Meet the developer behind San Luis Obispo's most controversial project

Gary Grossman of Coastal Community Builders Inc.
Gary Grossman of Coastal Community Builders Inc. jjohnston@thetribunenews.com

The passion that drives local developer Gary Grossman and his love for the Central Coast is evident upon first encounter.

Grossman has been a quiet and steady force in the region — building more than 2,000 homes and more than a dozen commercial projects in the last two decades.

His Pismo Beach-based company, Coastal Community Builders, currently has more than 20 projects in various phases of development underway from Solvang to Paso Robles, making him a leading housing developer in the area.

The largest project is San Luis Ranch, planned for the 131-acre Dalidio property at the southern gateway of San Luis Obispo. The property has a history of controversy, as former property owner Ernie Dalidio fought for years to develop it but faced opposition from environmental groups and downtown businesses.

Grossman, 50, is described by those who know him as an intelligent businessman with a penchant for detail and a passion for architecture.

“He is nuclear-powered,” said Lenny Grant, architect and principal of RRM Design Group. “He has an energy force about him that other people don’t have.”

In his private life, he is deeply rooted in his family and loyal to his friends. His mother, Adele McGee, lives close to him in a lavish Shell Beach home that Grossman meticulously designed for her and his stepdad, Roger McGee, in 2009.

An avid world traveler, Grossman has spent time in remote places including Iceland, Bhutan and Mongolia. He also is a voracious reader, known to read as many as five books in a week, and is famous for throwing unforgettable parties that include top-notch entertainment such as Macy Gray and Blondie.

His philanthropic endeavors have helped to preserve open space throughout the county including a recent $25,000 donation for the proposed Pismo Preserve.

He has given to many other causes including Woods Humane Society, the French Hospital Medical Center cardiac unit, Dinosaur Caves Park and a scholarship endowment with the local chapter of PFLAG National (formerly known as Parents, Families and Friends of Lesbians and Gays) that has sent more than 20 youth to college.

“The truth of the matter is, I follow my beliefs,” Grossman said. “I am fiscally conservative and socially progressive.”

Despite the allures of his travels, Shell Beach has remained his home for more than 20 years.

“People know you here,” said Grossman. “I like going to the market and having them tell me that I forgot my Cheerios.”

Attention to detail

As a kid growing up in Los Angeles, Grossman was always playing with Legos and drawing houses. Today, he still pens all of the floor plans for his projects.

He got his start young — shortly after graduating from UCLA with a bachelor’s degree in literature and a master’s of science degree in urban and regional planning and real estate financing.

In 1988, at the age of 25, he moved to the Central Coast and joined a family friend in Santa Maria to work as a builder.

“He had been a builder for 40 or 50 years and he taught me a lot,” said Grossman. “He was not a great businessman, but he was a tremendous builder.”

After his friend, Don Byron, died, Grossman took over the company and started building subdivisions in Santa Maria, continuing to be mentored by other longtime developers.

Grossman continued to prosper, founding Inland Pacific Builders — now Coastal Community Builders.

“I always thought that the typical cookie-cutter subdivisions in Los Angeles were impersonal,” said Grossman. “All of the houses looked the same, and I wasn’t impressed by it.”

Grossman jokes that he is an “architectophile,” always studying the leading edge of architectural styles and relying on his instinct when designing projects.

He has been known to walk into a home and completely flip the design mid-stride if the home isn’t feeling the way he wants it to. One time, that meant moving the kitchen to the other side of the house.

“He has a knack for what people like and want in housing,” said Grant, who has collaborated on more than 70 projects with Grossman over the last 16 years. “It can be tough to work with him at times because he is such an intense person. … When you work for him, he is always fiery and thinking super fast. He is a really bright guy.”

The fixer

Grossman typically builds projects that already have preliminary permits — many times picking up projects that have previously stalled or fallen through.

“I have an affinity for fixing things,” Grossman said.

The Vistas at Pismo Village, a current project that encompasses 16 single-family and 16 attached townhomes in the heart of Pismo Beach, is one of those projects.

Grossman purchased the property in 2013 from an Orange County developer. The property had been through four ownership changes in 15 years and was last permitted for a large condominium building, subterranean parking and retail.

“That project just wasn’t right for a large block downtown,” Grossman said. “It didn’t look like a community.”

He said that once the project was turned around, 16 homes sold in the first two weeks.

“We took a failed project and turned into a success,” said Grossman. “I like that. It is something that drives me.”

Grossman said that success comes from working closely with the communities where the projects are being built — learning what both the cities and community members envision and then providing it.

It is difficult to find anyone who has seriously opposed Grossman’s past projects. Carolyn Johnson, planning manager in Pismo Beach, said she doesn’t recall any of his projects being appealed to the City Council.

“He really tries to get the pulse of the community before he dives in,” Johnson said.

Surviving the recession

Grossman’s company grew to more than 100 employees at its height in the late 1990s. By the time he was in his late 30s, he said he had pumped more than a billion dollars into the economy by hiring local companies and using local banks to build thousands of homes.

“There is certainly a profit, and by using local banks, that allows them to lend out more money,” said Grossman. “All of the money we put into the economy went to the local economy.”

And then the economy began to decline. Grossman saw the Great Recession coming.

“In 2006, he had four large projects at the time, and he just shut them down and sold right when things were at the top,” Grant said. “Something was telling him that things were bad and he got out before everyone else did.”

Grossman said he was watching a CNN news story while on a boat in Europe when he realized he had to make quick changes.

“I actually got off the boat and got on a plane and flew home and got all of my advisers together to talk about all the different directions the economy could go and why,” Grossman said.

He decided to sell the bulk of the company, laying off dozens of employees and only keeping a few vital positions intact.

