Newport officials rethink annexation plans

June Casagrande

NEWPORT BEACH -- Once practically a foregone conclusion, annexation of

east Santa Ana Heights and Bay Knolls is now an issue City Council

members want to reconsider.

East Santa Ana Heights and Bay Knolls were originally clumped in with

Newport Coast on one annexation application to the county. The

applications, though, were separated last year, allowing the city to

annex Newport Coast individually. The upscale area is guaranteed to have

a long-term financial benefit to the city.

Santa Ana Heights and Bay Knolls, both money losers for the city, are

now part of a separate application -- an application whose bottom line is

no longer buffered by Newport Coast dollars.

During a City Council study session Tuesday, resident outcry on

details of the annexation prompted council members to reconsider

annexation altogether.

“If people don’t want to be part of Newport Beach, why should we push

it?” Councilwoman Norma Glover asked. “Especially when we’re going to be

asking our residents to subsidize the annexation for 35 years.”

Property taxes in Santa Ana Heights are bound to a redevelopment

agency agreement that automatically uses all increases in property taxes

there to pay back the agency’s investment in the area until 2035.

Tax revenues the city would get from annexing the area are fixed until

2035 at about $110,000 a year. That amounts to about “a policeman and a

quarter,” as Assistant City Manager Dave Kiff measured it --

substantially less than what it will cost the city to provide police,

fire, trash and other services to the area.

East Santa Ana Heights is near the northern end of the Back Bay and

has a population of about 1,000; Bay Knolls has more than 400 residents.

Both areas have been designated by Orange County’s Local Agency Formation

Commission as being within Newport Beach’s “sphere of influence” --

meaning they should one day become part of the city. Council members have

supported annexation in part because of Santa Ana Heights’ strategic

value in preventing expansion of John Wayne Airport.

Officials have argued that annexing Santa Ana Heights, which is near

John Wayne Airport, could help prevent airport expansion. Glover

suggested that if Costa Mesa wanted to annex the areas along with other

sites that city is now applying to annex, John Wayne expansion might be

thwarted just as effectively.

“If we’re going to look at annexation, I would like to look as closely

as possible to the airport issues here,” Councilman Steve Bromberg said.

Residents of Santa Ana Heights who spoke at the council study session

were mainly concerned with plans to build a community center and fire

station in the area. One city proposal to put the two facilities on the

same site would cut into the proposed community center’s parking and

other facilities.

City Manager Homer Bludau pointed out, however, that outcry about the

fire station issue doesn’t necessarily mean the residents oppose

annexation.

“Until today, most of what we’ve heard from Santa Ana Heights has been

very positive,” Bludau said.

Council members will likely consider the issue at an upcoming meeting.

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

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

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