“N

ewport is basically Beverly Hills on the beach. A place built on money, power and prestige.” That’s how the website of Fox’s new show “The OC” describes our area and the home turf of their prime time soap opera series. In the show, we see coastal Orange County through the eyes of an outsider, Ryan, a reluctant car thief with solid morals from Chino, whose equally moralistic defense attorney Sandy shelters him in his Newport Coast manse’s guest house. Ryan wakes to a multi-million dollar view and proceeds to discover a place where the high school kids drive beemers and monster SUVs to fashion shows in which they gladly participate to raise money for charity, and the parents have occupations like financial investor, attorney, and my personal favorite, model home builder for what are obviously Newport Coast communities. The creators – one of whom, McG, grew up here – are careful to give the characters a modicum of depth; they’re all not the shallow cads most were expecting. But it can’t be disputed that the OC coast comes off as one big Mediterranean-styled resort filled with beautiful people living in new mansions, wearing designer clothes and driving flashy cars. It’s a place where the sun always shines, cell phones are a necessary accessory and shopping is a respected pastime.

Many people I know have cried foul, that our town is not all monied-up, that the country will get the wrong impression of us.

The thing is, they’re wrong; the show has us pretty much pegged. We’re a spot that in the past few decades has gone from BBQs on the beach to toddies on the terrace, and more times than not those terraces embrace Mediterranean architecture. And new resort/spas like Laguna Beach’s Montage, Monarch Beach’s St. Regis, Huntington Beach’s Hyatt Regency and the soon-to-be developed Pelican Hill Inn, have inspired state tourism officials to market us as the “new Riviera.” Consider the fact that the nation’s average home price is just over $200,000; the average Newport Beach home price is over $1 million. Like it or not, we are not a beach town any longer, we are a cosmopolitan destination that turns the rest of the country money-green with envy.

It’s not a crime. It’s just a matter of perspective. If you’re rich enough to call your home a villa, your terrace a loggia and stock a private wine cellar, you call the last decade a Renaissance of fine dining, high culture and upscale shopping. If you’re still working a paycheck, you call it an invasion of skin-toned stucco, and wax nostalgic for the days when you could get parking at the beach and afford to eat out. But come on, who wouldn’t take the big house with the entertainment center? Or even the guest house, for that matter?

Selling The OC

It’s hard to deny that the engine driving our local economy in the last several years has been real estate. And the heart of the engine has been Newport Coast. When Newport Coast came to market in 1990, with it came an upscale masterplan that would influence the entire region. From then on, whether it was an Irvine Company-controlled Fashion Island addition, the CdM Albertson’s facelift or a single family leveling a Corona del Mar cottage and putting up a 4,000-square-foot home, most new construction took on a very Mediterranean flare.

A lot of grumbling went on, a lot of pining for the past was heard. Then a funny thing happened during the ’90s: a lot of people got rich on equity and shut up.

And in fact, most people would probably admit that an area that sees 342 days of sunshine a year and boasts an average temperature of 70 degrees is going to be developed. There is just no way around the bulldozer. So, as much as the word “masterplanned” reddens the faces of even the mellowest of long-term residents, if honest, they’d also admit that a masterplan is better than no plan at all. “With Newport Coast, The Irvine Company had enough land and drive to define a resort community,” says Mark Boud, principal and owner of Real Estate Economics, a Laguna Niguel-based real estate consulting firm. “They’ve been able to control everything from the pavement to the hotels and homes.” But The Irvine Company did have some help from a higher power. Nature. “Newport Coast has a distinct advantage because of elevation. It provides the opportunity for a majority of great ocean views,” says Boud. And The Irvine Company took full advantage of these factors, according to Boud. “[The Irvine Company] has done a great job, so it has become the primary area for upscale real estate along the coast.” He points out that Huntington Beach is flat, and, to the south of Newport, the projects are mostly in-fill.

Now, over a decade later, the last piece of the Newport Coast puzzle is being fitted into place: Crystal Cove. And it seems a fitting summation with some of the highest non-custom home prices in OC history. These production homes are priced from more than $1.5 million to over $3 million.

