After rejection of development plan, Banning Ranch owner weighs next move

Though the latest chapter in a nearly two-decade saga over Banning Ranch ended late Wednesday with the California Coastal Commission's rejection of a large development project proposed for the site, the story is likely far from its conclusion.

Property owner Newport Banning Ranch LLC had hoped to build 895 homes, a 75-room hotel, a 20-bed hostel and 45,100 square feet of retail space on 62 acres of the 401-acre scrub- and grass-covered coastal expanse in Newport Beach, some of which has been occupied by oil operations for decades.

But after roughly nine hours of discussion at the Newport Beach Civic Center on Wednesday, the Coastal Commission — which has final say over development on the coast — denied the project on a 9-1 vote, saying the company and commission staff were too far apart in their visions for the site.

The decision left the developer to weigh its options, which may include abandoning the prospect of developing the site, suing the Coastal Commission over the vote or revising the project and resubmitting it to the commission after at least six months. If it resubmits, it would have to pay a fee of at least $250,000.

Newport Banning Ranch LLC consists of Aera Energy — a subsidiary of Exxon Mobil Corp. and Shell Oil Co. — investment firm Cherokee Newport Beach and real estate developer Brooks Street.

Spokesman Adam Alberti said Thursday that it's too early to speculate what the partnership's next move might be.

But supporters and opponents of the project agreed on one thing following the commission's decision: It's unlikely Newport Banning Ranch will accept Wednesday's vote and do nothing.

"We're going to be ever vigilant," said Steve Ray, executive director of the Banning Ranch Conservancy, which opposed the project over concern for environmentally sensitive areas on the site.

Commission Vice Chairwoman Dayna Bochco also indicated Wednesday that the denial wouldn't kill Newport Banning Ranch's hope for a development on the land, which she said has been "battered, bruised and decimated" by oil operations for the past 70 years.

"We're here to say yes to things, but we're here to say yes to things that make sense," she said. "I don't think ... that's the end of this project. What we really need to do is take a much closer look at a very, very sensitive habitat."

Commissioner Mary Shallenberger made the motion to reject the plan, citing a lack of cohesion between the developer and commission staff members who recommended the development be reduced to about a third of the proposed size.

"It is clear to me from today's testimony from the staff report, the developer and the public that we are still very far apart," she said during the hearing. "The developer has made it clear they do not accept staff's recommendation. This is a project we have to get right. We can't get just good enough on this one."

Commissioner Roberto Uranga dissented in the vote, citing merits of the proposed project, including opening the site for public use and educational opportunities.

"There is a project; it's just not to the level that's acceptable to everyone," he said. "There's probably still some opportunity to come to middle ground on this. We just haven't reached it yet."

Commissioner Wendy Mitchell was absent, and Chairman Steve Kinsey recused himself after falling under scrutiny earlier this year for failing to promptly report private meetings with members of the Banning Ranch development team.

As part of its proposal, Newport Banning Ranch had set aside about 329 acres as preserved, natural open space with about seven miles of public trails. The company had long billed its development project as a means to fund cleanup and restoration of the oil field.

"The result of the vote is continuation of walled and gated acres of California coast that's deeply in need of restoration," Alberti said. "That being said, we remain committed to a clean, restored, open Banning Ranch and the vision that we've established."

Commission staff had recommended approval of the Banning Ranch development only with conditions that would have reduced its footprint to about 19.7 acres that fall outside of areas identified as environmentally sensitive habitat, particularly for burrowing owls.

Staff also proposed conditions to eliminate Bluff Road, which the developer planned as a major artery for the project, connecting Costa Mesa's Westside to West Coast Highway at 17th Street.

Staff said the project would affect 38 acres of sensitive territory, including areas that sustain vernal pools, native grasses and species such as the burrowing owl, the San Diego fairy shrimp and the California gnatcatcher.

Newport Banning Ranch representatives said staff's recommendation amounted to a denial of the project and was not based on the current conditions of the land.

Michael Mohler, senior project manager for the developer, said staff's plan would allow development on only about 10 acres after buffers for environmentally sensitive habitat and fire safety were taken into consideration. He said the project would not be economically viable if the commission followed the staff recommendation, which he argued constitutes an illegal land grab.

Recent staff data indicating the project would pose a threat to burrowing owl habitat and foraging areas on the site proved to be a major roadblock for the proposal. Newport Banning Ranch officials said the findings were incorrect and based on information provided by project opponents.

Commission staff countered that the information was legitimate, though saying it was inconvenient that it didn't come much earlier in the process.

