Some Frown as City Puts On New Face : Redevelopment: Changes continue in the downtown Huntington Beach area despite economic problems and opposition from critics.

HUNTINGTON BEACH — These are nervous times for downtown redevelopment:

* Three weeks ago the Waterfront Hilton at Huntington Beach, a redevelopment centerpiece, announced that it was seeking protection from bankruptcy.

* In recent weeks, new Councilman David Sullivan has sharply questioned the financial soundness of some early redevelopment decisions.

* The recession has slowed much of the scheduled development, including three proposed hotels slated to be built near the Waterfront Hilton on Pacific Coast Highway.

Despite the problems, construction proceeds on the new face of the city’s downtown. Two new major buildings near Main Street and Pacific Coast Highway will be completed this year. Many in the city applaud the continuing new look.

“I think redevelopment has been excellent for Huntington Beach,” Councilman Jim Silva said. “A few years ago families in this city wouldn’t go downtown because it was a rough area. Now we’re getting mom, dad, grandparents and the kids.”

By contrast, new Planning Commissioner Debbie Cook assails redevelopment as being “the ruination of downtown. . . . It’s been one big Ponzi scheme.”

A political change has produced much of the new criticism about downtown redevelopment. Last fall the city elected a slow-growth majority, including Sullivan, to the City Council. The new council members, in turn, have appointed slow-growth advocates, including Cook, to the city Planning Commission. Thus, critics of redevelopment--once on the outside--now have power positions inside City Hall.

The weak economy also is battering redevelopment in the city. The Waterfront Hilton, a 300-room high-rise, opened in 1990, just as the recession started its grip on Southern California. City and hotel officials say the Waterfront consequently ran into a construction loan refinance problem caused by decreased values of a lot of Southern California property. The hotel is not in danger of closing, despite its move to seek bankruptcy protection, officials said.

“The hotel is here to stay, and it’ll be in business for generations to come,” said Stephen Bone, president of the Waterfront Hilton, in an interview. Bone added that he and his partner, the Robert Mayer Corp., still intend to build three additional hotels next to the Waterfront Hilton.

“Those plans remain viable,” Bone said. But he acknowledged that the new hotels will now take longer to be built.

Deputy City Administrator Barbara Kaiser, in a separate interview, estimated that the second hotel would not be built for three to five years. The two other proposed hotels may not get underway for as long as 10 years, she said. The delays are directly attributable to the recession, she added.

Despite the recession, though, downtown redevelopment is doing amazingly well, Kaiser said. “There have been (business) leases for every new building even before the buildings are completed,” she said. “The leases include many national outlets, such as Baskin Robbins, that have never before sought to be in downtown Huntington Beach.”

Silva and other City Hall supporters of redevelopment note that the old downtown had a high crime rate. Police records show that drug dealers and juvenile prostitution rings operated in the early 1980s from some of the old buildings.

City government’s move in the late 1980s to clean up and renovate downtown brought widespread public support. A Times Orange County Poll of Huntington Beach residents in January, 1991, found that 63% favored downtown redevelopment and only 30% opposed, with the remainder undecided.

Those who oppose downtown redevelopment include surfers who liked the old, laid-back feel of the city. History buffs and preservationists also have deplored the loss of many of the old buildings.

One block of old buildings on Main Street has been largely preserved. The store owners chose to renovate rather than to raze. The result, according to city preservationists, is the most charming block of the “new downtown.” Planning Commissioner Cook asserts that the entire downtown should have been similarly renovated. She said she rues the loss of older buildings that have been replaced by pastel-colored new ones, many of which she scorns.

In counterpoint, supporters of redevelopment say many of the older buildings were beyond saving and could not have been made earthquake-safe. They note that one old landmark building, Jack’s Surf Boards on the corner of Pacific Coast Highway and Main Street, had walls that were literally falling apart before it was razed. The replacement building now going up to house the surfboard shop is a four-story high-rise, scheduled to be completed this summer. It also will contain several restaurants. The new building will be opposite an existing high-rise, the new Pierside Pavilion.

Criticism of the new buildings ranges from aesthetics to finances.

One critic, Sullivan, questioned redevelopment policies when he was president of a citizens’ group, Huntington Beach Tomorrow. Now, thanks to his upset election to the City Council last November, he is raising those questions inside city government.

Recently he fired off a flurry of inquiries to the city’s Redevelopment Agency. “My purpose in asking the questions was to have the City Council be more discerning about future redevelopment projects,” Sullivan said. “Some of the existing projects have not lived up to their rosy projections.”

But Kaiser, who heads the redevelopment staff, said none of the existing redevelopment projects are financial drains on the city treasury. Property values--and thus taxes coming to the city--have risen across the board, she said. And despite the recession, she added, virtually all downtown businesses are doing financially well.

Even the Waterfront Hilton is doing excellent business, she noted, and has occupancy rates this year exceeding 75%. Bone, the hotel’s president, said the financial dilemma revolved around refinancing the Waterfront’s $57.7-million construction loan, not day-to-day operation.

“Huntington Beach is a big attraction to visitors, and our hotel occupancy rates show it,” he said.

Supporters of downtown redevelopment claim that much of the visitor draw is because Huntington Beach now has a more appealing downtown.

Critics, however, say the redevelopment came with too few hard questions or searches for alternatives.

“My hope is that in the future the city will take a harder look at these redevelopment proposals,” Sullivan said.

Surf City’s Changing Downtown

Multimillion-dollar redevelopment is producing a new look in downtown Huntington Beach. Two high-rises, the Oceanview Promenade and Pierside Pavilion anchor the corner of Main Street and Pacific Coast Highway. Other new buildings are also scheduled in the downtown area.

1. Oceanview Promenade: four-story retail building

Completion date: July

2. Commercial building: restaurant/retail space, two stories

Completion date: December

3. Hotel Row: Existing Waterfront Hilton at Huntington Beach plus three proposed hotels, tennis/health center, retail space.

Start date: Pending financing

4. Pierside Pavilion: six-screen movie theater, restaurant/retail space, condominiums

Completed: July, 1990

Source: city of Huntington Beach