Of course, they are really nice production homes, probably better than 99% of the non-production homes in the country. There are four builders now selling the second of three phases (although, according to an Irvine Company spokesman, it remains to be decided whether the third phase will be custom lots or more production homes). The first phase of 263 homes is sold out, and of the 207 yet-to-be built in phase two, 51 have sold in just four weeks. In fact, the response has been so good that The Irvine Company and builders can afford to take a decidedly low-key approach to promoting the development. There are no big “Model Home” flags flying on PCH and while models are open 10 to six on the weekends, viewing is by appointment only during the week. It’s a long way from the early ’90s when a man in a seven-foot-tall pelican suit flagged down drivers to view model homes.

The homes, which will be higher on the hill than phase one and just below phase three, will include residences from 2,900 to 5,400 square feet. Nautilus, by Laing Luxury of John Laing Homes, will be one- and two-story detached homes 2,900 to 4,000 square feet with three to six bedrooms. Prices start in the mid-to-high $1 millions. The Strand, by Brookfield Homes, will feature two-story “paired and detached residences” from 3,400 to 4,100 square feet and three to five bedrooms. Prices also start in the mid-to-high $1 millions. Oceana, by Standard Pacific Homes, will consist of one- and two-story “courtyard-centered” detached homes from 3,500 to 4,300 square feet and two to five bedrooms. Prices here start in the $2 million range. Finally, White Sails, by Taylor Woodrow Homes, are described as “Santa Barbara-inspired estate residences” of 4,900 to 5,400 square feet with four to seven bedrooms. Prices start in the $2 millions.

Perhaps the reason these places can command such high prices was best explained in one of The Irvine Company’s own Crystal Cove marketing pieces, which read, “Lifestyles from the low $1 millions.” Because, really, no one who can put down cash for a multi-million dollar residence – and many do, often as a second home – is buying just a place to eat and sleep, no matter how nice the view. They’re buying a piece of the upscale destination resort community our area has turned into. They’ve got the money, and maybe the power, now they want the prestige.

Resorts within the resort

With any “Gold Coast” or “Riviera” moniker comes actual resorts. And here again, coastal OC has been busy. For a long time The Ritz-Carlton Laguna Niguel reigned supreme as the area’s, well, Ritz. In fact, the 2001 opening of the St. Regis Monarch Beach Resort and Spa ended a 10-year void of luxury hotel development. Since then, a lot of ribbons have been cut.

Of course, these plans didn’t happen overnight, but it was close. In the mid- to late-1990s, hotel developers realized that a potentially lucrative market was emerging: pricey day spas. With a state-of-the-art spa, luxury hotels would not be totally reliant on outside visitors and restaurant guests, but could tap into local pocketbooks whose owners craved pampering.

“The spa industry is a very young industry. It’s evolved over the last 10 to 15 years,” says L.K Eric Prevette, president of The Irvine Company Resort Properties. “But spas have become as important to destination resorts today as having a good restaurant or even a good guest room. It is part of the expectation.”

In fact, it’s now such a necessity that one of Laguna Beach’s most respected upscale hotels, the Surf & Sand Resort, recently built a $1.5 million day spa, Aquaterra, to compete. This was in addition to the millions in improvements spent in anticipation of the reported 50% increase in local luxury hotel rooms. But ultimately, what has kept the Surf & Sand in the game is their location. Because the resort was built when land on the sand in Laguna was still available; as General Manager Blaise Bartell likes to say, you can’t get closer to the ocean without getting wet. Even their award-winning restaurant Splashes is filled with the soundtrack of crashing surf.

Our new resort industry is also capitalizing on other relatively new trends, such as L.A. and San Francisco travelers choosing to drive instead of fly to their vacation spots, and a massive drop in the cost of financing these projects. The numbers finally looked right.

It’s why even with the thousands of luxury resort rooms for rent from Huntington to Dana Point, The Irvine Company, not known for brash moves, will bring yet another to market: the 115-acre Pelican Hill Inn will begin construction late next year and possibly open by 2006. The resort planned will include 204 hotel rooms in a series of 40 single-story bungalows with ocean and golf course views, a 150-seat restaurant, a 20,000-square-foot spa, shops, and meeting rooms. “The services are going to be comparable to high-end resorts along the coast,” says Prevette. “But at the same time we think we have a unique location adjacent to the Pelican Hill golf course.”