He took a hiatus from building, spending time with his family and friends and traveling.

Then once the economy began to improve, he reached out to former employees and quickly began to rebuild the company.

In January 2013 he was down to only 14 employees. Today he has close to 70 people working for him. And he is confident the company will continue to grow.

“I think it is somewhat remarkable the level of growth he has obtained in such a short period of time,” said San Luis Obispo developer Andy Mangano. “He is extremely aggressive in the marketplace. He is concerned about bringing value to his projects from a market standpoint and as an investor.”

The recession upended many longtime developers who were leveraged beyond what they could carry through the downturn. “It chastened a lot of people,” said Grossman.

Grossman said a history of careful management practices, as well as a relationship with a hedge fund equity partner on the East Coast, allowed him secure capital to start building again.

“I was very prudent with lenders, and I had a good track record,” he said. “I went into the bank in 2012 and said I wanted to get started.”

He continues to use local subcontractors for all of his projects. Grossman estimates that he will put more than $750 million into the economy in the next three years through the projects he has underway.

Dalidio Ranch plans

San Luis Ranch at the bucolic Dalidio Ranch in San Luis Obispo is the largest project on Grossman’s slate.

It is also the most controversial. Development of the $19.7 million ranch has been contentious in the past both because of its prominent location and the conversion of agricultural land to other uses.

Grossman said he decided to pursue the property once Ernie Dalidio was ready to sell because Grossman didn’t want an outside developer to take it over.

“Had I not jumped up, someone else would have,” said Grossman. “And it would have been another 10 years of turmoil.”

In 2006, voters approved Measure J that would allow big-box stores, sports fields and a business park.

But Grossman’s plans are drastically different — focusing more on housing than commercial buildings.

“I look at what was approved, and that is not what I want to drive by,” Grossman said. “I love going to Farmers Market every Thursday. I love the downtown. It is what keeps me living here.”

He said he wants to build entry-level homes that people working in San Luis Obispo can afford. “The income-to-housing ratio is so far off here,” he said.

The city’s General Plan for development requires that 50 percent of the property — about 65 acres — be preserved as agricultural open space.

Grossman envisions a network of walking paths, pocket parks and trails that will connect neighborhoods — up to 500 bungalow and Craftsman-style homes — to open spaces surrounding the proposed development.

The project also includes plans for an enclave of commercial space capped at about 200,000 square feet, as well as 150,000 square feet of office space and a 200-room high-end hotel with room for conference facilities.

Grossman was flooded by requests from residents who want a department store — including a plea from his own mother.

“I don’t want to compete with the downtown,” said Grossman. “There is room to have a Nordstrom’s Rack or another department store and local amenities.”

Long road ahead

San Luis Ranch is located in the county but is within the city’s sphere of influence. It will eventually be annexed into the city.

County Supervisor Adam Hill, who has known Grossman socially for years, said the project belongs in the city.

“It is basically an island in the city,” said Hill. “There is nothing more high profile than this project, because of the politics. But a lot of time has passed, and there is less angst about it. Gary’s approach to me is that he wants to do what the community wants.”

In April, the San Luis Obispo City Council voted unanimously to begin the application process, allowing Grossman to begin seeking the General Plan amendments and various entitlements needed to move the project forward.

The city is finalizing an update of its General Plan — which will dictate development standards for the project. Derek Johnson, the city’s community development director, expects that process to be complete by year’s end.

Grossman will then submit a formal application to develop the property, he said.

Technical and environmental studies will be done before a development can be considered by the Planning Commission and City Council. The process will likely take years.

“Gary has the lasting power to see the project through to fruition,” Mangano said. “Gary has been a survivor, and when it was extremely difficult, he paid his debts and survived the downturn. A lot of folks in the industry didn’t survive in that respect. He did, and he came out on the other end to be very resourceful.”

Some developments by Gary Grossman’s company, Coastal Community Builders:

1995: Santa Maria, Regency Estates, 140 single-family homes

1998: Pismo Beach, Villas al Mar, 18 semi-custom homes

2001: Santa Maria, Cherry Blossom Ranch, 117 single-family homes

2001: Pismo Beach, Casa Bella Vista, 24 condominiums

2003: Santa Maria, The Classics at Bradley Square, 302 single-family homes

2003: Santa Maria, Oak Creek Villas, 112 condominiums, 11 buildings

2004: Santa Maria, Somerset Garden Townhomes, 93 townhomes, 15 buildings, clubhouse and pool

2005: Santa Maria, Cherrywood Estates, 61 single-family homes

2006: Santa Maria, Mission Creek Village: 116 condominiums, 21 buildings

2007: Santa Maria, La Ventana, 52 single-family homes

2007: Santa Maria, The Estates at Pacific Crest, 165 single-family homes

2008: Santa Maria, Vista La Ventana, 57 condominiums, 10 buildings

2012: Orcutt, Mesa Verde, 30 single-family homes

2012: San Luis Obispo, Mission Estates, 10 single-family homes

Current: Solvang, Vistas at Skytt Mesa, 128 single-family homes

Current: Atascadero, Estancia, 10 single-family homes on acreage

Current: Atascadero , Carmel Canyon 17 single-family homes on acreage

Current: Atascadero, Twin Oaks at Westfront Village, 32 single-family homes

Current: San Luis Obispo, SLO Terrace, 17 single-family homes

Current: Pismo Beach, The Village at Pacific West, 37 single-family homes, 36 condominiums

Current: Pismo Beach, Terraces at Las Ventanas: 36 single-family homes

Current: Arroyo Grande, Monte Sereno, 10 custom home lots

Current: Santa Maria, Legacy at La Ventana, 120 single-family homes

Current: Santa Maria, Heritage Square, 296 single-family homes

Related stories from San Luis Obispo Tribune