A mixed-use development planned for 25 acres next to Laguna Niguel’s City Hall is expected to break ground this summer after county officials last month approved an updated lease agreement with two builders partnering on the project.
The plan for the Laguna Niguel City Center, part of which will use the former South County Justice Center on Crown Valley Parkway, was tweaked to better address the current taste and economics, officials said, with the commercial space now being less about having offices and more about offering resident- and visitor-serving businesses.
The once-robust plan to build 158,000 square feet of commercial space, including 77,000 square feet of office space, has been downsized. The office space has been reduced to 15,000 square feet, down 81% from the former plan, and the retail space is now set at 110,000 square feet. The project will build 275 apartment units.
A two-story parking structure planned in 2019 to accommodate office workers’ vehicles has been eliminated.
“Our market has changed quite a bit,” said Bryon Ward, a real estate developer with Burnham-Ward properties, who will head up the retail side of the anticpated $260 million project. “The changes to the site plan were to reduce the intensity of the project in order to simplify it, reduce construction costs, and enhance the viability of the project.”
He said part of the decision to reduce office space comes from a lack of “rent growth” in that sector of commercial property — a situation since COVID that has still left many spaces vacant, with many people still choosing to work remotely.
“People are reoccupying spaces at a much faster pace, but the way that office space behaves and the way workers work has a new normal,” he said. “We wanted to preserve all the things that the community loved about the project, and that is to revitalize the retail environments and create a new downtown for the city and a gathering place for the community.”
That means the project will be less dense, with more open space and more paseos for people to gather. There will also be more surface parking, which Ward said is more practical and better suited to retail. The old county library is also being replaced with a new branch.
“We’ve been able to reduce density, limit the things that are challenging to finance, preserve things the community cared most about, and create a lot of outdoor spaces,” Ward added.
While Burnham-Ward is designing and building the retail and library space, Sares Regis Group is building the apartments. The two developers operate as Laguna Niguel Town Center Partners.
The apartments are described as including “resort-like amenities.”
The new Laguna Niguel City Center — hoped to be a downtown for the community — has been a long time coming. After the justice center closed in 2008, city officials looked for ways to put the property to use, ultimately deciding on a development with a mix. Businesses will generate jobs and revenue for the city, and the apartments, which will include a variety of one- to three-bedroom units and townhouses, will help support the businesses.
In 2019, the county executed an up to 89-year ground lease for the former justice center property in a public-private partnership with the Laguna Niguel Town Center Partners after a previous developer pulled out. At the time, the project’s cost was an estimated $210 million.
The project required a general plan amendment, zone changes and zoning code amendments. It also needed a site development permit and an environmental impact report, all completed and approved.
This is the second public-private project in South Orange County in which Burnham-Ward is involved. The developer is also heading up the landside development of the Dana Point Harbor renovation, where the company will be responsible for the retail and restaurant components. That is a 66-year lease with the county.
Ward has developed other projects in Orange County, including Costa Mesa’s South Coast Collection, Newport Beach’s Castaway Commons and the Gateway Center in Mission Viejo.