Editor’s Note: This is a longer version of the story that appeared in the May 17 print edition of the Sun.
The biggest obstacle to the Bay City Partners project may not be the Old Town opponents, but the California Coastal Commission. The state agency has jurisdiction over any development within 5 miles of the coastline. For example, a three-story house may still legally be built on the “Gold Coast” side of Seal Beach’s Ocean Avenue, but it must also be approved by the Coastal Commission.
Changing land use along the coast apparently difficult even when no one objects. The Sun looked at two recent efforts to change land use in Seal Beach from commercial to residential: one on Marina Drive in Council District 3 and the other on 5th Street in Old Town. In one case, Coastal Commission staff opposed replacing an apartment building with single-family homes. In the other, the state agency allowed a hotel to be replaced with housing—provided the property owner paid the commission a fee.
In another case, the City Council in 1982 approved a plan to build 1,000 homes in Seal Beach. However, the developer withdrew the application in the face of resistance from Coastal Commission staff.
The Mola project was yet another issue—one that faced stiff local opposition and ultimately never came to pass.
Even when the Coastal Commission approves a project, lawsuits can force developers and the state to change their plans. A lawsuit ultimately forced Hellman Properties from building a golf course on the Hellman site in Seal Beach. Ultimately, the state commission allowed 70 homes to be built on the Hellman Ranch property.
Seal Beach Inn
The Coastal Commission approved the demolition of the Seal Beach Inn and Gardens in May 2006. Staff and the applicant agreed to a mitigation fee of $87,810 to compensate the state for the loss of 23 visitor serving rooms at the bed and breakfast, according to the CCC staff report.
According to the commission staff report, the Seal Beach General Plan designated the land on which the Seal Beach Inn stood as residential high density. “Accordingly, the commercial use at this site is an existing non-conforming use,” the report said. The report also said the land had been designated for housing since the 1950s.
“The subject property has been in continual commercial use for at least the past 30 years,” the report said.
“The current owner states that a hotel use at this site is no longer economically viable due to upkeep and maintenance expenses, staff costs and the lack of demand in the subject area,” the report said. The owner tried, but failed, to sell the property to a hotel operation, the report said.
In January 2006, Gene Segita, general manager of the Pacific Inn, wrote to the Coastal Commission to say his hotel and others in the area could absorb the loss of the 23 rooms at the Seal Beach Inn.
In a March 2006 letter, PKF Consulting concluded that losing the 23 rooms at the Seal Beach Inn would have little impact on the hotel room inventory in the area.
In April 2006, property owner Marjorie Bettenhausen Schmaehl sent the state agency a long list of her efforts to sell the Inn to someone interested in keeping the hotel in operation, beginning as early as 1991.”However, we have not had any offers to buy the Inn, even having priced it at little more than land value,” she wrote.
Attached to the Coastal Commission report were letters from five real estate or hotel companies and one loan company, all of which said a hotel would not be viable at the site.
The current owner has submitted an exhaustive listing of her attempts to sell the subject property to a hotel operator for continued use as a bed and breakfast,” the report said.
Even so, the Coastal Commission wanted compensation for the lost visitor serving rooms.
According to the CCC staff report, the commission has used various calculations for setting “in-lieu” fees for lost overnight rooms. In some cases, the fee was based on the number of units lost, the report said.
In the case of the Seal Beach Inn, the fee was based on information provided in a 2004 letter from Hosteling International regarding a hostel that was being planned in Santa Monica.
With the fee imposed and most of the money earmarked for the Santa Monica project, the Coastal Commission allowed the Seal Beach Inn to be demolished so six houses could be built in its place.
No one opposed the change in the land use. The change was supported by the Seal Beach City Council. The story was the same in 2007 when the council voted to change the zoning for 400 Marina Dr. Yet the Coastal Commission staff opposed the change.
400 Marina Drive
Alan Schwendener applied to the Coastal Commission to demolish a one-story, 10-unit apartment so it could be replaced with four separate houses. The lot in question covered 13, 667 square feet. Coastal Commission staff recommended that the commission deny the request.
“The proposed project intends to commit a site that may be appropriate for visitor-serving commercial use to a private residential use,” said staff report W 18b. Commission staff argued that there were alternatives. The suggested alternatives included mixed residential-commercial development, a visitor-serving commercial use or higher density residential use.
