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Council pursues acquisition of alternate South Laguna property for potential fire station

By SARA HALL

City Council unanimously agreed this week to move forward in acquiring another property in South Laguna to potentially build a replacement fire station.

After more than a year of contentious split votes on a previous location and applying the potential pressure of eminent domain on the alternate property owner, there’s a consensus of support for the new location. 

Council voted 5-0 on Tuesday (Sept. 20) to approve moving forward with the acquisition of 31796 South Coast Highway (currently occupied by Laguna Beach Dental Group) for use as the future fire station #4 and related public use facility.

The site was previously identified as a preferred location for a potential fire station, but the property owner previously declined to sell. After numerous discussions, including about eminent domain and the potential tax advantages, a deal was made.

“This property owner had no interest in selling originally, so you did a great job…persisting through all of it,” said Mayor Pro Tem Bob Whalen, commending the staff. 

The purchase price is $6.1 million ($5.4 million appraised value plus $700,000 for loss of lease revenue), plus related closing fees.

Council approved appropriating $1.3 million of the remaining America Rescue Plan Act funding and temporarily borrow $1 million from the Vehicle Replacement Fund for the purchase. The Vehicle Replacement Fund will be repaid once the property located at 31729 Coast Highway (formerly occupied by Italian restaurant Ti Amo by il Barone) is sold.

The property is being purchased specifically for use as a fire station. 

On September 7, the Planning Commission unanimously determined that the proposed acquisition of the property at 31796 Coast Highway is consistent with the general plan.

The age and condition of the current South Laguna station at 31646 2nd Ave., combined with advancements in emergency service standards, have rendered the existing facility outdated.

The current 4,000-square-foot station #4 was built in the 1940s. It has been determined to be structurally vulnerable, outdated and it is in need of replacement. Staff has been surveying properties since 2019 to find a suitable replacement.

Search criteria included: Lot size of approximately 10,000 square feet or larger, with a building envelope of 5,000 square feet; location does not cause significant alteration to current response time or first-in district and Coast Highway frontage with side street access off the highway.

Council pursues acquisition 31796 Coast Hwy

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Photo by Mary Hurlbut

The city is taking steps to acquire 31796 South Coast Highway for use as a future fire station

The 31796 S. Coast Highway property was listed as an option during the June 29, 2021 council meeting when staff presented a South Laguna property analysis to replace fire station #4.

City staff had multiple discussions with the property owner who “steadfastly” indicated that he is not interested in selling the property to the city, Assistant to the City Manager Jeremy Frimond explained at the June 2021 meeting.

Of all the sites listed in a prior feasibility report, 31796 Coast Highway was ranked as the “most desirable,” said Assistant City Manager Ken Domer at the council meeting this week. 

“Initial approaches to the owner were declined, he was not interested in selling to the city,” Domer said. “The city, needing a site, purchased 31727 – the Ti Amo site – instead.” 

Last year, during several contentious discussions and split council votes about the Ti Amo property, the city authorized an agreement to prepare an initial study for the site, found it consistent with the general plan, offered $2.7 million, and completed the steps to close escrow

Although a specific use for the former Ti Amo site wasn’t outlined at the time of the purchase, at the June 2021 meeting Frimond said the Ti Amo property was the most suitable location and had the most potential for a fire station.

But at the same time, staff continued reaching out to the property owner of 31796 Coast Highway.

Now, based on conversations about potential benefits of friendly condemnation and eminent domain, the owner is in agreement to sell, Domer reported.

“But we had a renewed approach and with the guidance of the City Council, discussion of the use of eminent domain under friendly conditions helped facilitate the change in interest by the property owner,” he said.

Eminent domain is the ability of a local government to acquire a property through the courts, while “friendly condemnation” is the act of an agency taking property for public use with an agreement by the owner to move forward.

There are potential tax advantages for the property owner under IRS code 1033 exchange, which covers “involuntary conversion,” and allows property owners to avoid the tax liability on the property they were forced to sell due to eminent domain or condemnation (or other specific reasons). 

“While the use of eminent domain requires specified procedures, if a property owner is a willing seller, the process for ‘friendly condemnation’ still includes the positive tax advantages for a seller and allows the two parties to process through the acquisition process in a typical, or friendly manner, form of purchase,” the staff report reads. 

Under “friendly” conditions, the process can be relatively simple and quick, Domer said.

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Following City Council direction, staff has been working with property owner John Mazza to acquire the site. While direction has primarily been given during closed session meetings over a year of negotiations, the city attorney reported on July 12 that council directed staff to bring back a purchase agreement in an open session and to begin due diligence related to the property.

“I…am willing to sell the subject property to the City of Laguna Beach under the threat of eminent domain for the relocation of fire station #4 to serve the South Laguna Beach community,” Mazza wrote in a September 6 letter to the city council.

Staff noted that 31796 Coast Highway has “several benefits” over the former Ti Amo site. 

