Project Location: Capistrano Beach

The District owns 30 acres of property adjacent to San Juan Creek off Stonehill Drive in the City of Dana Point, approximately ½ mile from the Pacific Ocean.

Project Goals

The District established the objectives for the property in 2006 by Board resolution:

• The property “shall be retained in ownership for the benefit of the current and future customers . . . in meeting local water and sanitary sewer needs.”
• Any residual property could be developed to “maximize revenue” for the benefit of customer rate stabilization and capital cost contribution, “minimize risk to the District, and maintain flexibility” for long-term District needs.

Project Background

The District acquired the property in 1999 when it consolidated with the Capistrano Beach Water District. Since that time, the District has improved the site by building an access road to Stonehill Drive, constructing a Groundwater Recovery Facility,  replacing a sewer lift station, and leasing space to small businesses for storage of their equipment, supplies and vehicles. The District currently produces 10% of it water supply at the Groundwater Recovery Facility, serves Capistrano Beach through the upgraded sewer lift station, and generates up to $600,000 per year in revenues from lease payments, which help cover water and sewer costs.

Project Description

Development of the District's San Juan Creek Property aims to increase revenues through lease payments, provide a central location in the service area for a consolidated District Operations Center and provide space for the proposed South Orange Coastal Ocean Desalination facility.

• Additional Revenues:  The District has conducted numerous studies of the property for non-public, revenue-producing uses, including geologic and engineering evaluations, and a Programmatic Environmental Impact Report. The District also completed a feasibility study of the “highest and best” non-public uses of the property. As a result, the Board had identified Boat/RV storage and marine services as the most “compatible” use for approximately nine acres of the property. In 2008, following an RFQ/RFP process, the Board selected a local architect/developer team as a potential development partner. While the proposed project met expectations for feasibility, need and excellent projected revenues, the District was unable to finalize a ground lease with the developer. This was largely due to the stall in new construction lending during the economic downturn in 2009-2010. As a result, the District ended the period of exclusive negotiation with the developer but noted that the developer’s design concept met many of the District’s goals for the future use of the property.
• Potential Site of District Operations Center:  An area of approximately five acres has been reserved on the property to meet future operating needs in the events that funding sources are identified and the benefits of a consolidated operations facility justify its construction.
• Potential Site of the South Orange Coastal Ocean Desalination Facility:  The District has entered into an agreement with the Municipal Water District of Orange County to reserve five acres of the property as the site for a potential ocean desalination facility that could provide 25% of the water needed in our area of south Orange County.