Goodbye, Marblehead; Goodbye, Tax Dollars

A developer’s unexpected withdrawal of plans to build homes and a retail center on the majestic Marblehead coastal bluff has jeopardized a host of city projects in San Clemente, including a new senior center, a library expansion and improvements to the downtown area.

The city was relying on the Marblehead development to generate a hefty chunk of its future property tax revenue, roughly $2 million a year. But with the development now on hold, officials Tuesday were scrambling to adjust budgets and putting long-planned city projects on the back burner.

Over the next 15 years, “Marblehead [represents] 51% of our future tax growth revenue. It’s crucial to the future of our city,” said City Manager Michael W. Parness. “We won’t plan on doing these projects until we know the money is available.”

The action comes a day after the Lusk Co., which owns the 250-acre coastal parcel, temporarily pulled back the proposal after it became clear the California Coastal Commission would reject it.

The Irvine-based company proposed to build 412 homes, an outlet mall and retail center on the site. Company representatives have not said how they plan to modify the plan and did not return phone calls Tuesday.

Some environmentalists who have fought the Marblehead development said they are glad it stalled, even though the situation could bring financial problems to San Clemente.

“The city is bent on a bigger tax base, but . . . they have to leave the canyons and wetlands intact,” said activist George Hubner.

San Clemente has been in weakened financial health for the four years since the successful passage of a statewide initiative that severely limited the ability of some cities to continue property tax levies. The city tried to compensate by seeking a 2.5% utility tax hike, but voters rejected it.

In response, the city made drastic cuts, eliminating 55% of its city hall staff and slashing sports programs.

Officials had hoped that Marblehead would revitalize the city’s tax base. Now, they said, several short-term and long-term projects are in jeopardy, including:

* Construction of a new fire station.

* Hiring of four firefighters.

* Sand replenishment to combat beach erosion.

* A variety of street improvements and tree plantings.

In addition, the Lusk Co. planned to finance a senior center and help create plans for urban runoff improvements and downtown redevelopment if the Marblehead project was built.

The Coastal Commission on Monday gave the project a decidedly cool reception.

“It seems to me it is an issue of lack of respect for the land,” said Commissioner Patricia McCoy. Coastal land is “disappearing inch by inch, day by day. It’s cumulative. It’s the very fabric that keeps us all alive.”

Commissioner Christina Desser added: “The coast of California does not exist to be a profit center or tax revenue base for the cities who happen to be there.”

Still, Mayor Scott Diehl said he believes that the developer is trying to be environmentally sensitive and that Marblehead will eventually be approved.

“None of the commissioners said there will be no development on that parcel,” Diehl said.