Developers’ Dream for Creation of Lantern Bay Nears Fruition After 2 Decades of Frustration

For developer Chuck Smyth and his brother, it has been a labor of love--marred by two decades of frustration, governmental red tape, courtroom litigation and, literally, heartache.

A heart attack laid Smyth up for much of 1975, and the Mission Viejo builder blames it entirely on the frustrations of dealing with the then-new California Coastal Commission as he sought permission to develop the bluffs overlooking Dana Point Harbor.

The original plan, conceived in 1960 by Smyth and his identical twin, Ed, was to build about 390 homes in the $48,000 price range on 76 acres atop the bluffs, giving homeowners a majestic ocean view.

But only the view survived.

From the start, the development--known as Lantern Bay--was plagued by roadblocks.

The construction of Dana Point Harbor delayed the Smyths’ purchase of the property for 13 years, and then the builders got locked into a nine-year battle with local residents’ groups and the state Coastal Commission.

Over the past 27 years, Chuck Smyth estimates, the twins’ company and its partner, Pacific Mutual Life Insurance Co., have invested $150 million in the Lantern Bay development--which now includes retail stores, two restaurants, two public parks and a soon-to-be completed 350-room resort hotel.

“We will probably realize a very, very small profit,” Smyth said. “Even though I am just extremely proud of Lantern Bay, I don’t know if the torture we were forced to go through was worth it.”

And now that the Smyth Cos. is within months of selling the last of the New England-style dwellings that were eventually built, some business and civic leaders--including some early opponents of the project--credit Lantern Bay with establishing a cohesive identity that may lead to Dana Point’s long-sought establishment as an incorporated city..

Resembling nothing like the moderately priced neighborhood of homes the Smyths had envisioned in 1960, the residential portion of the development is a posh enclave that includes 112 two- and three-bedroom condominiums that start at $349,000, eight three-bedroom homes priced at $519,000, two models of custom-built homes that sold for slightly more than $1 million each, and 45 sites for custom-built estates. The lots have sold for between $400,000 and $1 million.

Construction on the project, which now is 90% sold out, began in 1981, nearly 21 years after Chuck and Ed Smyth first envisioned the bluff-top development.

The first delay lasted 13 years and started in 1960 when--just as the Smyths and Pacific Mutual were negotiating to purchase the property--the county blocked the sale by condemning the parcel in order to use 1 million cubic yards of its dirt to build the 2,500-slip Dana Point Harbor.

By the time the Smyths were allowed to close the deal in 1973, the year the harbor was completed, the sheer bluffs had been graded to a gentle slope that runs down to the marina.

And the price the Smyths and Pacific Mutual paid for the land had increased tremendously.

Just a few months before the sale was completed, California voters approved an initiative that established the regional and state coastal commissions, which were charged with protecting and preserving California’s 1,100-mile coastline.

For Chuck Smyth, the Nov. 8, 1972, election day “is a day that will go down in infamy.”

The Smyth brothers presented the new state commission with their plans for the development three times between 1973 and 1981. On each occasion, after being approved by the regional South Coast Commission, the plans were rejected by the state board.

After the state’s first reversal of the regional commission’s approval, the Smyth brothers challenged the constitutionality of the Coastal Commission and sought damages from the agency.

Court Ruling

In August, 1974, however, the state Supreme Court ruled that the developers could not sue the state agency for damages resulting from a building permit denial. The brothers were ordered to exhaust all administrative remedies before going to court.

That process took the next four years.

And in 1975, Chuck Smyth suffered a heart attack that, he maintains, “was brought on by the unfairness of the Coastal Commission.”.

At the same time the battles with the Coastal Commission were going on, Lantern Bay was facing considerable opposition from local environmentalist and citizens’ groups--although these organizations later supported the project after extensive changes were made in 1978, when the Smyths bowed to local critics and the Coastal Commission.

The concessions included moving the housing to the inland portions of the property and building a pair of public parks, decked out with basketball and tennis courts, restrooms and lighted walkways, on prime acreage on the exterior of the project nearest the ocean.

Extension Built

The developers also agreed to build an extension of Street of the Golden Lantern--then a dead end--that provided a thoroughfare from the harbor to Dana Point’s inland, hillside homes.

The Smyth Cos. received final Coastal Commission approval for the project in 1981 and began construction in November of that year--21 years after they first began planning Lantern Bay.

But with the cost of the construction concessions, the lawsuit expenses and the increased value of the property over time, the price of Lantern Bay housing also rose.

“The Coastal Act created the commission to make the coast more accessible to people other than the elite,” Smyth said. At Lantern Bay, he said, “it’s done just the opposite of what it was supposed to do. Originally we started out to market a product at about $48,000. Our prices now (peak) over $1 million.”

The concessions that added millions of dollars of cost to the project, however, also served as a catalyst for social change among Dana Point’s 18,000 residents and set a precedent for the town’s future developments, civic leaders say.

United Town

For instance, linking the coastal strip with the inland residential areas by extending Street of the Golden Lantern made the town “more of a synergistic community,” said Sue Emery, executive manager of the Dana Point Chamber of Commerce. Before the extension, residents were divided by a “hills versus harbor” attitude, she said.

The street extension united Dana Point “physically and philosophically,” said Judy Curreri, chairwoman of a residents’ group pushing for incorporation.

The restructuring of Street of the Golden Lantern allowed for alleviation of a longstanding traffic crunch on Coast Highway. Southbound traffic was diverted to Del Prado Street through the heart of Dana Point’s commercial district while north-bound vehicles were routed on Coast Highway.

“In my opinion, the Lantern Bay project changed Dana Point for the better,” Curreri said. “Prior to Lantern Bay, what tended to be done were small projects that didn’t have visual impact.”

Curreri said that in 1978, a 15-member town committee, including herself and Chuck Smyth, began the two-year task of forging a specific plan for Dana Point development. Committee members voted to adopt a Cape Cod architectural theme for some commercial zones and the Lantern Bay project was one of the first to conform to the theme.

Voters League

At the time, Curreri was a relative newcomer to the area and had joined the local chapter of the League of Women Voters, unaware that the group was a longtime opponent of the Smyth development.

During the planning committee’s first meeting, Curreri sat next to Smyth and introduced herself as representing the league. At that, Smyth “got up and walked to the other side of the room,” Curreri said.

But since then, Smyth and Curreri have earned one another’s mutual respect. Curreri credits Smyth with being “careful and responsive to what Dana Point wanted. He put a park on the bluff and pulled the houses into the interior. It fits in beautifully, and it is an asset.”

“Once we (the committee members) all started going in the same direction, it was magic,” Smyth said. “It was beautiful to behold.”