Developer Buys 19,000-Acre Otay Ranch for $150 Million

Times Staff Writer

In the largest San Diego County land deal this century, the Baldwin Co. of Irvine has agreed to pay $150 million for the sprawling Otay Ranch, more than 19,000 pristine acres along the northern rim of Otay Mesa and the southern boundary of Chula Vista.

The purchase by Baldwin--more than a year in the making and which closed escrow Nov. 4--gives the Southern California home builder an unprecedented opportunity to develop “a city in itself” over an area that is more than three times the size of Rancho Bernardo, said Greg Smith, president of Baldwin’s San Diego division.

“It’s an incredibly unique opportunity to do a city,” Smith said Wednesday. “You don’t get those kinds of opportunities or chances in your lifetime. We were really overwhelmed by the opportunity to try and make that kind of contribution and build something from Step 1 with the scope and magnitude of a city.”

The property, sold to Baldwin by United Enterprises, is actually seven separate parcels ranging in size from 10 to 9,138 acres. Surrounding the Otay Lakes, its verdant, undulating hills lie in an unincorporated area of San Diego County and stretch from Interstate 805 on the west to Jamul on the east, from Telegraph Canyon Road on the north to the Otay River on the south.


Granted by Mexican Governor

The area was originally part of the Otay and Janal ranchos granted by Mexican Gov. Jose Maria Echeandia to the Estudillo family in 1829. Even after the United States conquest of California in 1849, the Estudillo family retained rights to the land until it began to sell off parcels beginning in 1873.

Stephen Birch and his United Enterprises land company began buying up the property in 1936.

In all, Otay Ranch covers 21,900 acres, which is used for quarry mining, cattle production and farming. Also on the property is a Federal Aviation Administration Vortac tower, a reservoir, the state prison sewer line and a major electrical power transmission line.


United Enterprises will retain 2,300 acres, leaving Baldwin with the balance of 19,700 acres to plan and build on its own. Maggie Lee, an account representative with First American Title Co., said Wednesday that her research shows the Baldwin purchase to be the largest San Diego County land deal in area since the turn of the century.

Smith said Baldwin began negotiations to buy Otay Ranch more than a year ago, after the home-building company purchased a 1,200-acre piece of the property from United Enterprises for its Salt Creek Ranch development.

Agreed to Incorporate Ideas

During subsequent purchase discussions, Smith said, Baldwin agreed to incorporate in its development some of the ideas that United Enterprises had for its land. Those included a university, civic theaters, libraries and a major municipal gathering place.

Baldwin also intends to build a lake-front vacation resort, Smith said. The preliminary site is a 133-acre parcel that was originally built as a hunting lodge for guests of the Hotel del Coronado, he said.

Preliminary plans for residential development call for up to three dwelling units an acre, Smith said. But Baldwin doesn’t believe construction will begin on any phase of the development for 5 to 10 years, Smith said.

Before that happens, however, public officials have to decide which governmental jurisdiction will take the lead for planning and providing public services.

Otay Ranch is now under the control of the county, which was asked by United Enterprises in January, 1987, to consider changing the zoning to allow for residential development on its western 9,000 acres.


Task Force Formed

Prompted by the size of the request, as well as the unusual nature of Otay Ranch, the county formed a special task force of elected officials and planners from the county, San Diego and Chula Vista to study the request.

The task force recommendations for the area are expected to be forwarded to the county Board of Supervisors in January, said Kaare Kjos, the county planning department’s chief of special projects.

Kjos said there is also a request pending before the Local Agency Formation Commission, a state-mandated agency formed to determine government boundaries, to annex the western part of the area to Chula Vista. That request has been put on hold pending the results of the county task force’s study, he said.

Yet another alternative for Otay Ranch would be to allow Baldwin to incorporate its property as a separate city, Kjos said.