Disputed plan to build on O.C.’s Banning Ranch could hit major roadblock

The hotly contested proposal to build housing, retail space, a hotel and community parks on Orange County’s Banning Ranch could hit a major roadblock next week.

Staff of the California Coastal Commission is recommending that the commissioners, who have final say over coastal development projects statewide, deny Newport Banning Ranch LLC’s plan to build 1,375 homes, a 75-room boutique hotel, 75,000 square feet of retail and several parks on about 95 acres of the 401-acre expanse.

The commission is scheduled to take up the issue at its meeting Wednesday in Long Beach.

Project plans show that oil operations that have been on the site since about 1944 would be condensed to 16.5 acres and that about 261 acres would remain open space.

But a commission staff report expressed opposition to the project because the land is home to “sensitive coastal species,” including the threatened California gnatcatcher, a rare vernal pool system and one of the few remaining significant areas of native grassland. It also is known to contain Native American archaeological resources, the report said.

The staff also noted that an earthquake fault runs near the eastern side of the site, meaning that structures must be located outside the fault zone — or about 50 feet from fault traces.

“Commission staff recognize that the proposed project offers some benefits, including condensing the oil production to a portion of the property and subsequently cleaning up the remainder, establishing a coordinated habitat restoration and conservation plan for the south arroyo and lowlands wetlands, and developing public parks, public trails and a visitor-serving resort,” according to the report.

But those benefits “are entwined with substantial impacts to highly sensitive resources and permanent loss of a very rare and valuable ecosystem that cannot be replicated.”

The report suggests that the benefits could be incorporated into a less-intense development plan.

Chris Yelich, a principal with Brooks Street, a real estate development firm in Newport Beach that is associated with the project, said the development would benefit Costa Mesa and Newport Beach residents by reducing the oil operations and opening the land to the public, which for decades has been blocked from accessing it.

“We’re looking forward to going before the Coastal Commission to talk about our plans for the site,” Yelich said.

He said the Banning Ranch Conservancy, a preservation group that opposes development at the site, has presented “misleading information” in its quest to defeat the project, including claims about the group’s ability to purchase the land.

“They haven’t raised a penny,” he said.

Steve Ray, the conservancy’s executive director, countered that the organization has raised about $5 million. Information from the Orange County assessor’s office indicates the Banning Ranch property is worth more than $30 million.

The developer and the preservation group have butted heads over the project for more than three years.

After the Newport Beach City Council approved the proposal in 2012, the Banning Ranch Conservancy filed a lawsuit alleging that the city violated its general plan, which prioritizes open space in that area of the city.

The conservancy argues that the city did not work with the Coastal Commission in prioritizing specific areas for preservation, in violation of city law. The group also alleges that the project’s environmental report did not detail mitigation measures for the development’s potential effects, according to court documents.

The case has made its way through Orange County Superior Court and California’s 4th District Court of Appeal and will next be heard by the California Supreme Court on a yet-undetermined date.

In the meantime, Ray said, the commission staff’s report is an important development.

“It is very heartening that the Coastal Commission staff has studied all the issues, understands them and has come to the same conclusion that this project is totally unacceptable on this property,” he said.

hannah.fry@latimes.com

Twitter: @HannahFryTCN

Fry writes for Times Community News.