The commission staff report said the CCC could consider other options for the site—meaning a change to residential—after an exhaustive, active effort to market the site for commercial use.
The Schwendener Company hired Economics Research Associates to evaluate the Marina Drive property’s economic potential. In a February 2007 memo, ERA concluded that the site was a poor commercial location. “Marina Drive, west of the Pacific Coast Highway, functions as a residential collector street rather than a commercial corridor,” the ERA memo said.
The memo said retail activity is concentrated near Main Street.
The memo also said Seal Beach had an adequate existing stock of visitor serving businesses. Locations mentioned in the memo included the Old Ranch Town Center (where the Target store is located), the center now called the Shops at Rossmoor and the Pacific Gateway Business Center.
The memo also mentioned the former Los Angeles Department of Water and Power property now owned by Bay City Partners. “The site remains undeveloped,” the memo said. “Representatives of the city have suggested that, despite significant interest in the site for both hotel and residential uses, the property remains undeveloped due to large greenbelt requirements in the specific plan which limit the amount of developable space.”
Then-director of Development Services Lee Whittenberg told the Coastal Commission that the property had been used for apartments since 1979.
John Pelochino, of the Pelochino family, told the commission that the family received many offers on the property during the years they owned it. The Pelochinos bought the property in 1971. They decided to sell in 2004. “In all the years we owned the property, we never had a potential buyer interested in purchasing the property for commercial or hotel use,” John Pelochino said in his letter to the commission.
In August 2007, the city sent the Coastal Commission a letter signed by then-Mayor John Larson that disagreed with the conclusions of CCC staff.
“The natural forces of a free market economy have determined for approximately 30 years that it is not feasible to operate a vistor-serving or overnight accommodation use on this site which has been zoned for such a use since at least 1963,” the Larson letter said.
The Larson letter also said the site was not suited for a hotel use because of lot size, inappropriate location and lack of interest by the lodging industry for at least 18 years.
The Larson letter said that there had been no private sector demand for overnight accommodations in that area of the Coastal Zone for 28 years.
The Larson letter took issue with CCC staff’s suggestion that 400 Marina Drive would be a good place for affordable housing. “The Coastal Commission lost permit jurisdiction over affordable housing in 1981,” the Larson letter said.
“Commission staff is now also suggesting how the zoning of properties within the city should be determined,” the Larson letter said. “This is not a function of the Coastal Commission and Certainly not a function of commission staff.”
Again, no one in Seal Beach opposed the change.
The arguments made the Seal Beach city attorney, the Larson letter, Economics Research Associates and the Pelochino family ultimately convinced the Coastal Commission. In spite of the CCC staff recommendation to deny the application, the state agency approved the demolition of the 10 apartments at the commission’s November 14, 2007 meeting.
Subhead: Ponderosa Homes
Coastal Commission records show that in 1982, Ponderosa Homes applied for a coastal development permit to build parks and 1,000 homes in Seal Beach. A hearing was set for May 1982. The Seal Beach City Council had approved the project.
The Department of Fish and Game and the California Coastal Conservancy looked at plans for the wetlands on the Ponderosa site. The Conservancy recommended off-site restoration of the wetlands in part to minimize the costs to the developer and loss of revenue to Seal Beach, according to a 2000 Coastal Commission staff report.
The Coastal Commission approved the plan “in concept,” but the plan was never implemented. Ponderosa Homes withdrew the application and abandoned the project.
Subhead: No MOLA
In November 1989, the Coastal Commission rejected MOLA Corporation’s plan to build 355 homes in Seal Beach. However, the commission gave the project a second hearing and approved it on Jan. 12, 1980. One condition imposed on the project was to offset the fill-in of 4 acres of wetlands by expanding the restored area of wetlands by 4 acres, according to the staff report.
“The MOLA project was also never undertaken,” said the report.
Hellman Ranch
In September 1998, the Coastal Commission approved the Hellman Properties’ application to build 70 homes and a golf course, construct 39.1 acres of wetlands, build what is now known as Gum Grove Park, provide “visitor serving amenities,” and reserve additional land for future wetlands restoration.
However, three environmental groups challenged the Coastal Commission’s decision to approve the project. The League for Coastal Protection, the California Earth Corps and Wetlands Action Network filed a lawsuit to stop the project. The case was settled out of court and Hellman Properties representatives applied for an amendment to the coastal development permit that eliminated the golf course portion of the project.
The 70-lot project was finally approved in October 2000.