Interim Executive Director Jack Ainsworth urged commissioners during the hearing Wednesday to be conscious of the significance of the Banning Ranch property, which is said to be the largest undeveloped coastal area in Southern California.

"This is one of the most important decisions we've faced in 40 years," he said.

Newport Beach Councilman Ed Selich, who voted for a larger version of the project when it went before the City Council in 2012, said Thursday that environmentally sensitive habitat seems to be a moving target, with no one really clear about what it is.

"I thought the applicant's plan was a good compromise," Selich said. "At the end of the day, the commission didn't really deny development; they just said the current proposal wasn't a solution that worked for the site."

Late Wednesday, preservationists cheered as they exited the commission meeting after the vote, waving green signs with "Save Banning Ranch" printed in large white letters. Others carried posters depicting various wildlife.

Several said they couldn't believe they had won.

"It's almost impossible to win these kind of victories," Ray said.

Residents of Westside Costa Mesa also were celebrating Thursday, said former Costa Mesa councilwoman Wendy Leece.

"If there's an earthquake in Newport Beach today, it must be Costa Mesans jumping up and down for joy," Leece said. "No one over here wants Bluff Road and the traffic that would come with it."

The Banning Ranch environmental impact report, which studied the larger 1,375-home version of the project in 2011, indicated that the west side of Newport Beach and Costa Mesa would experience traffic congestion at more than seven intersections, including Newport Boulevard and 17th Street; 18th and 19th streets; Newport and Harbor boulevards and Superior Avenue and 17th Street.

Others in Costa Mesa didn't see the Coastal Commission's decision as a victory at all. Instead, some officials said the move will just drag out the fight over the coastal property.

"It's going to come back," said Mayor Pro Tem Jim Righeimer. "Nobody is going to walk away from that piece of land. As far as I'm concerned, I want the 300 acres for the public. Whatever the Coastal Commission and the property owner can agree to, I'm all for it."

 

Banning Ranch chronology

1874:

Phineas Banning buys 4,077 acres of farm and ranch land near the Santa Ana River now known as Banning Ranch for $17,500

1940s:

Oil drilling begins on the Banning Ranch site

Early 1980s:

Property is transferred to Mobil Oil and Santiago Partners Investment Group. Roughly 93 acres are identified as a wetland restoration site.

1997:

Proposal to build 1,750 homes on the property is floated by Mobil, Santiago Partners and Taylor Woodrow Homes but is abandoned in the early 2000s.

1999:

Sierra Club's Banning Ranch task force is formed by Terry Welsh. The group proposes to restore the land to its natural habitat.

2004:

Activists introduce a restoration plan, but property owners say they are still interested in developing the property.

2006:

Voters approve Newport Beach general plan amendments, including a plan for West Newport that prioritizes open space.

2008:

Banning Ranch landowner Newport Banning Ranch LLC unveils a plan for 1,375 homes, a luxury hotel and retail on about 95 acres of the 401-acre property.

2012:

Newport Beach City Council approves the development proposal. Banning Ranch Conservancy sues the city and the developer, alleging the city violated its general plan.

2013:

Orange County Superior Court judge rules partially in favor of the conservancy, agreeing that the city violated its general plan process by not involving California Coastal Commission staff. However, the judge rejects the conservancy's main complaint that the project's environmental review left out key components about possibly sensitive habitats.

March 2015:

Newport Banning Ranch LLC settles with the Coastal Commission to correct unpermitted mowing and drilling operations on the site.

May 2015:

Appellate court finds in favor of Newport Beach on the general plan issue, reversing the Superior Court decision of 2013.

August 2015:

State Supreme Court agrees to review the Banning Ranch Conservancy's petition to reverse the city's approval of the development project. A hearing date has not been set.

October 2015:

Coastal Commission sends Newport Banning Ranch back to the drawing board to scale back the proposed development after staff recommends denial.

November 2015:

Newport Banning Ranch sends the Coastal Commission a smaller version of the project featuring 895 homes, a 75-room hotel, a 20-bed hostel and 45,100 square feet of retail space on about 62 acres.

May 2016:

Coastal Commission staff recommends approval of the Banning Ranch project, but with conditions that would reduce its footprint to about 55 acres. The developer opts to postpone a commission hearing to continue working with the staff.

August 2016:

Commission staff recommends approval of the Banning Ranch proposal, but with conditions that would cut the development area to about 19.7 acres to preserve habitat and foraging space for burrowing owls. Newport Banning Ranch decides to stick with its 62-acre plan.

Sept. 7, 2016:

Coastal Commission votes to deny the Banning Ranch development.

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