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Property Owner, City Leaders Clash Over New Retail Proposal for “Plaza Banderas” Site

Gretchen Stroscher Thomson owns property in downtown San Juan Capistrano.  Her family is one of the ranch owning families on which much of San Juan Capistrano was built.  In fact, the famous Walnut Grove restaurant was on her family’s land, as were the actual walnut groves for which the legendary San Juan restaurant was named.  Thomson is also the name behind the heroic attempt to bring a luxury 124-room boutique hotel to downtown San Juan — the Plaza Banderas Hotel, imagined below:

We were big fans of the Plaza Banderas project.  A luxury boutique hotel with high-end retail space in an underutilized corner of downtown San Juan Capistrano seemed like exactly what the City needed.  Unfortunately, it will not come to pass.  In spite of obtaining the necessary approvals for the mixed hotel/retail project, for various reasons, the development was determined to be not financially viable and has been abandoned.  Rumor has it that Thomson could not find a partner who thought the hotel concept could work.  Thomson regrouped and is now proposing a retail shopping center on the site.  The proposed retail complex is described in the Dispatch as follows:

Dana Point-based developer Goveia Commercial Real Estate wants to build a 41,000-square-foot shopping center, called The Shops at Capistrano, on a 3.54-acre site, located on the northeast corner of Ortega Highway and El Camino Real. The project includes three single-story buildings, one 12,000-square-foot space for a grocery store and 194 parking spaces. A portion of the current property is currently leased to the city on a monthly basis as public parking.

There is also an article at the OC Register describing the retail proposal here.

The project site currently falls within the boundaries of the San Juan Capistrano Historic Town Center Master Plan, which strictly regulates any development that occurs within the historic downtown.  Naturally, the City is going to look very critically at any land developer who wants to build within the Historic Town Center Master Plan.  Even her opponents have to agree that Thomson is not your typical land developer.  Her family has roots in San Juan Capistrano that extend back to 1887!  In fact, according to Thomson, “[her grandmother, Frederica Stroschein] was a good friend of Fr. St. John O’Sullivan. When Fr. O’Sullivan needed a wagon to haul materials for the restoration of the Mission, Frederica loaned him her wagon and team of horses.”

Thomson needs a zoning change to her parcel in order to pursue her new proposed development.  Currently zoned as general commercial, a retail market of the size and structure that Thomson is proposing would not be permitted.  A zone change and a site-specific plan are required.  Removing the property from Historic Town Center Master Plan would also expedite development.  Thomson and her development partners are pursuing the necessary changes, but she faces opposition within the City.

To further her case, Thomson has written a guest column in the Capistrano Dispatch describing her family’s history and commitment to San Juan Capistrano, and explaining her vision for the retail complex on the former Plaza Banderas site, consistent with the Historic Town Center Master Plan.  She writes:

The Master Plan calls for an expansion of the commercial core of our city as the key to revitalizing downtown. Our retail shops, anchored by a specialty boutique market, will bring new shoppers downtown. With parking provided for them, those shoppers will stop and visit other stores. Visitors to the Mission will have other options for lingering in San Juan—a walk over to our plaza on the corner, looking at the offerings of the shops on the corner, discovering more shops on the interior, beyond the plaza.

We still believe Plaza Banderas would have been a great addition to downtown, but that’s water under the bridge.  It isn’t going to happen.  Hopefully, the hotel project located near Historic Town Center Park will fill that void. Today, a retail plaza seems like the most viable option, and Thomson has partnered with a developer with a track record of executing high end retail shopping center developments.  Most importantly for residents of San Juan, both the landowner and the developer have local ties and claim to be committed to designing and executing something that is consistent with the historic character of downtown San Juan Capistrano.

Not everyone agrees with Thomson’s vision, nor her assertion that it would fit with the historic character of downtown San Juan.  Former San Juan Capistrano City Councilman Mark Nielsen opposes Thomson’s proposed retail plaza.  He has also voiced his opinion in the Capistrano Dispatch, here.  He writes:

 Unfortunately, though the hotel was approved, it is now being replaced with a new developer that is proposing a four-building, 41,000-square-foot retail project that will have almost 200 parking spaces spread out across the property and a plan to use Spring Street for semi-trucks to deliver to the retailers, where children are daily dropped off and picked up at San Juan Elementary—basically, a typical strip mall that is built around vehicles, not pedestrians.

Egads, a strip mall?  That sounds very different than the retail plaza that Thomson has described!  Again, read both articles.  They both raise valid points (and both engage in some strategic rhetoric).  Nielson claims that “[a]dding a strip mall at the edge [of town] will only encourage more traffic, be an island for shoppers to drive in and out and discourage shoppers from leaving their cars and walking through the town center.”  Whereas Thomson says that she and the developer are committed to “creating retail plazas with superior architectural stature that are designed to encourage walking, gathering and shopping at several stores in a single visit.”

Who to believe?

The fact that whatever is ultimately built on the site will stand at the gateway to downtown San Juan Capistrano for visitors exiting the revamped Ortega Highway interchange is one reason that this property is so aesthetically important.  The fact that it is adjacent to the national landmark Mission is another.  And count the Executive Director of Mission San Juan Capistrano among those opposed to the “strip mall” being proposed.  From the Dispatch:

Mechelle Lawrence Adams, the Mission’s executive director, called the shopping center a “strip mall” and asked council members to “just say no from the beginning.”

No one disputes the importance of developing land adjacent to San Juan’s beloved Mission.  Even Thomson understands that her property is in a significant location, and that development in San Juan is a uniquely challenging process.  I thought this statement from Thomson was insightful:

Building in Capistrano is not easy, and in many ways, it shouldn’t be.

I’m willing to give Gretchen Stroscher Thomson the benefit of the doubt as she clearly understands what makes San Juan Capistrano unique.  At the same time, we can’t fault her for pursuing a financially viable project on her property.  She tried — for nearly five years! — to get the Plaza Banderas Hotel built.  But the concerns articulated by Adams and Nielson are equally valid.  San Juan Capistrano made a terrible mistake when it allowed fast food restaurants to take over the entrance to town along Del Obispo.  There are real questions about whether downtown San Juan can absorb more retail and local traffic without bringing new visitors to town.  Other large retail centers in town are struggling with vacancies.  While a hotel would bring new visitors to town and increase the bed tax receipts for the city, more retail potentially pushes the city closer to (or beyond) the saturation point at which the city is unable to absorb it.  The proposal needs to be economically viable not just for Thomson, but also for San Juan’s retail ecosystem as a whole.

Maybe they should propose bringing back the Walnut Grove restaurant?

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