DANA POINT : Developer Sues Over Rejection of Project

A Newport Beach developer is now seeking $12.45 million in damages from the city of Dana Point in a lawsuit alleging that the Planning Commission deprived the company of its property rights by not approving a condominium project.

D.T. Smith Inc. had planned to build condominiums at Niguel Road and Corniche Drive, but the Planning Commission voted 4 to 1 Tuesday night to deny an extension of the county’s original approval of the project. Planning Commissioner Bob Montgomery, who works for Buie Corp., the company that sold D.T. Smith the property, cast the dissenting vote.

The developer purchased the 15.7-acre parcel with a county-approved tract map for 192 condominiums in the late 1980s before Dana Point’s incorporation. More recently, however, the city has failed to honor the project, said a spokesman for D.T. Smith Inc.

The lawsuit against the city was originally filed in December after the company received indications that its project would not be approved. It was amended to add the $12.45 million in damages last week after the city staff recommended to the Planning Commission that the extension be denied.

The developer has appealed this week’s decision to the City Council in hopes it will overturn the vote. Meanwhile, the developer is looking to the courts for help.

“We believe our old map is alive until a judge rules one way or another,” said Donald J. Chambers, a senior vice president of D.T. Smith Inc. “Instead of treating this as a normal extension, the city is treating it as a brand new project subject to new conditions and new rules.”

The city staff contends that the project is too dense and does not conform with the proposed General Plan, which is due for a vote this summer. The project exceeds the number of units per acre allowed under the General Plan.

“The developer can file another project with the city, but we will review it in light of our future General Plan,” said Ed Knight, the city’s director of community development. “We feel the state gives us the right to do that.”