Rancho Project Looms as Budget Drain

City officials worry that San Clemente will get stuck with traffic jams and extra police and fire costs from a 1,610-home development on county land at the end of Pico Avenue.

There are no easy answers to governing the Rancho Mission Viejo company project, according to San Clemente Communty Development Director Jim Holloway, who spoke on the topic at Wednesday's San Clemente Planning Commission meeting.

Among the potential headaches:

• A new fire station would have to be built and maintained, at a cost of about $2 million a year, but tax revenue from the new homes wouldn't come close to supporting it
• Police patrols would have to be extended to the area
• Pico Avenue, the sole entrance and exit for residents of the planned development, would be jammed.

"Don't jump to conclusions," Holloway advised. "Craft a policy that brings out a really thoughful process."

Planning Area 8

Development of the Rancho project was originally expected to kick off about 20 to 30 years after it was approved by the county near the beginning of the 2000s.

"But that's not true anymore," Holloway said. "It may be, but not necessarily."

Now that themilitary research and development facility in the tract has vacated its lease, the may accelerate plans for development, Holloway said.

At issue for San Clemente is a 1,200-acre chunk of space called "Planning Area 8," part of Rancho Mission Viejo's overall plans for 24,000 acres and 14,000 units.

The part that abuts San Clemente originally included three other big tracts of land, but a consortium of environmental groups sued Rancho, and a judge ruled the company couldn't build in planning areas 6, 7 and 9 because all the parcels -- including 8 -- are in the San Mateo watershed, Holloway said.

The ruling confined RMV to just 500 acres of Planning Area 8, but allowed the same number of homes for the development as a whole -- making areas 1 through 5 and 8 more dense.

What Will Go in Area 8?

No one knows exactly what Rancho wants to build in Planning Area 8, but it has approval for at least 1,610 residential units--and possibly more, depending on how one reads the loosely written clause in the development agreement, Holloway said.

"They've talked about golf courses, they've talked about equestrian estates. Because [the original construction date] was so far off, they didn't spend a lot of time figuring out what they were going to put in out there," Holloway said. "But they may not be thinking like that now."

Commissioner Nesa Anderson asked if there would be a scenario in which San Clemente would want to annex Planning Area 8?

Yes, Holloway said: If RMV built some kind of large resort -- perhaps geared toward horseback riding enthusiasts -- it would mean few residents needing expensive city services, but plenty of hotel-room taxes flowing into city coffers. But he said it was unclear if such a resort would be economically feasible.

OC May Stick San Clemente with the Bill

As things stand now, however, the project is likely to bring in thousands of new residents who will strain San Clemente resources.

An extra fire station would cost $2 million per year to maintain, but taxes from the area couldn't pay for it, Holloway said.

And traffic from the development would choke Pico.

"The county historically has paid very little attention to governance after the development is built," Holloway told the Planning Commission. "Rancho Mission Viejo does a pretty good job... but they have some pretty big governance problems... particularly with police and fire. [And] the traffic that's going to be generated from Planning Area 8 -- we have no control over that."

Planning Commissioner Lew Avera pointed out that because of the costs, the county would try to get out of responsibility for overseeing Planning Area 8 services.

"For this reason alone, the county will be pushing us to annex this," he said. "They'll be trying to get rid of land all over the county."

Commissioner Michael Kaupp asked, "If they want to unload this so bad on San Clemente, does that give us authority to shape what happens?"

Not really, Holloway said.

"The county is the only one that can force them to address this, but the deal was pretty much done with the development agreement," he said. "My experience is that city talks with the county are fruitless unless you're a Santa Ana or an Anaheim. To be blunt, we have zero weight with the county. We have a good relationship with the Ranch, but they are what they are. ... The developer doesn't really have any interest in long-term governance issues."