Battle Brews Over Future of Beach Blvd.

‘The economy is comparable with entire countries in the world, which is why the city wants it.’

--James Lane

A seedy massage parlor, a motorcycle repair shop and an auto body shop formed a “hunk of junk” at the corner of Beach Boulevard and Warner Avenue in Huntington Beach when businessman George Pearson bought them three years ago.

Pearson spent more than $300,000 last summer turning the property into a Mediterranean-style mini-mall, with a thriving arcade, gas station, liquor store and seven other shops he leases out.

The venture, which he wants his children to inherit, is making “a lot of money,” he said, and he does not want to sell it to the Huntington Beach Redevelopment Agency.

But Pearson and others along Beach Boulevard fear that they may have no choice if the Huntington Beach City Council approves a controversial plan today to redevelop a five-mile stretch along the highway, virtually from one end of town to the other.

City’s Commercial Spine

If approved, the plan will directly affect 1,100 businesses, 400 property owners and 180 residents along the six-lane boulevard, which serves as the commercial spine of the city and as its major north-south artery.

City officials say they want Beach Boulevard, Orange County’s most congested street, to make a better first impression on visitors driving from the San Diego Freeway to Pacific Coast Highway, where the redevelopment agency plans an ambitious, half-billion-dollar beachfront spread of Mediterranean-style shops, hotels and restaurants.

They say the Beach Boulevard plan would enable the city to make $14 million in public improvements, from curbs and sidewalks to sorely needed traffic improvements. It would allow the city to consolidate irregular or undersized properties for more lucrative development, move utilities underground and spruce up landscaping.

Redevelopment also would bring the city an estimated $470 million in additional taxes by the year 2022; $219,000 in the first year alone. Under state law drafted to help counter urban blight, cities are allowed to collect any increase in property taxes above the level established at the time a redevelopment project’s boundaries are drawn.

But to Pearson and many others among the several hundred people expected to attend tonight’s public hearing on the redevelopment project, the idea is unfair.

“It’s like you can own land in Huntington Beach, but it’s almost like you’re leasing it,” the 38-year-old Pearson said. “So the city uses eminent domain and pays me a one-time profit. So what?” he said angrily. “I can put it in the bank and make 5 1/2% interest? I can’t buy another Beach and Warner. This is the highest volume gas station in Orange County.”

20% of Project Area

If the project is approved, the city, through its power of eminent domain, could force owners to sell 107 acres of privately owned land, or about 20% of the total project area.

“The city approved all my plans last summer and said it was a very pretty shopping center,” Pearson said. “They say, ‘George, you don’t have to worry because your property is nice.’ Then, I go to a Planning Commission meeting and they have a drawing of a high-rise on my corner. And they tell me I’m confused!”

All four corners at the intersection of Beach Boulevard and Warner Avenue were zoned to permit high-rise buildings in the late 1970s. City planners have conceded that some of the mom-and-pop ventures that have typified the beach route may be sacrificed.

Even so, the 27-member board of directors of the Huntington Beach Chamber of Commerce has voted to support the project.

City officials have tried to defuse the growing controversy over the proposed plan, in part by attempting to dispel myths about redevelopment, and also by arguing that it is a necessary investment in the city’s--and the boulevard’s--future.

“A lot of people have become concerned over things that really do not exist, and it is difficult to explain the real facts and get away from the emotions that are created by the situation itself,” said City Administrator Charles W. Thompson, who also serves as executive director of the Redevelopment Agency.

“There are a lot of things that redevelopment does not do. What it will do, however, is allow us to make much-needed improvements that we otherwise would not have the money to make,” Thompson added.

Traffic Problems

Traffic and parking problems in the project area do “not just affect the people and merchants on Beach Boulevard. It affects us all. It’s important that we look at the year 1995 and 2000 . . . and how will Beach Boulevard operate in 15 years.”

Redevelopment of Beach Boulevard, city officials have stressed repeatedly to concerned property owners, would not increase or create new taxes. Nor would it draw any money from the city’s general fund, or affect homeowners’ ability to refinance or make improvements to their property, unless it is to be purchased by the Redevelopment Agency.

In that case, the city has the option of buying the land in the project area--with or without the owner’s consent--at fair market value. As landowner, the city may resell the land--usually at a decreased rate--to generate new development.

Relocation arrangements would be made for uprooted residents and businesses in the project area, city officials said.

