Housing proposed to replace Dove Canyon Plaza in Rancho Santa Margarita

The buildings in the Dove Canyon Plaza are half-empty or empty. The businesses that are still there are thinking of leaving.

Now, William Lyon Homes is proposing to build housing at the 8-acre site, which is by the entrance of the gated Dove Canyon community in Rancho Santa Margarita.

Hundreds of residents and business owners attended a recent City Council meeting to protest the proposal, though nothing has been submitted yet to the city.

Raintree Investment Corporation bought the center in 2016 for nearly $21 million, according to property records. A plan to build housing was floated at the time, but things had been quiet on the idea until early this month when William Lyon Homes held open houses showing initial concepts for housing.

The company is proposing options such as 174 senior luxury condos or 135 townhomes, according to its website. 

“William Lyon Homes is still meeting with the neighbors to determine what plan would fit best with the community,” the company said in a statement. “We’ll be conducting additional outreach before a proposal and an application is submitted to the city.”

Residents expressed concern the housing would add too much traffic in an area that can already be gridlocked at the start and end of school days at nearby Santa Margarita Catholic High School.

“It takes 10 minutes to go 100 yards already,” a nearby resident, Brandon Johnston, said.

Residents also brought up concerns about parking impacts, evacuation in an emergency and a loss of revenue to the city from housing versus businesses.

The developers say residential development would reduce traffic and make better use of the property.

“Like many commercial centers, Dove Canyon Plaza has struggled to get new tenants and keep existing tenants as better-located retail centers have opened and online businesses have become more popular,” Raintree Investment officials said in a statement. “Over the last few years, five businesses have left Dove Canyon Plaza prior to the expiration of their lease.”

The shopping center has potential, remaining business owners said, if it were marketed and filled with the right mix of businesses that attract people, such as restaurants. They point to the center’s proximity to Santa Margarita Catholic High School and the Dove Canyon and Coto de Caza communities.

“They are trying to put out a false narrative,” Kenney Hrabik said of the owner and the developer. He owns a wedding and special events facility, Dove Canyon Courtyard.

Hrabik and other business owners said in recent years they have been given shorter leases that can be terminated with little or no notice.

That affects whether they want to renovate their businesses, Hrabik said. “How can you lay out capital investments not knowing whether you’ll get your money back?”

Raintree Investment officials said in their statement that some tenants “have received rent reductions in order to keep them as a business in the center, often with longer lease terms.  The longest lease is until early 2021, and all leases will be honored.”

“Meanwhile, the property owner is taking the time to work with the community to explore other options for the property that fit with the community and make economic sense.”

City officials said decisions on the plaza’s future are a ways off. Even once an official project application is submitted, it can take up to 18 months to reach the point of the council considering approval.