In fact, aside from marketing the full-service spa, Prevette says Pelican Hill Inn will be positioned as a destination golf resort that is along the lines of Pebble Beach or Pinehurst. “We think Pelican Hill has earned a reputation as one of the premier high-end golf courses in Southern California and we want to take advantage of that,” says Prevette. With tee times booked on weekends at $250 a pop, it’s hard to argue. To complement the golf course, plans also call for an approximately 25,000-square-foot clubhouse with a grill and pro shop.

The last component of the plan will be 120 multiple ownership villas and casitas, also with ocean views. The 68 villas would be detached three bedrooms of 2,150 square feet while the casitas would be two-up,two-down fourplexes of 1,650 square feet each. While this would be a form of timeshare, says Prevette, the fractional ownership interval would likely be longer than even the highest-end timeshare market.

Far from being worried about the amount of competition along the coast, Prevette echoes other hotel builders in his feeling that more destination resorts simply means more business for everyone. “It’s not unlike the big island of Hawaii where the Mauna Kea used to have the coast to itself,” he says. “Today there are a number of outstanding resorts along the Kona coast and it’s made the big island one of the favored destinations in Hawaii.”

A few of the other new resorts along our coast that are doing a lot to promote our once-quaint little space as a world-class destination are the Craftsman-style Montage Resort and Spa in Laguna Beach, where the Treasure Island trailer park once sat, and the sprawling Andalusian Village-styled Hyatt Regency on PCH in Huntington Beach.

The Montage sits on 30 acres of the best-situated coastal real estate around. Every one of its 262 rooms has an ocean view and its signature restaurant, Studio, occupies its own small point. And of course it has a 20,000-square-foot indoor/outdoor spa and fitness center. But what made the Montage possible financially was its residential aspect. Alongside the hotel is The Colony, 14 condominiums of approximately 3,000 square feet and 14 custom estate lots in the 12,000 to 14,000 square foot range. These will fetch the builders tens of millions in immediate cash to help pay down the $190 million the Montage took to develop. “The cost of luxury has risen,” says Alan Fuerstman, Montage Hotels and Resorts founder, president and CEO. “Making the deals make sense often requires a residential component.” But in the coastal Orange County of today the two go hand in hand. Just ask The Colony’s Real Estate representative, Steve High, president of Strada Properties. “Monied people want to have the resort lifestyle,” he says. And they’ll need money. The condos have price tags starting at $2.5 million and the lots will fetch $4.5 million to $7 million.

Up the road, even Surf City is redefining its image, from surf town to upscale resort – surfers are not noted for their wallet thickness. The latest addition is the $160 million Hyatt Regency Huntington Beach. It is huge, featuring 517 rooms, a 20,000-square-foot spa, three restaurants, shops, and a whopping 110,000 square feet of function space with which the hotel hopes to corner the convention trade. Far from just a monolith with a view, however, builders of the Hyatt wanted to keep a small part of the Surf City legend Huntington Beach enjoys. This can be seen in subtle features of the rooms. Sand-colored carpet, tasteful shell and starfish patterns in the rich wood furnishings and tonal beach art complement the expansive ocean views, most often featuring surfers.

And the developers aren’t done yet. On a nearby 31-acre parcel adjacent to PCH, plans are in the works for a 400-room resort, a 17-acre residential village with 516 townhomes and apartments, and a retail promenade with 193,000 square feet of space for everything from boutiques to office space. Approval will, or will not, be granted by the end of the year.

Public Offering

But perhaps there is no better example of how times – and demographics – are changing along the OC coast than the metamorphosis of the 55-year-old Balboa Bay Club in Newport Beach. In 1948 the club opened as a hamburger stand with six overnight cabanas. Soon, however, it became a retreat for well-heeled out-of-towners, mainly from Pasadena and L.A. By the ’60s the club was a favorite of Hollywood’s A-list set – Bogart and Bacall, Robert Wagner, Natalie Wood, Bob Hope, and, of course, The Duke. The BBC has also played host to five presidents, from Dwight Eisenhower to George H.W. Bush – all Republicans.

But the club has always occupied 15-acres of city-leased land and when the 50-year lease approached its renewal, debate broke out over the club’s exclusivity. The compromise was to open the club up to the public through a hotel, and in 2000, a new 50-year lease was signed.

The private aspect of the club still exists, 3,000 members strong. The beach, lawn and other parts of the club are off limits to the public, and to lease one of the bayfront Terrace Apartments – which were not razed in the redevelopment – you must be a member. The same goes for one of the 144 boat slips.

