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CITY BUSINESS



Donald Lamm, who oversees planning and development in Costa Mesa, calls himself an “odd duck” in government for his anti-bureaucracy stance. He prides the city on luring businesses to Costa Mesa without ever having to offer an incentive.

When Ikea International AS moved its store from Tustin to Costa Mesa, Lamm made it happen. He’s the point man for major commercial and residential development in the city.

Lamm has three titles,deputy city manager, development services director and executive director of the redevelopment agency.

He says he does a little bit of everything: designing city logos, writing his own speeches, tracking retail sales, naming streets and drawing up urban plans.

Lamm has been a city guy for 32 years. He held similar posts at Cypress and Tustin, prior to joining the city of Costa Mesa in 1986.

Right now, Costa Mesa is hot. South Coast Plaza is booming, with plans for high-rise condominiums nearby. Then there’s 17th Street, a funky enclave of unique shops. The expansion of the Orange County Performing Arts Center is nearing completion.

Lamm recently talked with Sherri Cruz at the Business Journal about economic development, Costa Mesa’s driving developer Henry Segerstrom, hot retailers and more.

What are Costa Mesa’s top businesses?

South Coast Plaza. As a singular shopping center,not an area or a region,South Coast Plaza’s sales of $1.2 billion are the highest gross sales worldwide.

In looking at the major producers at the mall, Nordstrom is always by far the No. 1 sales producer. I’m one of three in the city who’s allowed to look at all sales numbers from retailers. I do this each quarter to monitor if there are any in distress. Those we see on a downward climb, in my job as economic development director, we go talk to them and ask them if there’s anything we can help with. Do they need to expand, more land, another building?

It’s a business retention program. That type of attitude is why Ikea moved from Tustin three years ago. Ikea now is our third highest sales tax producer in the city.

Did you woo Ikea with incentives?

No, just the opposite. We’re probably the only city in the state where instead of offering incentives they had to pay us. In California, most cities offer economic incentives to attract new sales tax. We don’t need to attract new sales tax because we’re so successful. Cluster marketing works. Ikea knows their proximity to South Coast Plaza is extremely successful. They agreed to pay $6 million over 10 years in traffic improvement fees, which is extraordinary.

Most cities have an active economic business where you go out and seek other businesses. In Costa Mesa I don’t have to go out. They come here.

How did you find out Ikea was moving?

I’m usually the first contact if somebody’s very quietly seeking property. They say: “We have an interest in moving to Costa Mesa. Would you like to have a Lowe’s, Ikea, Costco, Home Depot?” My answer is absolutely. Go find a couple of pieces of property, give me a call back, and let’s start talking about it. That’s how all the large, major developments occur in cities. Very rarely do they come through a realtor for the large-scale projects.

I probably spend three to five meetings a week on these confidential meetings with owners of large portfolios. They first want to meet with the government to find out, “Are we business friendly?” I market the city. We don’t give anything away. We charge a lot of money to come here. But in return, our motto is we treat everybody with dignity and respect, and we’ll help them.

Has the city ever turned away business?

A couple of the big box retailers passed through here a few years ago. They would walk in the door, pound on the table and say if you want us, you have to pay us. I’d just grin and say, “Thank you very much. Feel free to go to the Inland Empire.”

Now the same ones are returning asking what do they need to do. We have a local economy of Costa Mesa, Newport and the Irvine industrial and John Wayne Airport areas. The local economy is so sought after that property sells itself. Most of the folks have equity financing that comes from East Coast real estate investment trusts, so many times the local owners of land will bring in their financing managers from these trusts. I’ll give them the facts and the numbers. That level of comfort is what makes us successful. It’s why I really love this business. I’ve been here 20 years. I’m the longest tenured director of all the cities in OC.

What was it like to direct Cypress?

I created the Cypress Business Park. I was with the initial planner that attracted the Asian Pacific business, Yamaha, Mitsubishi. After I completed that in 1983 the city of Tustin was informed by The Irvine Company that it wanted to convert its 2,000 acres of ranch land into a community. So I was given the invitation to come interview. I did. I took the job, moved to Irvine,Northwood,where we still live. I was the project management planner on the Tustin Ranch plan all the way through entitlement. I started up the Tustin Auto Center construction.

Once that started going, I was getting a little bored. I heard about high-rise office buildings near the shopping mall. They were proposing a 32-story office building. That was in 1986. I thought, “This will be fun.” Well, big mistake. The 32-story office building ended in a referendum by the voters, was turned down in lawsuits. I spent five years helping dig the city out of litigation. Those things happen.

Then we hit the slowdown in the early 1990s, which really brought everything in this county to a substantial pullback. But it was a process that cleaned out many of the developers that had no business being in the business, and lenders that weren’t responsibly lending. By 1995, 1996, the experts, who survived the recession, were left.

What is your take on Segerstrom?

Henry is unique in the world. He seeks out the finest businesses and pays relocation expenses, whatever. Because if he believes it’s a good fit in South Coast Plaza, that’s what he wants. And that’s what makes it so unique.

I heard he does his own recruiting.

He does. Henry, his former wife Ren & #233;e, who’s passed away, they traveled a lot. Henry’s an artist. He’s an incredible genius. No one has a vision like Henry, other than maybe Donald Bren.

To sit in a room and listen to him is just mesmerizing. People take it for granted what a luxury it is to have South Coast Plaza. You look at some of the high-end stores, you’ll see in the windows, “Paris, London, New York, Costa Mesa.”