The new property is large, mostly flat and sized for modern firefighting needs, he said. 

It also allows for ingress from Coast Highway and egress onto 5th Avenue, allowing for a pass-through vehicle bay. That’s an important feature, Domer noted, because at the Ti Amo property the fire engines and ambulances would have had to back into it.

“That is not a safe approach,” for emergency service vehicles, Domer said. 

The site encompasses three parcels totally approximately 0.4 acre (17,447 square feet).

It’s located at the intersection of Coast Highway and 5th Avenue. The southern side of the properties abuts Coast Highway, the western side is adjacent to a single-family residence leased by the South Coast Water District since 2017, the northern side abuts Virginia Way, and the eastern side abuts 5th Avenue. 

There’s also a vacant lot across 5th Avenue which was previously suggested as a possible location for the fire station, but the property owner was unwilling to sell or unresponsive. A few residents previously suggested eminent domain for that location.

The acquisition is contingent upon the city’s due diligence process and finalizing CEQA initial study-mitigated negative declaration. 

The action authorized the city manager to execute all applicable documents to include, but not limited to, continued due diligence and environmental determination; and direct the city manager, upon assumption of the current lease with the building tenant, to negotiate a termination date to align with completion of design and entitlement process.

The city entered into an agreement with Rincon Environmental to conduct the initial study to determine the proper CEQA determination. This process is currently in progress and the public review period is expected to start on or about September 21, with potential City Council consideration of the determination on November 15.

It is estimated that escrow will close on January 4, 2023 or shortly after.

If acquired, the city will begin working with the current lessee (which it will assume all lease obligations) and said lease has an initial term expiration of Nov. 30, 2024, with a single five-year extension at the option of the lessee. 

The long-term lease also adds to the valuation of the property, Domer explained. 

The city conducted two appraisals: In September 2021 it was valued at $4.4 million; and earlier this year in March is was appraised at $5.4 million.

While the city would begin a future design process for a fire station, no development activity is expected until after 2025, if not later. Any future proposed use and development of these lots will be reviewed for consistency with city code and will be subject to public hearings before the Planning Commission and the City Council.

Council pursues acquisition of alternate current fire station

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Photo by Mary Hurlbut

The current fire station #4 in South Laguna 

During public comment, several members of the Emergency and Disaster Preparedness Committee spoke in favor of the purchase. 

The old station is no longer adequate to serve the community, it’s outdated and doesn’t meet the current standards to withstand a seismic incident, they all agreed. 

EDPC Vice Chair Tom Gibbs said the group has discussed this since he joined five years ago.

“We’ve talked about a lot of properties. It’s great to see this piece of property because it is by far the best and I think will serve our city well,” he said. “The city has been looking for some time for the right replacement property and has finally found property that works very well – it is likely the best the city will find.”

Laguna Beach faces serious fire and other public safety risks, yet the city’s fire stations and other critical infrastructure are far from up to date, Gibbs said. They are in need of capital improvements and modernization that has been long deferred, he added. 

“The worst is fire station #4 serving South Laguna,” he said.

It’s “grossly inadequate” to meet the current needs of the community, Gibbs commented. The building is not seismically resilient and could be lost in the event of an earthquake.

“I’m not exaggerating to say that replacing fire station #4 is one of the most urgent public safety needs for Laguna Beach,” Gibbs said.

They can’t afford to let this go, he added. Gibbs urged the council to jump on the opportunity and construct the facility expeditiously as possible. 

“When completed, the new modern fire station #4 will be a sigh of relief to our South Laguna neighbors and Laguna as a whole,” Gibbs said.

Matt Lawson, chair of the EDPC, agreed with his colleague’s comments. 

Given the poor conditions and significant limitations of the existing station, it wouldn’t be operational following an earthquake, Lawson said. 

Public works is finishing a seismic safety evaluation of city structures and provided preliminary results to EDPC in July.

“They were very sobering, especially with respect to station #4,” Lawson said. “Bottom line: This 1940s station is no longer adequate to meet 21st century public safety needs.

“Our firefighters and residents, especially those in South Laguna, deserve better,” he concluded. 

Longtime resident John Thomas agreed it’s a great location for a fire station. It’s “far better” than the Ti Amo site, which didn’t meet the criteria from LBFD, he added.

Other speakers agreed that this location was better suited for a fire station compared to the Ti Amo site. Residents spoke out about their concerns with the problems at the property and the city listened and continued to search for the best possible site, noted Ann Christoph.

“Thank you for not resting after you acquired Ti Amo,” she said. 

It’s a wonderful site and, as a landscape architect, she’s looking forward to beautifying the corner.

“We’ll no longer have to look at that big asphalt lot, we’ll be looking at a public safety facility that we’re proud of,” Christoph said. 

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Sara Hall covers City Hall and is a regular contributor to Stu News Laguna.

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