City Flubbed Redevelopment, Court Case Claims

Although San Clemente's redevelopment agency hauled in almost $13 million in taxes over the last five years, it spent just $1 million on actual building projects, according to court documents filed against the city.

The case aims to overturn city approval of a four-story commercial-residential project on Avenida Victoria. But in so doing, it raises larger questions about how redevelopment money is being spent.

Forensic accountant Adam Minow, hired by the petitioners, says in court documents that he examined financial records from the redevelopment agency for a five-year period starting in June 2005. His analysis showed the city collected $12.8 million during that time, but spent just $983,000 on actual building projects to remove blight, which is what redevelopment agencies are designed for.

Of the remainder, $7 million was split between "community development" and paying agency debt and interest, and $50,000 went to “government services.” More than $5 million remained unspent.

Dan Bogoshian, one of the petitioners, said the Pier Bowl Specific Plan has been in place nearly 20 years to guide redevelopment in that area. But he said the package of zoning laws has never really been used to drastically improve the area, other than fixing sidewalks and other minor maintenance.

“Why this hasn’t been implemented is the story,” Bogoshian said. “They’ve been collecting money for the redevelopment agency for years.”

Joseph Larsen of the city’s law firm Rutan & Tucker said Thursday he couldn’t comment on the specific assertions in the court document, but he said attorneys were gathering information and arguments to counter the allegations.

The city’s response will be filed with the court May 4, he said.

Bogoshian and fellow Pier Bowl property owner Meggan Phillips filed the original petition in O.C. Superior Court opposing a specific Pier Bowl building, a building the council approved in August of 2010.

Bogoshian and Phillips contend the four-story commercial and residential project planned by the owners of the property at 614 Avenida Victoria—Jeanne Harris, Cheryl Pitt and some investors—violates zoning for the redevelopment area. The petition asserts the council violated city laws by approving the building in what was zoned as open space.

They’re asking the judge to order the city to rescind approval of the project. Bogoshian hired the forensic accountant to support his contention that the city is habitually disregarding its own zoning rules.

Larsen said the city will be standing by its decision to allow the building at 614 Avenida Victoria.

Bogoshian said he bought property on Coronado Lane, which runs parallel to Avenida Victoria, after the redevelopment area around the pier was already in place with specific, established zoning—zoning that would prevent the property at 614 Victoria from being developed.

“I bought this with the expectation of a park next door with a paseo,” Bogoshian said. “I’ve been trying to promote responsible in-fill down there for 27 years, and I bought it 35 years ago on the strength of it being a new RDA. I’ve spent a lot of money on planning and consultants.”