Accused of Land Grab

A municipal advisory committee, however, has accused the city of attempting a land grab.

The 21-member Project Area Committee, formed under state redevelopment law to advise the City Council about displacement of low-income residents by the proposed project, voted 18 to 3 on April 23 to reject the plan. The committee was especially concerned about the city’s intended use of the power of eminent domain to take properties in the project area. It has hired a consultant and individual members have threatened to sue to block the plan.

The concerns of PAC members include:

- The prospect of having to sell property and relocate.

- Concern that the city’s outline for traffic improvements are inadequate. Traffic circulation, they argue, will only grow worse as a result of new development along the corridor.

- The possibility that the city would go into debt to sell millions of dollars in bonds to underwrite the project, as some cities do. Stephen V. Koehler, the city’s principal redevelopment specialist, said the city has no immediate plans to sell such bonds.

Redevelopment law, unique to California, was supposed to help aging cities battle slums and blight. But James Lane, PAC president and owner of two Beach Boulevard properties, said the city’s own consultant failed to demonstrate substantial blight.

Only 2 Vacant Buildings

A report to the City Council by city consultants concluded that only two of the 405 buildings in the project area are vacant and just 3% of them were dilapidated. The study found 76% of the land sites well maintained and only 7.6% deemed poorly maintained.

But the study--prepared by the consulting firm of Katz, Hollis, Coren & Associates Inc.--also cites as blighting factors: Beach Boulevard’s poor traffic circulation; mixed and incompatible uses, such as auto-repair businesses alongside residences; undersized lots; inadequate parking, and lack of curbs and gutters.

Among the properties cited as an examples of incompatible uses was the home of Thelma Ackerman, 68, a retired nurse. Ackerman has lived for 30 years in a two-bedroom house situated behind a McDonald’s restaurant and in the shadow of a high-rise building, on property that has no sidewalk or curbs.

City officials have not specified which properties might be claimed by eminent domain. But Ackerman feels certain that her home, purchased by her parents in 1943, will be among them. And she fears that whatever she would receive for the property wouldn’t be enough to buy a home in a comparable area of Orange County. “I don’t think I can afford to move somewhere else,” Ackerman said.

Sales Tax Revenues

According to the Katz study, the city could net a projected $2.65 million in annual sales tax revenue as a result of Beach Boulevard improvements.

And by redeveloping the busy commercial strip, redevelopment specialist Koehler said, the city can ensure that it would remain lucrative in the future.

“Baloney,” responded PAC president Lane. “It’s (already) one of the most profitable commercial strips in the world.”

Auto dealerships made up 18% of the city’s total $1.3 billion in retail sales last year, and all but two of the businesses are on Beach Boulevard, according to city records.

“The economy (of Beach Boulevard businesses) is comparable with entire countries in the world,” Lane said. “Which is why the city wants it.”

Despite the very specific projections of the Katz study, when property owners ask what new developments will be built, city planners say that many of those details have not yet been considered.

But the Katz report said the city “projects new development to be 104 motel units, 575,700 square feet of commercial, 300,000 square feet of office space, 507 units of residential, 16,400 square feet of restaurant/fast food, and 52,000 square feet of auto dealerships.”

Some Support Plan

Not all on the municipal advisory committee oppose the redevelopment plan. Three PAC members wrote a letter and minority report to the City Council in support of the project.

“We believe that the (PAC’s) report is based on an emotional hostility to the concept of redevelopment or a misunderstanding of the purpose of the Redevelopment Plan,” the letter said.

Yet, one of the three authors of the minority report complained that the proposal does not “make a dent” in improving traffic.

“If you can get in our driveway without getting clobbered, you are lucky,” said Ronald A. Berry, general manager of a Chrysler-Plymouth dealership on Beach Boulevard. “We have customers (who) complain that they are afraid to test-drive cars on this road. What they call for in this (plan) will not do the trick.”

For Ila Files, 70, the prospect of being forced to move does not bother her as much as how far she would have to move.

Files, a widow whose home of 26 years faces the drive-up window of McDonald’s, has plenty of memories from her home, to be sure. But if the city “gave me enough money, I’d gladly move,” Files said.

“Now if they want to relocate me to Riverside, then I don’t want to live in Riverside. I have my church and friends here and that would be a hardship to me,” she said, adding that she planned to make that point crystal clear to City Council members. “I already wrote my speech for the hearing. I’ll be ready.”