Newport Beach approves 10-year extension to development agreement with Hoag

The Newport Beach City Council approved a 10-year extension to a development agreement with Hoag Memorial Hospital Presbyterian on Tuesday, the fifth such amendment to the development contract.

According to a city staff report, the contract was established in 1994. Previous amendments made changes to the text to allow for greater flexibility on where existing entitled Hoag-related uses could be developed and contract extensions. The third amendment, made in 2019, came with the additional benefit of the hospital paying out $3 million in equal installments to the city to address homelessness.

To date, $600,000 has been paid to the city by the hospital.

Under the terms of the agreement, the contract would end in 2030, but the extension Tuesday will now push that to 2040.

Councilwoman Diane Dixon said the agreement protects Hoag’s entitlement for future development in the area where it currently is located in lower Pacific Coast Highway. That protection prevents current and future city council members from potentially revoking that entitlement to address things like planning for future housing.

The proposed amendment considered this week would have called for Hoag to pay an additional $3 million on top of the $3 million called for with the 2019 amendment, with the payments made to the city in $300,000 installments to be earmarked for homelessness services. Mayor Pro Tem Kevin Muldoon moved to cut the $3 million down to $1.5 million so the total outlay would be $4.5 million instead of $6 million.

“For those in the audience…these are called development agreements [where] an entity or a private builder — in this case, Hoag — will spend money in exchange for preserving their rights to build something,” said Muldoon. “Everyone knows I’m pretty much against these agreements in their entirety when it comes to private developers. I am especially when it comes to Hoag. They’re such a pillar to the community.”

“They did so much with COVID. I’d rather every dollar go toward better health care in the community than to a city that quite frankly is doing incredibly well due to high property tax revenue and due to federal funding that’s been spent,” said Muldoon.

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