Revised Plan on Coastal Resort Draws Criticism : Development: The $800-million Headlands hotel and residential project above Dana Point Harbor was downsized. But council resistance continues over open space, gated communities.

An $800-million resort proposed for a bluff top known as the Headlands should offer access to the entire community, limited gated neighborhoods and more open space than now planned, City Council members said Thursday.

In their first public comments on the controversial hotel and residential project overlooking Dana Point Harbor, council members took turns critiquing a plan submitted for the 121-acre site.

“I think, clearly, the public has told us the amount of open space in this project is not adequate,” Councilman William Ossenmacher said. “I think that needs considerable work.”

Mayor Karen Lloreda agreed, adding that the 61.7 acres of open space offered by the landowners not only should be increased but also kept natural.

“We have parks for picnics and kite flying,” Lloreda said. “I’d like to keep the open space as primitive as possible.”

In addition, three of the four council members at the meeting said the number of gated communities should be limited.

“I’m not in favor of gates,” Councilwoman Judy Curreri said. “I think it’s really sad as you come down the coast to look at the number of locked gate communities.”

The proposal was formally submitted May 12, calling for a 400-room hotel and 562 home sites of various sizes. It was presented to the city by the landowners, the Newport Beach-based M.H. Sherman Co. and Chandis Securities Co. Chandis Securities, a firm that oversees the financial holdings of the Chandler family, is a principal stockholder of Times Mirror Co., which publishes the Los Angeles Times.

While this latest plan may call for less intensive development than previous informal proposals calling for two hotels and more than 800 residences, the community--not just the politicians--had a strong reaction.

“I think (the developer) has made some improvements and some progress, but I think it’s a long way from being as good as it ought to be,” said Forrest Owen, an 18-year resident of Dana Point and a city traffic commissioner. “I would suggest increasing the open space and decreasing the bulk of the residential units by either decreasing their number or their size.”

Maya Dunne, a six-year resident of Niguel Beach Terrace, a development next to the Headlands property, said she had hoped to see some affordable housing and some civic facilities included in the plan.

“I’m disappointed that there isn’t some affordable units,” said Dunne, a planner for the city of Los Angeles and former principal planner for the city of Irvine. “I also don’t see much in civic facilities and public open space in the project. I’m also disappointed in the size of the hotel, which I think is unrealistic, both in terms of getting it built and keeping vacancy rates low in this economic climate.”

Dunne called for local residents to read the project’s environmental impact report and respond to it in writing.

Chris Venner, general manager of the Dana Point Resort, a 340-room hotel overlooking the city harbor, said he was surprised at the size of the proposed hotel.

“I think the size is a little bigger than it needs to be,” Venner said. “For a small community, we have a lot of hotels. On the positive side, they bring jobs and taxes to the city, but on the negative side, just the amounts of people bring problems of traffic and access.”

Venner acknowledged that another hotel would be a competitor for the Dana Point Resort, but he sees troubles getting financing for such a project. Perhaps in 18 to 24 months, when the project is ready to break ground, the economy might be better, he said.

“Any hotel is a competitor, no matter where you put it in town,” he said. “The occupancy rates now up and down the coast are substantially depressed, but a couple of years from now, who knows.”

The project will have to be approved by the city and the California Coastal Commission before construction can begin.

Headlands Point Resort

A luxury hotel and as many as 562 homes are the primary components of a plan for a 121-acre promontory overlooking Dana Point Harbor known as the Headlands. Public hiking and bicycle trails will link the neighborhoods. The $800-million resort plan must be approved by the city and the California Coastal Commission.