Safely reopening the local economy and dealing with an expected $6.5 million 2020–21 budget shortfall were a couple of the main issues that emerged at a Dana Point City Council candidates forum recently.
The redevelopment of Dana Point Harbor, homelessness, sober living homes and short-term rentals also surfaced as important issues based on questions posed by residents in the hour-long virtual forum hosted by the Chamber of Commerce on Sept. 30.
Candidates Mike Frost and Gary Newkirk are running for a council seat in District 4 (Lantern Village), while Michael Villar and Benjamin Bebee are vying for a seat in District 5 (Capistrano Beach).
Budget Woes and Tourism
All candidates agreed that the main reason for the budget shortfall is the COVID-19 pandemic, and a sudden drop in the city’s largest revenue source, the Transient Occupancy Tax (TOT) levied on hotels.
Frost said that in fiscal year 2019–20, which ended in June, revenue fell $3.5 million short of budget projections. About 75 percent of the hole was backfilled with reserve funding, and 25 percent was met through spending cuts.
In 2020–21, reserve funding will cover half of the $6.5 million shortfall, but spending cuts are inevitable, Frost said.
“It should be noted, we are saving almost $900,000 in salaries,” he said.
Frost has lived in Southern Orange County for 18 years, and in the Lantern Village community since 2009. He and his wife, Heidi, have two children. With a background in corporate finance, Frost said he would bring a “solutions-oriented mindset” to the council. “That’s my personality, but also that’s just business,” he said.
All candidates concurred that safely reopening hotels and returning tourism to pre-pandemic levels is the most obvious way to solve the budget crisis, but that immediate economic recovery remains wishful thinking. They agreed that Dana Point, like most other cities, would need to tighten its belt.
Faced with unlikely prospects that national or international tourists will flock to Dana Point while the pandemic lingers, Newkirk said the city should redirect its marketing efforts at local residents and tourists from neighboring inland areas who might be ready for a “Stay-cation” or “Drive-cations” to the beach after months of statewide stay-at-home orders.
Newkirk is a 23-year resident of Dana Point, a UCLA economics grad, and a former stockbroker and sports photojournalist. He and his wife, Kathy, have been married 30 years and raised one son. Newkirk sat on the local Planning Commission for more than five years and dealt with issues such as zoning, high-density development, parking shortages, short-term rentals, group rehabilitation homes, and homelessness.
Dana Point Harbor is a 277-acre recreational area and a focal point of local tourism. Much of the harbor infrastructure has deteriorated over the last 50 years, however Orange County Supervisors have approved a contract with an engineering and architecture firm to develop a plan to revitalize the harbor.
Construction for the Dana Point Harbor Revitalization Project, which will include replacement of buildings along the marina and infrastructure, is expected to start in late 2020. The estimated cost is $1.5 billion over a decade.
Frost said the city also needs to rethink and rebuild its brand to compete with other popular beach destinations in Southern California.
In late September, the Visit Dana Point board of directors voted to temporarily suspend operations of the marketing agency. Visit Dana Point, made up of representatives of major hotels and resorts, was formed by the city’s Tourism Business Improvement District (TBID) in 2016 to promote local tourism.
With low revenue, “it makes sense they put the TBID on hold,” Frost said.
“But, we do need to get all three hotels back up and running. That’s critical, and really requires city leaders and other stakeholders sitting down with the GMs, and most likely coming up with a consistent, comprehensive message of how Dana Point handles health and safety,” he said. “We have to think of driving revenue through that prism of health and safety.”
Villar agreed. “The first thing that has to happen is we’ve got to safely start returning back to some sort of normal, and that means all of us doing our part to ensure that we’re driving down the threat of this virus. … We don’t want to go backwards.”
Bebee called for a line-by-line analysis of the budget. “I think that, as a whole, I will be diligent and a fiscally conservative representative for our city,” he said. Bebee, 38, moved to Southern California about 10 years ago. He is a father and has a background in business management.
Sober Living Homes
In Dana Point, operators of sober living homes must obtain state licenses. However, nearly two dozen sober living homes have closed rather than comply with state licensing requirements. In the last few years, some nearby cities have faced legal problems for enacting stricter regulations, so candidates were asked how they would handle sober living homes.
Bebee pointed out that substance abuse disorders are recognized under the Americans with Disabilities Act (ADA) and he urged compassion for people trying to beat their addictions.
“These are people who need our assistance so that they can be productive members of society. The fact that these houses would rather fold than comply with the regulations is an indication of their commitment to substance-use disorder treatment,” Bebee said. “I’m committed to getting our constituency the help that they need to be productive in our community.”
