Shopoff to Build 250 Homes and Hotel in Huntington Beach

Shopoff Realty Investments has moved forward with a plan to build 250 homes and a 215-room boutique hotel atop a former oil tank farm in Huntington Beach.

The Irvine-based developer led by Bill Shopoff has scheduled a hearing with the California Coastal Commission to consider approving the project on the former Magnolia Tank Farm west of Magnolia Street and north of the Huntington Beach Channel, the Orange County Register reported. The hearing is set for July 10.

The commission will weigh in on the 29-acre project rezoned by the city in 2021 just north of the Magnolia Marsh, some 2,000 feet from the beach. The property has been scraped clean of oil tanks and now appears in satellite images as a truck storage lot.

A year ago, the commission delayed deciding whether it would grant zoning changes to allow the development after raising concerns about flooding caused by sea-level rise.

But now commission staffers recommend the commissioners approve the project with changes related to affordable housing and hotel room rents. There was no more mention of the commission’s previous concerns about rising seas and potential floods from climate change.

If approved with modifications, 20 percent of the homes would be affordable, with half of them offered to qualified workers at the hotel.

The hotel would also need to have 25 percent of its rooms at affordable rates. The affordable rooms would likely rent for $150 a night if built today, according to a commission staff report.

Recently improved flood walls for the Huntington Beach Channel would help protect the development from future flooding, according to a study submitted with the project application.

But there are risks of floods in future decades should a major storm surge hit the beach, combined with several feet of sea level rise, according to the study submitted by an unidentified consulting firm.

Shopoff bought the Magnolia Tank Farm north of Pacific Coast Highway in 2016 for $26.5 million, or $913,793 an acre.

Plans now call for a 250 single-family and attached homes, a 215-room boutique lodge, 19,000 square feet of shops and restaurants and a 4-acre park, according to a Shopoff website.

Next to the project site is the former Ascon landfill, which until 1984 took in industrial, oil field and construction waste, now undergoing an environmental cleanup. The state Department of Toxic Substances Control has deemed the development safe from contamination from the former private dump, according to the Register.

A coalition of environmental groups, including the Angeles Chapter of the Sierra Club, says not so fast. They claim the only suitable use for the low-lying property would be its restoration as a wetland.

The groups — which include the Sierra Club, Orange County Coastkeepers and Surfrider Foundation — also say the housing and hotel development, if built atop a site raised to prevent flooding, would divert flood waters into adjacent residential neighborhoods.

Shopoff Realty Investments, founded by Bill Shopoff in 1992, had $3 billion in assets under management at the end of last year with $477 million in property sales and financing, up from $160 million in 2022, according to the Orange County Business Journal.

— Dana Bartholomew