site: “a beautiful, tree-lined, multi-use gathering place with (international) food and coffee vendors, indoor/outdoor eating spaces, perhaps a few offices and a small stage/amphitheater for films, art and small-scale performances.”
The group, Roth said, has also taken issue with the property listing CBRE had put out to solicit offers. She said she believes the marketing for the site was done “very poorly,” resulting “in proposals that were less than optimal.”
Justin McMahon, vice president of JLL and the site’s listing broker, said the property is a prime location for gas station developers because of the traffic patterns, as motorists use La Pata to get to work, as well as travel north, via the 241 Toll Road.
“That will always be a good site because of the traffic patterns to fuel your vehicle; whether it’s hydrogen or petroleum, it’s a good gas station site generally,” McMahon said.
Councilmember Duncan echoed that sentiment, noting that the site is already a busy corner and is soon likely to be even busier as RMV grows and more of its residents travel through San Clemente.
He also stressed that the city recognizes the site as a valuable piece of property and, therefore, won’t let it “go unless we get a competitive bid.” As far as those bids go, Duncan added, addressing concerns on finding better uses, local government doesn’t control who bids on the property, as that’s left to the market.
“This has been available for several years and everyone who has interest, I believe, has put in a competitive bid, and no restaurant has put in a competitive bid that’s even close,” Duncan said of the bids the city did receive.
“The city doesn’t create business; we don’t run businesses,” he later said. “We try to create the circumstances where businesses can thrive and be successful, with an eye toward the economic health and prosperity of the city.”
Another concern of the group, Roth also pointed to, was the state’s commitment to move away from reliance on fossil fuels, a plan formalized by Gov. Gavin Newsom last fall when he signed an executive order requiring all cars and trucks sold in California by 2035 to be zero-emission vehicles.
“There is a move away from gas-powered vehicles, and it’s very likely, that in the very near future, gas-powered vehicles will be obsolete,” Roth said. “San Clemente seems to be a town where people are driving the more current trendy cars, and little by little, there will be fewer and fewer gas-powered cars on the road.”
Duncan, however, argued that while that’s a new factor that has to be considered in the proposals, it won’t change a decision on whether to move forward or not, as motorists are likely to predominantly still use gas-powered automobiles for at least the next 20 years.
According to Lightfoot, the bidders have told the city there’s a universal interest in providing fuel for both gas-powered and electric vehicles.
“Their thinking is there will always be a need for fuel stations, and the need for gas will gradually decline, but the need for fuel will continue whether that’s electric, hydrogen or other fuels,” he said. “They’ve indicated to the city a plan to accommodate that transition into the future.”
Down the road, the city officials explained, the city plans to hold a town hall or a charrette with Talega residents and the surrounding neighborhoods to gather more input.
“The more input the better,” Duncan said. “I think, once people see the concepts, that would be something that may ease some people’s concerns.”
Members of the Talega Lifestyle Corporation Board and the Talega Maintenance Corporation Board did not respond to San Clemente’s request seeking comment as of this posting.
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.