Costa Mesa Unplugged: City denies self for ‘something better’

It doesn’t violate the imagination that a city council — its political fortunes anchored to the wholesale renovation of an entire section of town — would demonstrate some reasonable accommodation of a developer with the guts to invest considerable skin in the conversion of ramshackle apartments to sprite new condominiums.

But that doesn’t appear to be what we have in Costa Mesa.

The misfortunes of developer Barry Saywitz seem to indicate as much.

The abrasions he’s sporting these days are compliments of the extraordinary keyhole through which the Costa Mesa Planning Commission and City Council pulled him in his bid to retool 12 Victoria Street apartments into virtually new condominiums.

Don’t think the broader development community hasn’t noticed. It has.

Rather than green light his plan to refurbish the tired 47-year-old community as proposed, both the Planning Commission and City Council ruled he could proceed only if he bulldozed three of the dozen units to accommodate more open space and additional parking.

The condition — the most onerous of 32 others chained to the application — added up to a nearly $1.5 million haircut for Saywitz.

And why?

Because both the Planning Commission and the City Council had their jaws locked around a want for more open space and parking slots for the project.

This despite the fact the project conformed to Costa Mesa’s current rules for such things. In fact, Saywitz’s application asked for no variances from current city code.

Nevertheless, the City Council held Saywitz’s project hostage for a bit of extra grass and perhaps four additional parking stalls.

In effect, Saywitz was asked to pay a $1.5 million ransom. He refused, telling the council that such a demand made the project an economic stinker, and the 1960s-era community “will stay as apartments for a long, long time.”

Saywitz said he’s reviewing all his options, which is most often code for “I’m chatting with my attorneys.”

A slew of ironies and observations emerged from the Saywitz mugging.

First, several council members routinely bemoan Costa Mesa’s backward housing ratio.

Just 40% of Costa Mesa’s homes are occupied by their owners; 60% are renter occupied. Most cities enjoy the exact opposite.

So it’s perplexing that Saywitz — a developer with a pretty long history in Costa Mesa — would get knifed on a variance-free project that would help correct that imbalance.

Here’s another irony. Mayor Allan Mansoor told Saywitz, “It is a nice project; better than what is there.”

And then he voted against it.

Why? “I’m holding out for something better.”

Nice, mugsy. Will that be your legal defense?

And if we can harvest any clue from the public comments of the mayor and Councilman Eric Bever, “something better” is not apartment-to-condo conversions of any kind, but rather complete tear-downs and new development on combined lots.

The problem is the market may not want or be able to deliver “something better.”

In the first place, the current seizing up of credit and capital markets coupled with the now widely anticipated prolonged contraction of the real estate market will put the brakes to any new development in Costa Mesa for some time.

Smart developers will wait to see what impact the contracting market has on land and home values before committing significant money to new-home developments.

But what’s worse is the Saywitz episode has the development community spooked that there’s no certainty in the Costa Mesa development process.

It’s just too risky to do business in a town where project applications with no variance requests are torpedoed because the entitling authority wants “something better” or is holding out for economically infeasible lot-combination developments.

All this may well put the brakes on any material improvement to the Westside for a very long time.

Or, at least, well past the next election cycle when voters are going to want to see some proof that the current council can work with the “free market” to deliver the goods.