Segerstroms outline Home Ranch development agreement

Lolita Harper

COSTA MESA -- If it approves the Home Ranch project, the city could

reap more than $15 million in community benefits.

Final details of the development agreement for the Home Ranch project

were put in place this week, including traffic mitigation projects, a

sales tax revenue guarantee, an educational fund and the preservation of

the historical Segerstrom Ranch. The 20-year development agreement would

take effect when, and if, the City Council approves the project.

The city staff has recommended the project be approved with slight

modifications, Planning Commissioner Chairwoman Katrina Foley said.

“City staff has worked really hard to come up with considerable public

benefits to justify their recommendation of the project,” Foley said.

One term of the agreement calls for a $5 million sales tax guarantee

over five years, Freeman said. The city will have a specific yearly

amount of sales and use tax guaranteed, and if the retailer -- most

likely Ikea -- does not hit that mark C.J. Segerstrom will cut a check

for the rest, Freeman said.

Even if Ikea goes dark in the second year, the city is guaranteed $5

million, he said. Freeman called this part of the agreement “unusual but

very aggressive” on the city’s part.

“With all the talk of the increase in sales tax revenue, they

basically told us to put our money where our mouth is,” he said.

The guarantee shows that C.J. Segerstrom is confident that Ikea is

capable of bringing in significant revenue to the city, Freeman said.

However, if Costa Mesa brings in $5 million in the first year, the terms

of the agreement have been satisfied, he said.

In addition, C.J. Segerstrom & Sons agreed to front the costs for all

necessary traffic mitigations, totaling about $8.6 million, Freeman said.

Some of the improvements include the widening of the Fairview bridge and

the necessary adjustments for a new Harbor Boulevard and Susan Street

exit from the San Diego Freeway.

“Costa Mesa can gain interest on the lump sum while designing and

getting approval for the projects,” said Carol Hoffman, spokeswoman for

C.J. Segerstrom & Sons.

The upfront payment also allows for the projects to be completed, or

near completion, before the effects are even felt, Hoffman said.

The agreement also calls for the preservation of the historic

Segerstrom home, guest house, garage and barn on a 1.5-acre parcel of

land. The Segerstrom family will set up a $250,000 endowment to form a

nonprofit foundation to maintain the site, officials said.

Many other benefits are outlined, including possible funding for a new

fire station and a guarantee that the 192 homes will be owner-occupied

only -- not rentals.

Both the Planning Commission and City Council must approve the project

before any of the terms of the development agreement take effect,

officials said.