Newkirk said recovering addicts deserve treatment, but often aren’t getting the help they need in Dana Point. He said the homes are just a place to stay and serve as “cash machines” for operators. “They bring them in, they get a huge amount of money, and then bus them to other places for treatment.”
Suing group homes for non-compliance is not the answer, Newkirk said. “Our current plan of sicking our lawyers on it is not the right plan, because that’s an expensive alternative.”
On his website, Newkirk advocates for the enactment of a city ordinance, similar to one in Costa Mesa, that would allow Dana Point to “set specific regulations to protect vulnerable addicts while addressing residents’ needs for safety and security.” He also wants to “reduce expensive and needless legal fees now spent suing group homes one at a time.”
Frost agreed. “We want to ensure we are compassionate … although we also believe it’s not a residential use [of land if a sober living home is opened]. It definitely changes the dynamic on a street. A bunch of our questions tonight have been about the budget, and about what expenditures are we going to cut. First and foremost, we’re going to cut expensive, unwinnable litigation.”
While Villar supports the group homes, he said neighborhood safety and property values are also important to residents because “our homes are our biggest investments.”
“I am a compassionate person. … People have addictions. They have issues … and we like to help them. We want to see them resolve the issues, but it can’t come at the expense of safety in our neighborhoods. So, I do agree that regulation and enforcing that regulation is key in order to allow sober living homes to exist and to be part of this community,” Villar said.
Short-term rentals have been a contentious issue in Dana Point for years. The city placed a moratorium on new permits in 2016, but the city’s revised budget for the next fiscal year estimates that short-term rentals will bring in $575,000 in tax revenue.
“I’m a residents-first guy,” said Villar. “I know that our residents have issues with short-term rentals. I think that there is room in Capistrano Beach and Dana Point for short-term rentals in a very restricted kind of a level. We need to define what those restrictions are.”
He noted that more than 70 percent of short-term rental accommodations are located within District 4 and 5. “We need to have a voice in short-term rentals from District 4 and District 5.” Villar recently wrote a letter to the local planning commission to suspend decisions on short-term rentals until after the Nov. 3 election.
Ultimately, he said, any proposed restrictions related to short-term rentals should go to the voters to decide. “If we can put a very cohesive team together of pro-short-term rentals and those that are against short-term rentals, we can come up with solutions that fit for everybody,” he said.
Villar, 52, is a retired U.S. Marine Corps helicopter pilot and a lean director in the construction industry. He also holds a master’s degree in computer science. He and his wife, Denise, have been married for 25 years and have raised three children.
Bebee also said he wants to listen to the concerns of residents on short-term rentals, but said he’s confident the city can have both short-term rentals and safety.
“I’ve heard compelling arguments from both sides,” he said. “I’m inclined to think in terms of the greater good. I can see both potential benefit for our economy as well as the possible risks inherent in opening our community to people that we don’t know—strangers.”
Homelessness is a major concern for Dana Point residents, and candidates were asked how they would handle it.
Bebee said he plans to open a nonprofit organization to address homelessness. “I don’t believe that it’s a personal weakness, or something like that, that lands people on the street. I think the majority of the time, it’s much more layered than that. So I’m very compassionate towards these sorts of things, and I’m interested in really working towards long-term solutions. So that’s what I’m going to do.”
Newkirk said he believes the city has taken the right path to create more effective outreach programs to build trust with homeless people and help them get off the street.
Villar agreed. “I really do think that the outreach programs are the way to go. I think you have to develop relationships with people and you have to understand them at a much deeper level, rather than just say, ‘Hey, get a job! Why don’t you have a job?’ It’s not that simple. There’s lots of reasons why people fall into homelessness. We need to be compassionate about that,” he said.
Frost said homelessness is a problem that won’t likely be solved, but can be managed. He said the city has done a good job in managing homelessness, but that more work can be done to coordinate efforts with the county to create more shelters.
With the Town Center currently being rebuilt and the Doheny Village Revitalization Project underway, District 4 candidates were asked how they would protect the small-town charm of Dana Point while revitalizing and encouraging a more vibrant business climate and community. They were also asked how they would deal with requests from developers to build bigger buildings with less parking.
Frost said the development plans are in place and there will be no variances granted. “I have no problem going back and ensuring the development standards that we have in certain areas, [and] push developers to build the products that we want.”
Though developers often ask for variances, the city should stick to its development plans, Newkirk said. “We need to hold to our guns with the planning.”
Other Council Seats
In 2018, the city went from at-large council seats to districts. In 2018, Councilmembers Joe Muller, Richard Viczorek, and Jamey Federico were elected to serve four-year terms in Districts 1, 2 and 3, respectively. Councilwoman Debra Lewis, who had held an at-large seat, resigned in July. Councilman Paul Wyatt currently holds an at-large seat but is not seeking re-election.