Revised Plan for Mixed-Use Self-Storage Facility Approved by Costa Mesa, CA, Council

Update 7/20/17 – The mixed-use self-storage project approved for Cardinal Development and Sanderson could be in jeopardy now that Costa Mesa’s voter-approved growth initiative, Measure Y, has gone into effect. Sanderson filed a lawsuit on July 11 in Orange County Superior Court arguing the self-storage project should be grandfathered under previous requirements because it was passed by the city council before voters approved Measure Y on Nov. 8, according to the source.

Because the Bristol Street project required rezoning and includes more than 10,000 square feet of additional commercial space, it falls within the new parameters for public approval established by Measure Y, the source reported. The legal question for the city and developers is whether the council’s earlier decision takes precedent over the new growth control.

In its lawsuit, Sanderson maintains Measure Y didn’t take effect until Dec. 23, after the city council certified vote totals, which was after the developers received final approvals for the self-storage project. Wording in the measure, however, indicates the new initiative should take precedent “on or after the date of publication of the notice of intention to circulate the initiative petition,” which was July 17, 2015, according to a city report.

Sanderson worked with the city for more than a year and spent in excess of $700,000 to obtain necessary approvals, according to the lawsuit, which indicates the project is stalled due to “the legal uncertainty.”

The self-storage project appears to be the only development affected by the retroactive clause in the measure, city spokesperson Tony Dodero told the source.

11/3/16 – A scaled-down version of the mixed-use self-storage project proposed by Cardinal Development and Sanderson was unanimously approved by the Costa Mesa City Council on Tuesday. With a 5-0 vote, the city approved a revised plan that will develop a 719-unit storage facility and retain 12,500 square-feet of existing retail at the Autoplex, according to the source.

As part of the approval, the developers agreed to work toward installing underground utility poles in front of the property. “We think this project, when compared with what’s there, will not only be a lot better looking, [but] more vibrant, quiet and cleaner,” Freeman told the source. “We think it’s a great outcome for a sight that presents a lot of unique challenges.”

Three business owners spoke in favor of the revised plan during the meeting. George Bean, owner of Sandwich World, indicated Autoplex tenants were encouraged by the new plan after meeting with the developers following the original project’s denial by the planning commission in June. “We had a healthy back and forth,” he said. “I think they were very fair.”

6/14/16 – Some of the Autoplex businesses that would be forced to relocate if the self-storage project proposed by Cardinal Development and Sanderson is approved are fighting the plan. Several owners met recently to discuss how they could convince Costa Mesa officials to reject the proposal.

Merchants submitted a report to the planning commission arguing the self-storage facility and food court don’t make economic sense, as the Autoplex currently generates more than 60 jobs and about $350,000 in annual tax revenue, the source reported. The planning commission was scheduled to hold a public hearing on Monday.

"It's pretty frustrating to think that we might shut down forever, but we're going to keep on fighting," Olivia Bean, general manager for Sandwich World, told the source. "I know a lot of my customers have been sending e-mails to the planning commission for them to reject the project, and hopefully, they'll succeed."

Multiple business owners told the source they are having difficulty finding suitable locations in Costa Mesa and may be forced to move to nearby municipalities if they want to continue operating. "It's been a good six or seven months of sleepless nights for me trying to figure out what to do," said Dan Krogh, owner of Dan’s Autocare Express, who has operated in the center for about 20 years.

Autoplex tenants were notified of the mixed-use development plan in August. If approved, the project likely wouldn’t break ground until October 2017, giving businesses more than two years to make plans, according to Paul Freeman, a spokesperson for the project. "I feel for anybody that is uprooted in their business or where they live," Freeman told the source. "There are few things in life that are more disruptive."

Although merchants called the project a “short-sighted blunder” in their report to city planners, Freeman believes the facility will meet local demand. “We’re not developing storage or the food hall to lose money,” he told the source. “We think it will be highly successful.”

6/6/16 – A joint venture between Cardinal Development Co. and Sanderson J. Ray Development has proposed to build a mixed-use complex in Costa Mesa, Calif., that would include self-storage and a freestanding food court. The two-story facility would replace the Autoplex strip mall at 375 Bristol St., comprising 98,800 square feet of storage space in 744 units, a 1,200-square-foot management office, and a 5,000-square-foot food court with multiple vendors, according to the source.

The Costa Mesa Planning Commission is expected to discuss the project during a June 13 public hearing.

The Autoplex mall comprises 37,883 square feet on 3.2 acres but is experiencing leasing problems, the source reported. "The existing mall has struggled for years to maintain tenants as the need for small, independent auto-repair businesses has declined dramatically," the developers argued in their application to the city. "In short, the future of the Autoplex mall appears dim."

Cardinal Development lists the same Bristol Street address as the Autoplex mall for its corporate headquarters. It owns the trademarks for Autoplex and Extra Storage, according to its website.

The developers believe local demand for self-storage will increase due to residential development in the area. "Recent market research shows sufficient demand for self-storage within the surrounding community in light of current multi-family development under construction as well as in the planning stages," according to the application.

The property is also near John Wayne Airport and the Newport Beach Golf Course.

Founded in 1986, Cardinal Development is a privately held asset-management, brokerage and development firm. Recent development projects include Extra Storage self-storage facilities in Costa Mesa and Valencia, Calif., according to its website. The firm identifies six Extra Storage properties on a list of its owned and managed projects.

Sanderson J. Ray Development is a real estate investment company, according to the firm’s LinkedIn page.