Balancing Jobs, Parks, Homes in Orange County

Foothill Ranch, with three jobs and a quarter-acre of parkland for every household, could well be the urban village of the future.

The 2,700-acre development in the Saddleback Valley of south Orange County eventually will include 3,900 housing units, schools, a library, a fire station and a sprawling commercial and industrial core worthy of a city.

And before it is completed, its creator, Hon Development, will have made more concessions to county government than have ever been given in Orange County, including 800 acres for commercial or industrial development, 1,100 acres for a natural park and $40 million for a $240-million road project in south Orange County.

“There’s no stupidity here. . . . It’s simply that both the developer and the county understand the Southern California environment now and its potential in 15 years,” said Rocky Tarantello, a USC associate professor of business economics and head of Tarantello & Co., a Newport Beach real estate market research firm.

In 1986, Hon Development paid the Bank of Montreal a little less than $35 million for the land that is east of the El Toro Marine Corps Air Station and north of Mission Viejo.

Known for many years as the Whiting Ranch, the land took on the identity of a loser’s dream in the 1970s and ‘80s as it passed through the ownership of one wishful developer after another and eventually was turned over to the bank in lieu of foreclosure.

Hon spent two years negotiating a development agreement with county supervisors, planners and natural-resource officials, with the negotiations taking place at the same time residents were putting increasing pressure on politicians to restrict growth and put unheard-of cost burdens on developers.

When the development received Planning Commission approval last October, county officials extolled the final agreement and the concessions that had been won.

Among the concessions, Hon agreed to:

--Commit 800 acres to commercial or industrial development, aimed at creating more than 10,000 jobs. The land required for commercial or industrial use has been doubled since another developer received zoning approval to build on the ranch early in the decade.

--Contribute $40 million to a $240-million road project in south Orange County, with most of the money going for roads that won’t even be in Foothill Ranch. The community will be bisected by a 2.7-mile stretch of the Foothill Transportation Corridor, a freeway that eventually will cut across southern Orange County. Hon expects to spend another $40 million on other roads in the development.

“It’s unprecedented,” project manager Chris Downey said of the road concession. “But it is a practical reality.”

--Deed 1,100 acres to the county for a natural park. In all, 1,393 acres, or about half the land in the development, must be either park space or open space, with only 530 acres for residential development.

--A comprehensive resource-management plan that requires preservation of dozens of acres of vegetation and an extensive amount of wildlife. The plan also involves the conservation of 20,000 oak and sycamore trees, including the relocation of 600 trees.

300-Year-Old Oak

Among them is the 300-year-old Alton Oak, perhaps the oldest tree in the county. At 17 feet around the base of the trunk, it is also perhaps one of the most deeply rooted. Hon officials say they still haven’t figured out all their moving plans for it.

County officials are calling the development plan for Foothill Ranch state of the art.

“This development brings a new philosophy of growth management into the county,” Supervisor Gaddi Vasquez said. “It addresses the growth issue, and it also answers the problem of funding for an infrastructure, which the county cannot provide.

“The concessions mean we’re satisfying not only our own requirements, but we’re making up for shortfalls dating many years,” said development company President Barry Hon.

Bill Soto, Foothill Ranch project manager for William Lyon Co., which will build 1,712 housing units in the community, said that the Foothill Ranch agreement with the county will be the model for future developments.

‘No Acid Test’

“There’s no reason to think there will be any steps back. This is a progression from the past that will continue,” Soto said.

However, there may come a time when concessions required by the county will not be economically feasible, said real estate analyst Robert West, a principal in Tarantello & Co. and a member of the Irvine Planning Commission in the early 1970s.

But, Tarantello said, “There’s no acid test to determine, when the time comes, that it isn’t feasible.” He said he doesn’t believe that time has arrived.

“There were several times in the planning process when we had to ask ourselves if it made sense to go ahead,” Hon said. “Sometimes the momentum helped carry me.”

The planning agreement will make Foothill Ranch a different kind of community from any south Orange County has had before, county officials said. Builders said the county’s stringent requirements will make Foothill Ranch a more convenient and desirable place to live.

Worth $3 Billion

When built out early in the next century, Hon Development estimates that the Foothill Ranch development will be worth $3 billion, at the dollar’s current value.

Right now, land is being graded and roads are being poured, and the first homes will go on sale in the fall, with units to be occupied by early next year, Downey said.

He said the entire residential development is expected to be complete by the mid-1990s, depending on the housing market and the direction of interest rates.

Lyon Co., of Newport Beach, is the primary residential builder. It is putting up 1,372 houses and 340 apartments, with houses ranging from $125,000 to $380,000 at current prices. Newport Beach-based J. M. Peters Co. and Bramalea California Ltd. each will build 507 houses, including many that will be at the high end of the market.

Peter Perrin, president of Costa Mesa-based Bramalea, said the homes will have a “semi-custom” look. “The neighborhoods are going to be an aesthetic pleasure because that’s our goal and the county’s.”

Abundance of Jobs

Neighborhoods will be connected by pedestrian trails that also link with parks, the school, the Borrego Canyon Wash and Serrano and Aliso creeks.

Soto expects Foothill Ranch to be attractive to younger people now living in north Orange County, and those in south Orange County who want to move up to a more expensive house.

He said a main attraction for the area, particularly several years from now, will be the abundance of close-by jobs, which in some cases could be in easy walking distance from someone’s home.

“The way it is now, most people in south Orange County must get on the freeway to get to work,” he said.

The industrial and commercial area, which will cover about 500 acres, will be slower to develop, with the first jobs not expected before 1991.

The number of jobs ultimately could reach 18,000 if Foothill Ranch becomes largely a setting for offices. With greater concentration on light-industry development, as few as 12,000 jobs would be created, Downey said.

Industrial, Commercial Area

The area for industrial and commercial development is in Foothill Ranch’s southern part, an area that is close to the El Toro air base, and therefore does not meet noise standards for residential development.

“We don’t know what will be demanded in the commercial-industrial area, or how fast the area will develop,” Downey said. “If the next eight years are like the last eight, it will go very fast.”

Real estate experts said the area has the potential to become a major business center similar to the Costa Mesa Bristol Street business corridor, which surrounds the Orange County Performing Arts Center, or the MacArthur Boulevard corridor near Orange County’s John Wayne Airport.