Work on the Avenida Vista Hermosa bridge at the Marblehead Coastal site is starting, and city staffers expect it to take nine months.
When finished, the bridge will help pave the way for a planned 313-home housing project.
But . The project was a partnership between developer SunCal and the failed financier Lehman Brothers to develop one of the largest pristine coastal properties in Southern California.
SunCal did not declare bankruptcy as Lehman did, but the housing crisis forced it to drastically cut back staffing and activity. SunCal is now battling Lehman in U.S. Bankruptcy Court over control of the project.
SunCal and Lehman have drafted competing plans for reorganizing the business they set up to administer the Marblehead development. On June 13, Judge Erithe A. Smith ruled in U.S. Bankruptcy Court that SunCal should have the opportunity to present its reorganization plan for the project alongside Lehman's proposed plan, said SunCal spokesman Joe Aguirre in an email.
City Attorney Jeff Oderman said last month that the next court hearing on the issue is in the fall, and city officials have described the process as “glacial.”
In the meantime, the San Clemente City Council is expected to budget $90,000 tonight for inspectors from Bureau Veritas to keep an eye on the bridge-building process. Most of the other infrastructure work on the site was paid for by the insurance company Arch when the project stalled, but there wasn’t enough money in the settlement to pay for inspection, according to a city staff report.
The vote on the contract will be on the council agenda in the coming weeks.
Work has been completed on sidewalks and street improvements to Via Socorro and Avenida Pico. Also completed is the sewer system and reclaimed water lines, slope grading, retaining walls, striping and traffic signals.
Work still left to be done, aside from the bridge, includes a storm drain system for the commercial portion of the site, an outlet mall to be built by Newport Beach developer Steve Craig. (Craig told San Clemente Patch in December that he was ready to build, but his contract for purchasing the land came with the promise of this infrastructure being complete.)
SunCal is also battling Lehman over 17 other developments in California, but SunCal as a whole seems poised to regain some footing with some key land deals in other parts, according to the Orange County Business Journal.
Editors Note: Because of a reporting error, a previous version of this article incorrectly stated a judge's ruling on Marblehead reorganization plans. Patch regrets the mistake.