How does Costa Mesa’s redevelopment compare to Santa Ana?

We’re not even similar. The redevelopment agency in Santa Ana actively goes out and purchases property with or without the power of eminent domain. They needed it years ago. Downtown Santa Ana, 15 years ago, had very serious urban decay problems. I give them credit for completely turning around that community.

The question for them: Is it proper for them to still acquire property just because they want to fill in the gaps? That’s what they need to decide. In Costa Mesa we gave up our power of eminent domain years ago. So we don’t ever purchase property through eminent domain. As the redevelopment director I don’t buy or sell any land.

Instead, our idea was, “Let’s come up with incentives to have reinvestment in the community. Let’s let the free market do what government wants done.” So rather than me having to buy the land, pay a fortune to have it remodeled, torn down and sold, why don’t I offer some incentive to get a private developer to go do what I would’ve done. They’re better at it and more efficient.

Our concept was to give them a second zoning,we call it a residential overlay zone. At the same time you can keep your commercial zoning. And that’s your incentive to go in and do something, because your property value goes up because it now has dual uses. We did not increase density. We kept our density low at 13 units per acre, which is still fairly low in this county. Our maximum density is 20 units per acre in all of the area south of the I-405.

We have a rapid, effective redevelopment system, so they reinvest. That’s why people say, “I can get through the system.” I have the same stable group (of employees) who have been doing this for 10 years. Every builder that’s built here since 1986 has seen the same four people. We have consistency. We have our network of developers. The developers who came here and built junk,we don’t welcome them back.

Who are the key developers?

In Costa Mesa you have two dozen major developers, corporations or publicly funded corporations, or major private family equity. That’s probably it for most cities, quite frankly. The perception is that there are developers everywhere. There really aren’t. The development industry is so expensive.

The other several hundred tend to be someone who wants to buy and build one or two homes or the neighborhood shopping center. With real estate that sells for $15 million or less, income real estate, that’s where 90% of your buyers are.

Irvine probably has even fewer because the Irvine Co. owns so much of the city. They really control what’s going to be developed and who are they going to sell to.

Do you feel like you should be living in Costa Mesa instead of Irvine?

No. Some people have argued with me about that. They’ve said you should live in the city where you work so you can better understand it. I’ve always come back and said the best thing I’ve done is not live in the city. I’m objective.

When you live and work here you become so involved. You know people,you see them in the stores. They’re going to call you at home 24 hours a day. I can leave here at 5 p.m. and go home to Irvine and no one knows what I do because Irvine doesn’t share the same TV channel. No one has the Daily Pilot (the community paper for Costa Mesa and Newport Beach).

I study the Irvine architecture styles. In Costa Mesa, they don’t like the Irvine, Santa Barbara Mission architecture. I’ve had to temper my tastes. I like it. It’s the quality that Mr. Bren has established for his ranch.

Costa Mesa doesn’t have one single style of architecture. So we take pride in having a variety of architecture, so long as it’s very high-end looking. I have to be careful not to voice personal opinions. I rely very heavily on a team effort. I delegate authority to my staff.

Do you write your own speeches?

I love to write. That’s my first love. I enjoy taking government bureaucracy and writing reports that people can understand. I don’t like regulation. I don’t like people telling me what to do in my personal life. I’m an odd duck. In Costa Mesa, we constantly change laws to meet the people’s needs rather than tell them what they’re supposed to do. I use the DMV as a comparison here with my staff.

I don’t want the customers out there to be treated like they are at the DMV. When they walk off that elevator, they’re to be greeted, helped in 15 minutes or less, no phone on hold more than 3 minutes, and smile. This is city hall. People shouldn’t be intimidated to come here. This is no different than any other business. Those are my customers.

It’s a mentality that’s very different in this industry. To me it’s the new direction where government has to go. I give lectures on this all the time. I can pick out bureaucrats in this county in 30 seconds.

Do you do the city logos in-house?

Yes, we do all of our graphics. We are very much into graphics in the city. I like it.

Do you have a graphics department?

All my planners are better trained than I am. I do the color selections and the layouts. To give you an idea what we just finished, these are our urban plans (points to urban blueprints). I create names.

SoBeCa (for South On Bristol Entertainment, Culture and Arts) was not my name. That was Shaheen Sadeghi’s. He’s owner of The Camp and The Lab. Shaheen’s a visionary, too. We use him a lot on committees.

I like to market things. I like to create ideas and vision for people. West 19th Street: We needed to give it a new village sounding name. I called it 19 West versus West 19th. It took people a few minutes to get used to it.

I created the logo with my staff, created the urban plans. I try to stick with standardized color. Our Costa Mesa colors are blue and silver, so I use blue in all our graphics. Blue’s my favorite color. It drives my staff crazy. I have blue upholstery, a blue car, a blue tie.

Do you see yourself at another city?

No, this will be my last. I’ll probably stay here five or 10 years more. I’m treated very well. I love the people. Quality of life means a lot to me. I’ve been married 30 years this fall, two kids just coming out of college. I appreciate what I have.

What you do on your off time?

I’m not a workaholic and I don’t take work home. I preach to people about that. I have very low blood pressure. Real estate’s a passion. I do a lot of boating. I’m a water skier. Most of my spare time has been spent in youth sports. I was president of Irvine Pony baseball, softball for five years.

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