Sounding Off: No. 3 — redevelopment

Editor’s note: City Manager Ken Frank is retiring in December after 30 years with the city. In this column, he shares what he sees as the top 10 most significant accomplishments of the city administration during the past three decades.

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No. 3 on the list of city accomplishments over the last 30 years is: redeveloping Treasure Island Mobile Home Park into an oceanfront park and the Montage Resort & Spa.

Without question, the most controversial and divisive issue dealt with by the city over last 30 years was the closing of the private Treasure Island Mobile Home Park and the reincarnation of that 30 acres into Treasure Island Park and the Montage Resort.

After the purchase of the property from its longtime owners by an investment trust managed by Merrill Lynch, the first skirmish occurred over rent control for the mobile home owners. The City Council enacted an ordinance regulating the rent that could be charged by the property owner. However, a vote of the public overturned the council’s decision and voided rent control.

Residents in the mobile homes attempted to purchase the property but that effort was not successful.

The next struggle occurred over the closing of the mobile home park.

Residents were forced to leave Treasure Island, but the city mandated that they receive financial aid to assist in the relocation. Payments ranged as high as $25,000. Several low income seniors also received housing subsidies for apartments in town.

Once the site was vacant, the debate turned to the nature of the reuse. Some people advocated a public park on the entire site, a wonderful concept that was probably not financially feasible.

Months of joint Planning Commission and Design Review Board meetings produced a comprehensive proposal. When the City Council approved a Coastal Plan Amendment to allow a luxury resort, 31 housing units and a bluff top park, significant signatures were gathered to force a referendum on the city’s plan. In 1999, voters ratified the reuse plan approved by the council and the California Coastal Commission endorsed it as well.

Grading of the site was more expensive than initially projected and generated still another controversy as to whether the city had entered into a disadvantageous agreement with the property owner. The city’s share of the grading and park construction expense was clearly more than anticipated. However, revenues from the Montage Hotel also have exceeded projections and the hotel is by far the single most important revenue source for the city of Laguna Beach and for the Laguna Beach Unified School District.

Prior to the recession, annual hotel taxes from room rents from the Montage were about $3,700,000. Adding in sales taxes, property taxes, business licenses and business improvement district assessments, the hotel has been generating about $5 million per year for the city. (That amount is slightly less now because of the recession.)

Most of the revenues are dedicated to capital improvements, i.e., repairs of streets, parks, storm drains, retaining walls and public buildings such as the Community/Senior Center, Animal Shelter, Maintenance Yard on Laguna Canyon Road and the Marine Safety Headquarters.

In addition to actual cash received by the city, the agreement with the property owner requires the hotel to maintain Treasure Island Park at its expense forever. The hotel maintains all the landscaping, refinishes the benches and tables, collects the trash, cleans and supplies the two public restrooms and assumes the liability from any claim arriving from injuries in the park.

Since the city’s share of the grading costs were subtracted from hotel taxes that would have accrued to the city, no General Fund dollars have ever been expended for the park and no city payment will ever be needed in the future. Without any public costs, residents and visitors may access the several beautiful beaches, stroll or picnic in the seven-acre bluff top park, or patronize the restaurants in the hotel. Seventy parking spaces are provided and residents who have shoppers permits park for free. Moreover, drivers, cyclists and pedestrians along Coast Highway have ocean views that never existed when the mobile home park occupied the site.

In short, the arduous process leading to the opening of Treasure Island to the public was worth the struggle. The community now enjoys the substantial benefits of visiting Treasure Island while the city and the school district benefit from revenues which allow us to better serve the public.

Ken Frank is the city manager.