But in place of the aging club buildings on the south half of the property came the grand Andalusian-styled hotel and spa seen today. Where before the structure was simple and indicative of its “good old boys” club tradition, the new Balboa Bay Club Resort and Spa, which cost $65 million to construct, is reminiscent of an Italian piazza, the interiors rich but light, taking full advantage of the bayfront setting. It boasts a lively restaurant and lounge scene, with entertainment seven nights a week at Duke’s Place and some of the area’s best waterfront tables in the First Cabin, once a dark, member’s only spot, now a bright, rattan furniture-featuring, full-service restaurant with a huge patio. And there’s no mistake whom the Bay Club is catering to: rooms range from $270 for a bluff view to $3,500 for the three-bedroom Presidential suite. With a rich tradition, a state-of-the art new spa and fitness center, and a row of mega-yachts fronting the hotel, the club is hoping it is seen as a destination in the destination resort of the new OC.

Buying The OC

The final component of the OC’s revamp has come in the retail boom. While the rest of the country has been feeling the malaise of a recession, our area has seen the need for more shopping bags. And if you thought retail was just for the local masses, think again. “Studies have shown that the number one activity for visitors is shopping,” says Nina Robinson, vice president of The Irvine Company’s retail properties division.

It’s why the more retail centers we build, the more they come, and the more they come, the more we build.

South Coast Plaza has long been the 800-pound gorilla on the retail block, drawing visitors from around the country and world. With over 300 stores, the 2.8 million-square-foot center now actually bills itself as “the ultimate shopping resort.” That may sound presumptuous, but their retailers’ over $1 billion in annual sales shuts skeptics up pretty quickly. And even this giant has changed significantly with the times. In 2000 the Bridge of Gardens, built by noted landscape architect Kathryn Gustafson, spanned Bear Street to unite what was then known as Crystal Court with the parent center. And it’s undeniable that South Coast Plaza has become much more upscale over time, now boasting some of the most luxurious brands in the market, exclusive boutiques rivaling any street in Beverly Hills, New York or London.

In fact, during the last decade, all of coastal Orange County retail has been moving in the same direction, pushing hard to become the shopping destination of choice. Retail facelifts can be found everywhere.

Take Costa Mesa’s 17th Street, for instance, a place that is the longtime home to Winchell’s, Jiffy Lube and Me-n-Ed’s Pizza Parlor. But don’t be fooled, the European stucco machine has visited. Most notably, the once dilapidated center that houses Mi Casa and Supercuts went through a major renovation and a name change, to 17th Street Promenade. Slate-stone-adorned columns, a “cobblestone” walkway and a major face change has brought the center to life, adding new tenants like the hip and pricey boutique Lola Rouge, upscale children’s bookstore The First Page, glamorous wedding accessory designer Eric Cole, and the much sought after invitation and party accessory store, Where’s the Party, the kinds of businesses you’d expect to find at South Coast Plaza or Fashion Island.

Down the street, Westcliff Plaza, always a breezy and comfortable neighborhood shopping destination, went through the same sort of change. Between the upscale Ralph’s Fresh Fare on one end and what has to be the nicest Sav-On in its chain on the other, are places like Kayak’s, Robert Taylor Salon, Blue Mambo, and the ritziest hardware store around.

It all started, not surprisingly, in the same year that Newport Coast went public, 1989. It was then that Fashion Island, which was built in 1967, went through what The Irvine Company terms its Renaissance. It involved a 70,000 square foot expansion, including 60 new stores and the addition of Edwards Island Cinemas. But most significantly, it changed the face of the center. “It took the center from 1967 to a beautiful Mediterranean-inspired shopping village with passeos and promenades of shops,” says Robinson. Since then the center has thrived for the most part. In fact, two years ago, there was another 35,000-square-foot expansion and enhancement.

Fashion Island is just one piece of the retail puzzle, however. The Irvine Company is expanding the idea of destination shopping with the additions of Corona del Mar Plaza, Crystal Cove Promenade and the recently opened Bluffs, all called “Neighborhood Centers.” And while many of the outlets in these new centers are service oriented and aimed at the local communities, they also have many upscale boutiques and specialty shops. Places that you might just find in a Beverly Hills by the sea. þ

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