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City to Vote on Rezoning Nissan Site

Theory R Properties will have to convince City Council to change the vision of the master plan and that it's in the best interest to have a retail center on the site now.

The Rancho Canyon site, formerly Family Nissan, in Rancho Santa Margarita. Credit/Martin Henderson
The Rancho Canyon site, formerly Family Nissan, in Rancho Santa Margarita. Credit/Martin Henderson

By Martin Henderson

Is it do or die time for Theory R Properties? The owner of the former Family Nissan auto dealership site in Rancho Santa Margarita will go before the City Council Wednesday night hoping to convince at least three of the five members that it is in the City's best interest to rezone the 4.75-acre property to allow a retail center—anchored by 24 Hour Fitness—to go onto the land. 


Theory R, which has called the renamed Rancho Canyon property "the gateway to Rancho Santa Margarita," failed to convince more than one planning commissioner three weeks ago during a similar presentation. That commissioner, Peter Whittingham, called the site "an eyesore." 

Yet the battle Theory R is fighting is the eyesore that could appear on the City's bottom line when comparing the sales tax revenue a retail center would provide compared to that of an auto dealer. 

City staff has recommended against rezoning the property from Auto Center Zone/Auto Center Overlay to Commercial-General. 

Joe Daichendt, principal of Theory R, figures a retail center that includes the fitness center, carwash and a few eateries or coffee houses could bring in $60,000 annually to the City through sales tax. The City receives 1 percent of the sales tax generated within its boundaries. However, it would take a decade for such a center to provide the City with the revenue a dealership could provide in one year.

In other words, the site—as part of the Auto Center Zone—could sit empty for 10 years, and the first year a dealership is on the site could make up the difference of 10 years of revenue generated by the proposed retail site.
 
Another obstacle facing Theory R is that Rancho Canyon is next door to RSM Honda, Orange County's most successful Honda dealership. 


General manager and partner Bob Carmendy three weeks ago estimated RSM Honda would do about $70 million in sales in 2013 that would provide $700,000 to the City in sales tax. He told the planning commission during public comments he expects sales of $75-$80 million in 2014.

Carmendy has made an offer to Theory R Properties to purchase the site, which Theory R purchased in 2012 for $4 million. 

The City's market expert, The London Group, recommended that the City allow the economic recovery to play out because of the disparity in revenue between what a retail center brings to the City compared to an auto dealership.

Theory R's team will show that even though there are more car sales in the U.S., the trend has steadily been toward fewer car dealerships. 

Theory R's contention is there are no dealers willing to lease the site and is therefore unusable as a dealership, which necessitates the need for a rezoning that includes retail.

Daichendt also conceded to planning commissioners Theory R originally purchased the property without having any background in the auto industry and with the intention of having it rezoned for a retail center; he also said having a dealership on the site would be his first choice.

TELL US IN THE COMMENTS: Should the City hold out for an auto dealer, as the land was zoned for, or change the zoning to allow the property owner to put a handful of businesses on the site? 
Lawrence (Larry) McCook January 08, 2014 at 12:43 PM
The Master Plan has been modified in the past for various projects. Don't misunderstand, I only met the people from Theory R (the owners for about 2 years) and Bob Carmendy (GM for RSM Honda) the night of the Planning Commission Meeting and Vote. IMO, the Go For Business Development or THe Kill The Business Development Decision had been made before this discussion began. Planning Commissioners are each appointed to office by a city council member. IMO, They are placed their to be a puppet voice of their appoint er. It is my understanding that Bob Carmendy offered to buy the property from Theory R for $4 million dollars. This is far less than Theory R has invested in this derelict property now vacant for about 6 years. Since purchasing the property, I understand Theory R has spent in the neighborhood of $800,000.00 in addition to their purchase price for repairs and clean up. The property had been wrecked by the prior tenants. I have no axe to grind with Bob Carmendy, as I have also just met him, but I understand he is very friendly with some of our RSM city council members and has supported their political campaigns. IMO, there are no immediate or future suitors for this property. Though the auto industries have better sales now, there is no trend to open new locations. If one would step up with the fair price for this property, I feel sure that Theory R would be more than glad to take their RSM Investment back and leave this , IMO, Unfriendly and Unprofessional To Business City. RSM has failed for years in amateurish business development efforts costing a loss of around $600,000.00 of Taxpayer Money (6/10 of a Million Dollars)! Come tonight and see for yourself!
Lawrence (Larry) McCook January 08, 2014 at 12:50 PM
I might add, Martin has posted a nice photo of the old abandoned Nissan Dealership but, it doesn't paint a clear picture. LOL You can see little or none of this building from your car. The location, location, location with easy public view is non existent!
Shawn Gordon January 09, 2014 at 02:07 AM
What are you driving in Larry? You can see the property fine, but after your bizarre meandering rant at the city council tonight, I question anything that you have to say. What came out at the meeting was there are 2 suitors for the site. Theory R got the property for $6 million under property value at the time and their original intent was to rezone it despite what they'd been told, they tried to rezone it before they'd even looked for a dealership, that all came out tonight as well. And there has been no business development in years here, the board was disbanded by Steve and Jesse.
Celeste Caban January 09, 2014 at 10:13 AM
Why don't they let us vote? In my humble opinion, rather than wait around and be greedy for tax dollars, let's enrich the lifestyle of those of us who live here. Aren't we already in the best financial position of all cities in our country? Not to mention we already have plenty of dealerships and it's an eye sore. So let's use the property for things that can increase the joy of life for the hard workers living here in RSM. That's what makes us proud to live here.
Lawrence (Larry) McCook January 09, 2014 at 12:04 PM
A vote is a great idea and would cost only a pittance if tagged to the November 2014 Election! Let The People decide not just 3 people!

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