Residential-business districts in Ladera Ranch prove popular despite tough first decade.
When Realtor Ron Luna decided a decade ago to leave Century 21 and strike out on his own, he began looking at office space for rent near his Mission Viejo home.
Luna’s search took him southeast, to the developing community of Ladera Ranch. There he found a unique setup that made perfect sense for his young family: Front Street Business District.
The neighborhood is designed around 22 live/work units, with storefronts for small businesses downstairs and separate entrances for homes upstairs. The owners are allowed extra signage, can have an employee and are given a few additional parking spaces to accommodate low-traffic enterprises, such as photography or architecture.
“You don’t have to pay a separate commercial lease and a mortgage,” Luna said. His home was within walking distance of new schools for his then 5- and 8-year-old daughters.
Ten years later, Luna’s Front Street Realty and Mortgage is one of five original businesses remaining on the block.
Amid bankruptcies, tax liens, short sales and foreclosures, roughly every other aspiring entrepreneur in Front Street has learned the hard way just how difficult it is to make mortgage payments and keep a business open – particularly through down times.
The picture is even bleaker in Ladera’s second live/work neighborhood, Banister Street Business Enclaves. Property records show roughly two-thirds of Banister Street’s 24 townhomes have floundered since they first sold in 2005.
But in both neighborhoods, natives continue to proudly run successful businesses. From day care services to music schools, salons to bridal magazine publishers, they’ve found ways to make peace with working where they live.
WORKING FROM HOME
New tenants also continue snatching up the properties soon after they come on the market, as they look for ways to ditch their commutes, gain a tax write-off and spend more time with their families.
As Ladera Ranch’s central villages were being developed in the early 2000s, technology that made it easier to work from home sparked growing interest in again blending residential and commercial space.
“Downtown lofts were getting converted into retail at the bottom and residential above,” said Paul Johnson, who helped design Ladera as vice president of community development for Rancho Mission Viejo. While most of those conversions were happening in dense, urban environments, Johnson said his market research showed interest in bringing the concept to suburbia. “We found a lot of people saying, ‘I would love to run a small business in my neighborhood.'”
Rancho Mission Viejo brought the unique proposal to county officials for approval, specifying allowed hours of operation and forbidding businesses such as tattoo parlors. After much back and forth, Johnson said they created a special “home-based business enterprise zone.” It applied commercial zoning to the downstairs space – calling for things such as fire-safe doors and handicap accessibility – and residential zoning for the home.
AN OLD IDEA, NEW AGAIN
As foreign as the concept was at the time, Johnson said, “That really is an idea that has been in this nation for a long, long time.”
With a nod to the traditional neighborhood “beauty parlor,” Jeannette Currie bought 95 Zinnia Street and opened Front Street Salon in 2003. “It just takes us back to that old fashioned, one-on-one customer service,” she said.
Currie had already owned a couple of salons in Washington and spent time traveling as a product representative before she and her husband settled in Irvine. They soon decided they needed a larger home and that it was time to open a new salon – not knowing they’d get both together.
“I don’t think if we didn’t have these concepts I would’ve located to Ladera,” Currie said. “I just missed being behind the chair, so we decided to open a salon and build a family.”
Though the live/work neighborhoods weren’t designed to facilitate businesses that needed foot traffic to attract customers, Currie said residents saw her signs as they jogged along the Sienna Parkway greenbelt and began sharing her cellphone number. Now Currie schedules clients around family time, finding ways to be a full-time business owner and a full-time mom.
“It is nice because I am able to juggle both throughout the day,” she said. “In between while I’m doing clients, I can run in the house and do a load of laundry if I need to. … If I have late clients, while their color is processing, I will run in to cook dinner and tend to the kids.”
THE PERFECT STORM
As appealing as the Ladera live/work neighborhoods were, their timing couldn’t have been much worse.
Banister Street’s 24 townhomes hit the real estate market in 2005, just before its peak. Within six years, some of the properties had lost half their value, leaving owners less concerned with running a business than with keeping their homes.
That struggle is still clear at Banister Street today, where plaques meant to harbor business signs sit empty at 15 of the 24 units.
“They really took a beating,” said Luna, the Realtor, who’s sold several properties in the neighboring business district.
Over in Front Street, many residents rode the same terrifying wave, while a couple of original buyers got out just in time.
Builder Standard Pacific Corp. sold a property along Gilly Flower for $880,000 in 2003, with business records for a civil engineer registered at the address. In June 2007, Thanitra Pichedvanichok bought the property for $1.2 million as an investment and to house her growing home business, Tspoons, a social cooking school.
Tspoons did well – a little too well, actually.
Pichedvanichok’s phone would ring at all hours, with couples calling from Las Vegas looking for a unique date night. And though classes were by appointment only, her customers would come to the door at all hours, and if she didn’t answer, even walk around to the back to knock on her home door.
“It was people outside that didn’t really understand how the concept worked, that people live there as well,” Pichedvanichok said. “I just had no privacy, no personal life.”
HOME PRICES REBOUND
In January – stuck with a high-interest mortgage she couldn’t refinance as she’d been she assured she could – Pichedvanichok did a short sale on the property and let it go for $676,000.
“I miss that place in the sense that that’s where Tspoons started,” said Pichedvanichok, who now lives in another Ladera village and runs Tspoons from a larger commercial space in San Juan Capistrano. “It’s definitely a nice energy. … I just wish that I was able to do something different with the loan.”
Luna said home prices in Ladera are rebounding quicker than he expected. There are no Banister Street properties for sale today and just one on Front Street – a short sale listed at $698,000.
As recession pains begin to ease, Luna hopes residents in the business district might be able to show renewed interest in finding ways to make the neighborhood prosper.
Kim Lee, who has run Atelier Creative Arts for Children in Front Street for three years, would like to get businesses more involved with community events in Ladera. In the meantime, her art studio is flourishing. And Lee said she has no plans to change her home-business arrangement, at least until her kids are grown.
“Otherwise I won’t have this balance,” she said.