NEWPORT BEACH : Official Suggests Upper Bay Purchase

In a surprise move, a councilwoman on Monday proposed that the city spend $90 million to buy 77 acres of prime, bay-front property owned by the Irvine Co. if city voters would agree to a tax increase to pay for the land.

The suggestion by Councilwoman Ruthelyn Plummer, which came during a council discussion of the Irvine Co.’s development plans for several parcels in Newport Beach, caught officials at the giant development firm by surprise.

“Certainly, they’re important properties to us,” said Thomas O. Redwitz, vice president of land development for the company. “Is the concept new? No. Is the city’s involvement today new? Yes.”

Last year, Newport Conservancy, an environmental group headed by Councilwoman Jean H. Watt, considered purchasing some of the company’s open space. The group is continuing to raise funds to that end.

But putting the council behind the purchase with the backing of a city bond could help seal a deal, Watt said.

Under Plummer’s plan, the city would buy the Upper Castaways or the Newporter North, or both. The two pieces of property are part of 11 parcels scattered around the city that the Irvine Co. wants to develop as residential and commercial and office space beginning in 1992.

The city would purchase 30 acres of the Castaways for about $40 million, and 47 acres of the Newporter for about $50 million. Both are choice properties fronting Upper Newport Bay. The 11 parcels are the company’s last major holdings set aside for development in Newport Beach.

“If people in this town are really interested in acquiring these properties, let’s go for it,” Plummer said. “I think there has been an interest in acquiring these properties, and this is the time to do it.”

The comments came during the presentation of an agreement that the Irvine Co. and the city had been working on for the past two years that would allow the firm to develop its land in exchange for a cash loan to the city to be used for road and street improvements in the area.

Under that agreement, the company would build on 106 acres, dedicating the rest to the city as open space. The developments would include nearly 1,000 residential units, 94,000 square feet of office space, a restaurant, health club and a 68-room hotel.

In return, the company would loan the city $20.6 million to be used as seed money to attract grant funds for road improvements needed in the area.

Plummer’s idea to buy the land outright and keep it as open space got a mixed reception.

Councilman John Hedges questioned the council’s role in suggesting the purchase and recommended that a citizens’ initiative would be a more appropriate way to put the land in the hands of the residents.

“If there is that much public support, perhaps a citizens’ initiative could . . . put it on the ballot,” Hedges said. “Perhaps it’s premature for the city to put it on the ballot.”