Irvine has more problems on its hands than just a weak real estate market if it wants to get redevelopment plans for the 2,800-acre commercial area around John Wayne Airport moving ahead.
Late last month, an Orange County Superior Court judge ruled in favor of neighboring cities Tustin and Newport Beach in a pair of lawsuits against Irvine that challenged two planned housing projects in the area, known as the Irvine Business Complex.
The decision is likely to stifle development plans for a number of proposed projects in the area that have yet to break ground, officials said, possibly for the rest of the year.
It’s the latest roadblock seen in the complex where some 14,000 homes have been proposed or approved by the city, but fewer than 2,000 homes,primarily upscale condominium towers and multifloor apartment projects,have been completed in the past few years.
A number of proposed housing projects on the books have been scuttled altogether or re-evaluated as potential commercial projects, while construction at other under-development housing projects have been slowed to reflect the market.
Complaints from neighboring cities aren’t likely to improve the pace of construction.
Lawsuits
Tustin and Newport Beach officials argued in their lawsuits, filed in mid-2007, that Irvine violated the law by approving Irvine Business Complex projects in a “piecemeal” approach, without the environmental studies necessary to asses the impact of turning the area’s commercial and industrial center into a largely residential area.
“Jamming an additional 20,000 residential units into areas bordered by both Tustin and Newport Beach without significant studies done on traffic and infrastructure impacts is not a conscientious governmental decision,” Tustin Mayor Jerry Amante said in a statement.
The lawsuits were supported by local businesses such as Irvine-based drug maker Allergan Inc., which was concerned by the amount of homes planned next to its sprawling campus along Dupont Avenue and Von Karman Road.
Superior Court Judge Stephen Sundvold agreed, saying Irvine “misrepresented both the nature of the (environmental study) document to the public and the nature of the environmental analysis it was undertaking.”
Irvine “created the confusion in the first place and the confusion cannot be argued away,” Sunvold said in his April 24 ruling.
Entitlement firms working with Irvine disagreed with the decision.
“Exhaustive environmental analysis” has been performed on all the projects moving forward in the Irvine Business Complex, said Tim Strader Jr., principal for Irvine-based Starpointe Ventures, a development consultant that’s worked on a number of projects in the area.
“We felt like we have done more than enough” to satisfy environmental requirements, Strader said.
The lawsuits fo-cused on two specific Irvine projects that are still in the planning stage, including a 290-unit apartment complex on Alton Parkway and an 82-unit condo project on Martin Street. The fate of those two developments now is in limbo.
Beyond that, the ruling is likely to put on hold development plans for about six Irvine Business Complex projects that were likely to go to city hearings for approval later this year, according to Strader. Projects that have already broken ground are not affected.
“The decision is appealable. The property owners and the city have to decide what to do next. It’s still too early to tell,” Strader said.
Other Developments
The lack of cooperation among the three cities was disappointing, Strader said, considering ongoing development at areas such as Tustin’s former Marine helicopter base, which is likely to add as much traffic to the area as the Irvine Business Complex’s planned development.
Among new projects, The District at Tustin Legacy, the 1 million-square-foot shopping center at the corner of Jamboree Road and Barranca Parkway that opened last year, is expected to get 22 million visitors per year, according to one of the project’s developers, Phoenix-based Vestar Development Co.
Tustin officials said that they and developers of Tustin Legacy will be spending more than $400 million to mitigate the ongoing development of their city’s former Marine helicopter base, which includes about 4,500 homes.
While the judge’s decision could push back additional airport-area projects by a year or more while the necessary environmental studies are completed, it’s is not a deal-killer for the projects considering the state of the housing market these days.
Entitlements for projects in the Irvine Business Complex effectively last for 20 years, giving developers that have solid financing for their land leeway in when they can move forward on any project.
Among projects now under construction, Lennar Corp. has halted active sales for low- and mid-rise condos at its 41-acre Central Park West project until conditions improve.
Notable projects that have been withdrawn due to market conditions include a trio of apartment projects totaling 900 units proposed by Newport Beach-based Olen Properties Corp., as well as a 16-story condo tower proposed by Los Angeles-based KB Home, which was planned near Jamboree Road and the San Diego (I-405) Freeway.
Plans for a pair of 14-story condo towers near the intersection of Jamboree Road and Dupont Avenue have also been withdrawn and are being reworked to include office space and hotels, alongside a project planned by Houston-based Hines Interests LP.
Another four towers of condos planned by Canada’s Bosa Development Corp. at Maguire Properties Inc.’s Park Place complex, totaling more than 500 homes, also are in limbo because of the poor housing market.
