Wealthy Newport Beach Splurges $26 Million to Hide Power Lines

Newport Beach, California is investing millions of dollars to remove unsightly power lines in an effort to boost its already sky-high property values.

(Bloomberg) — Newport Beach, California is investing millions of dollars to remove unsightly power lines in an effort to boost its already sky-high property values. 

The city tapped the municipal market for roughly $26 million this week to bury the lines in two sections of the beach-side town, which will “enhance neighborhood aesthetics, safety, and reliability” according to bond documents. 

In 2021, residents approved a ballot measure to carry out the renovations and they’ll pay special tax levies that will secure the bonds. Newport Beach is one of the wealthiest cities in the country, with a median household income of more than $140,000 — double the US average — while the median home price is more than $3 million. 

The city is home to companies such as Chipotle Mexican Grill Inc. and Pacific Investment Management Co. and residents include the late actor John Wayne and Donald Bren, the billionaire chairman of the Irvine Co., who developed many of Newport Beach’s shopping centers, golf courses and housing subdivisions. 

“I show properties, and it’s obviously nicer to be in an area that is more attractive for myself and my clients,” Andrew Karigan, a local Realtor said in an interview. “It’s a plus if they can do it and are willing to spend the money to do it.”

Proceeds raised in the bond deal will construct underground infrastructure to hide the power lines in two seperate sections of the city. One neighborhood covers most of Central Balboa Island, a man-made island connected to the mainland by a short bridge. Most of the homes on the island are vacation properties, bond documents say. 

Balboa Island sports what Karigan describes as “an all Americana feel.” Removing the power lines on the densely-populated island will “open up the sky” and give Balboa a “much cleaner, nicer look,” he said.

The other neighborhood receiving funding is along the Pacific Coast Highway. 

Though so-called undergrounding efforts are fairly uncommon, they happen more frequently in Southern California’s wealthier coastal communities, said Stifel Financial Corp. Managing Director Sara Brown. 

“When you look out your ocean view house and you’re seeing utility lines crossing your vision, the goal is to remove that,” she said. Stifel served as the underwriter on the transaction. 

There’s often a safety component to underground power lines, especially in California where wildfires can easily spark. Governor Gavin Newsom signed a law in 2022 accelerating the undergrounding process in high-risk fire zones. 

That was less of a consideration for the current Newport Beach project because the affected area faces little wildfire risk, according to Mayor Pro Tem Will O’Neill. He added that parts of the city that are more susceptible to fires like the Newport Coast neighborhood already have underground utility lines. The city has undergone a dozen or so resident-lead deals to retroactively bury the lines, while newer projects place them underground during construction.

“On the aesthetic side, it just looks better not to have poles and wires,” O’Neill said in an interview. 

–With assistance from John Gittelsohn and Sam Hall.

(Updates to expand on official’s comments regarding wildfire risk in penultimate paragraph.)

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