Arrimus Capital is hopeful the third time is the charm for a prominent apartment proposal in Santa Ana.
The Newport Beach real estate investment firm has submitted a new proposal for a seven-story apartment building totaling nearly 500 units at 2525 N. Main St.
The estimated $90 million development, dubbed the Addington, would turn an 81,000-square-foot office building across the street from the Discovery Cube in Santa Ana into a residential project.
The newest plan takes on a long-standing dispute between a venture that Arrimus heads up and the city officials and some of its residents.
Arrimus is bullish the new proposal will be approved, despite prior nixed plans, due to a new state law that aims to spur housing development, according to Caroline Chase, partner at corporate law firm Allen Matkins Leck Gamble Mallory & Natsis LLP, which represents Arrimus.
“Implementation and enforcement of state housing laws, including AB 2011, is a matter of significant public interest,” Chase said in an email to the Business Journal.
Prior actions by the city “are legally ineffective,” she added.
Arrimus invests largely in student housing, apartments and industrial properties, and has overseen approvals at other apartment projects elsewhere in Santa Ana.
Arrimus is headed by Chris Lee and his father, Ray Wirta, the former president of Newport Beach-based Irvine Co. as well as former chairman of L.A.-based brokerage CBRE Group Inc.
Arrimus acquired the nearly 6-acre property for almost $17 million in a 2017 deal with L.A.-based Vineyards Development, under the AC 2525 LLC name. Vineyards Development’s Ryan Ogulnick, who’s worked on several other apartment projects in Santa Ana, is another AC 2525 venture partner, records indicate.
The office, built in 1982 just north of the Santa Ana (5) Freeway, has been largely vacant for several years.
Prior to buying the property, Arrimus submitted plans to turn the office into a 517-unit multifamily project.
Those initial plans were nixed in the wake of pushback from city residents living in nearby Park Santiago who expressed concerns about parking and traffic.
As a result, project developers in 2019 halved the number of apartment units to 256.
Residents still called for the project to be pulled. In 2020, a successful referendum petition headed by those residents prompted Santa Ana City Council members to withdraw their prior approval of the development.
Ogulnick then filed a lawsuit that challenged the validity of the referendum petition, but ultimately lost.
“The city’s continued refusal to process and approve the application for the project … will not be ignored,” Chase wrote to Santa Ana’s planning department.
Plans for the project have been quiet since, until the recent proposal filed with the city in July.
The new proposal calls for 498 apartment units and 648 on-site parking spaces.
A recently approved law that aims to address California’s housing crisis—Assembly Bill 2011—grants near-automatic approval for Arrimus’ project, Chase said.
AB 2011 aims to provide streamlined approval to rental housing developments in commercial areas if a portion of the project is designated affordable.
The city of Santa Ana has issued an ordinance to exclude 2525 North Main St. from the widespread eligibility that AB 2011 provides.
California Attorney General Rob Bonta, however, determined the city’s ordinance to be invalid, saying it was not supported by evidence of an immediate threat to public welfare.
Nearby Housing Projects
If passed, the project would join the ranks of other notable multifamily projects in the works for Santa Ana, which has seen a heavy amount of new apartment development in recent years.
The nearby MainPlace Mall is currently undergoing a major renovation, with several hundred rentals being added to its grounds.
The Village Santa Ana, the largest development plan in several decades for the Segerstrom family, aims to revamp the family’s 17.2-acre South Coast Plaza Village shopping center into a new hub with 1,583 residential units, up to 300,000 square feet of office and up to 80,000 square feet of retail.
The Village sits on the opposite side of Sunflower Avenue as South Coast Plaza.
Adjacent to Segerstrom’s project is Related Bristol by Irvine-based Related California.
That project proposes 3,750 apartment units, 350,000 square feet of retail, 200 senior housing units and a 250-room hotel.
OC’s largest apartment project that’s currently under construction is also in Santa Ana: Greystar Real Estate Partners’ 1,100-unit apartment complex, dubbed Warner, on a 15-acre parcel previously used by Ricoh Electronics at 2320 Redhill Ave.