Mobil Drops Daley Ranch Plans : Oil Company Cites Cost in Canceling Escondido Project

The Mobil Land Development Corp. announced Thursday that it has dropped plans to develop Daley Ranch into a 3,200-home, 3,000-acre master planned community.

Raymond Keslake, president of a Mobil subsidiary, Rancho Escondido Inc., said the corporate office in New York did not want to spend several million dollars on the project because of economic uncertainties within the oil industry.

But Keslake and city officials say the huge project--it would be Escondido’s largest residential development--is not necessarily dead because another developer may purchase Mobil’s plans and proceed on its own. Mobil has worked on the plans for four years.

Meanwhile, most of the land in the project, on the north side of the city, will revert to the Daley Corp., a large, family-owned construction company which owned the property and had entered into the agreement with Mobil to develop it.

Daley officials could not be reached for comment Thursday afternoon.

Mobil initiated the project in 1981 and finally won the approval of the Escondido City Council last October, by a 3-to-2 vote. Before that vote, the area was zoned to accommodate only about 500 homes.

Critics of the development said the influx of more than 3,000 families in the rural part of town would clog feeder streets leading to the neighborhood and strain city services, especially since the project area is outside existing service areas for police, fire, water and sewage.

But proponents argued that the property--rolling hills north of Lake Dixon--is prime residential acreage that will inevitably be approved for development, and that Mobil’s plans were responsible.

The project’s size accounts for 20% of the city’s entire area, while the neighborhood’s population would have boosted the city’s overall population by 12% in 20 years.

Ground breaking was to have occurred next year, with the first residential lots going on sale in 1987. Mobil planned to develop the property and sell the improved lots to merchant builders who would build the houses.

Keslake said Thursday that, while the company had purchased outright about 775 acres of land in the project area, it decided in recent days not to exercise the option to purchase the additional 2,270 acres necessary to complete the development.

“The decision was a financial one,” Keslake said. “After looking at the overall budget requirements of the project--several million dollars--the company felt that given today’s economic climate within the oil industry, it was not prepared to make that kind of commitment.”

City officials were told of the decision Thursday.

Councilman Jerry Harmon, who opposed the project at the outset because of its size, said he was surprised that Mobil was walking away from the project since “they got the City Council to give them a goose that was going to lay the golden eggs” by increasing the property’s density nearly tenfold.

“Whether or not the project will ever be built remains to be seen, and I hope it is not,” Harmon said. “But I suspect the council majority won’t do anything to change the plans they have already given to Mobil.”

Keslake said he and Daley Corp. executives have discussed the possibility of Daley purchasing the plans prepared to date by Mobil, so that the project can move forward under a different developer.

“It definitely remains an opportunity for someone,” he said.

It was unclear what the company would do with the 775 acres it still owns, he said.