Economy an uncertain factor in Koll vote

June Casagrande

NEWPORT BEACH -- Business is bad. But warring parties on both sides of

the Koll Center expansion debate think this could be good for them in

the upcoming special election.

When voters go to the polls Nov. 20, they’ll cast ballots for or

against Measure G in a very different economic climate than was

envisioned when the Koll project got its start in the late 1990s.

While the expansion of the Koll Center office complex near John Wayne

Airport is the official ballot question, there are larger issues on the

ballot: growth versus continuity, business versus community. And as this,

the first test of the city’s slow-growth Greenlight Initiative,

approaches, so too does a feeling of economic uncertainty that started

with dot-com deaths more than a year ago and has been weighing heavily on

business and consumers ever since.

How this bodes for the Koll Center expansion depends on who’s talking.

“It’s a pro-business issue,” said Tim Strader, president of Koll

Center developer Starpointe Ventures, of the looming vote. “That’s why

when we get our message out people will vote ‘yes.’ Newport Beach

residents understand business.”

Strader predicts that business cycles may take their next upturn in

about two years, roughly the time the Koll expansion could be complete.

If he’s right, the center will be opening its doors to new business

tenants just in time to meet demand.

Opponents of the project take a different view.

“I think the economy is another nail in the coffin of the Koll

project,” said Phil Arst, an activist leading the opposition to the

project. “Occupancy rates are down. It’s a bad time.”

Arst points out that commercial developments such as the Koll Center

are of questionable economic benefit to the city. Unlike the more highly

taxed retail and hospitality sectors, office space brings only property

taxes.

Strader points out that the Koll Center would bring an estimated

$28,000 a year in property taxes to the city. But Arst counters that this

is a small amount made even smaller when offset by services the city must

provide.

In City Manager Homer Bludau’s assessment, the answer is somewhere in

between the two men’s opinions.

“It isn’t a big revenue source to the city, but we certainly wouldn’t

lose money for this project,” Bludau said.

While any new business brings jobs and a general economic boost, it

can also bring traffic and crowding. Ultimately, it will be the voters

who decide how these competing concerns should be balanced out.

The Koll Center issue is the first incarnation of the Greenlight

Initiative, which was approved by voters last year. The initiative

requires that all projects large enough to require an amendment to the

city’s general plan be put to a vote.

Measure G will decide whether the project at Koll Center can move

forward. Plans call for a 250,000-square-foot expansion of the Koll

Center’s southern tip, near the intersection of Jamboree Road and

MacArthur Boulevard. It includes a 10-story office tower and two parking

structures.

Whether this plan is palatable to Newport Beach voters and how they

will factor the current economic climate into their voting decisions next

month is anybody’s guess.

“I think it is a big unknown,” Bludau said. “I don’t think anyone --

economist or otherwise -- has a handle on how long the economy is going

to be in a downturn and how bad thedownturn is going to be. And who knows

what the feeling is going to be like in another month?”

-- June Casagrande covers Newport Beach. She may be reached at (949)

574-4232 or by e-mail at o7 [email protected] .

QUESTION

Pocketbook vote

How will the current economic slowdown affect your decision on the

Koll Center expansion? Call our Readers Hotline at (949) 642-6086 or send

e-mail to o7 [email protected] . Please spell your name and

include your hometown and phone number, for verification purposes only.