New Homes Will Take Place of Hospital

Hadi Makarechian, boss of the home builder Capital Pacific Holdings, is inclined to grouse about how hard it is nowadays to find sites to put up homes in coastal Southern California. Hard, yes. But hardly impossible--witness Capital Pacific’s purchase of 25 acres in Dana Point with sweeping views toward the ocean and across rolling hills.

The hilltop site has been home for 45 years to a psychiatric hospital, Capistrano by the Sea, where 30 to 35 adults and adolescents are treated on any given day for mental illnesses and substance abuse.

The property, once family owned, was purchased in a 1995 bankruptcy sale by a Los Angeles developer, who resold it last month to Capital Pacific for $10 million, said Tim Hamilton, vice president of product development for the Newport Beach-based builder.

Behavioral Care, the company that runs the programs at Capistrano by the Sea, is on a short-term lease. It will relocate when evicted, though it hasn’t officially heard yet from Capital Pacific, said Sam Mayhugh, Behavioral Care’s chief executive.

Capital Pacific, formerly known as J.M. Peters, will seek a zoning change from community services to residential.

The company plans to build about 50 expensive homes on large lots on the property, which is next to residential neighborhoods and a retirement community. “We gather there are large numbers of residents who would prefer high-quality homes” to the current use, Hamilton said.

The builder is drawing up plans to maximize views and retain many of the old trees on the site, he said.

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E. Scott Reckard covers real estate for The Times. He can be reached at (714) 966-7407 and at [email protected]