Dana Point Approves Headlands Resort Plan : Land: More hurdles to $500-million bluff development remain. Environmentalists say they’ll continue to fight.

A controversial $500-million resort plan that would bring a luxury hotel, two commercial centers and 370 homes to one of the last undeveloped coastal sites in Orange County was approved Tuesday night by the City Council.

With little discussion, the council voted 4 to 1 to end nearly three years of negotiations and rancorous debate. The battle has pitted environmentalists who regard the 121-acre bluff above Dana Point Harbor as a protected natural resource against the private landowner and the project’s proponents, who insist it will provide important revenue for the young city.

Mayor Judy Curreri called the plan a compromise in which “no one got 100% of what they started out wanting. There will be more refinements. . . . But for the first phase, I think we really hammered out a fair plan.”

For environmentalists, the bluff-top parcel known locally as the Dana Point Headlands has become a symbol of an ongoing fight against overdevelopment throughout south Orange County. The property is known to be the home of the California gnatcatcher, the cactus wren and the Pacific pocket mouse, which until recently was thought to be extinct.

“This is one of the last open spots along our coast,” said Ken Fortune, a San Clemente plumber and a director of the South Coast Audubon Society. “We have relatively few spots left any more where you can enjoy Mother Nature and recharge your soul.”

Ed Gallagher, a volunteer for a grass-roots group called Save the Headlands, said Tuesday that a movement would be launched immediately to overturn the council’s decision.

“It has been a foregone conclusion they would slam-dunk this vote, and it’s a foregone conclusion there will be a referendum,” said Gallagher, one of the few people who already live on the bluff. “I’m very optimistic the citizens can win after all.”

Despite the council vote, several more hurdles remain before any construction may begin. The California Coastal Commission, the state Department of Fish and Game and the U.S. Wildlife Service are among the agencies that also must approve the plans.

On Feb. 1, the U.S. Fish and Wildlife Service placed the Pacific pocket mouse temporarily on the emergency endangered species list. If the mouse is later listed permanently as endangered, a future developer must convince the agency that construction would not further harm the species.

“I don’t see how anyone could do anything in the next three years,” Daniels said, adding that once the plan is fully approved, it would be sold to a developer who would have to bring final tract maps back to the city. The current development plan is only the latest of several resorts proposed throughout the years for the bluff first noted in 1835 by author Richard Henry Dana in his book, “Two Years Before the Mast.” Resort developers in the 1920s combined the author’s surname and the peninsula he admired and named the community Dana Point.

By the late 1940s the property had been acquired by Los Angeles developer M.H. Sherman--known for Sherman Oaks--and what is now called the Chandis Securities Co. (The company, which oversees the financial holdings of the Chandler family, is a principal stockholder of Times Mirror Co., which publishes the Los Angeles Times.)

Dan T. Daniels, the president of the M.H. Sherman Co., said his company has downscaled the plan to meet the wishes of the city residents. Permanent open space has been increased to 64.8 acres or 53% of the entire parcel, the residential density has been decreased by 29% and more parks and trails have been added to the plan.

“I don’t think anyone can look at this plan and not think the public process has worked,” said Daniels, a resident of nearby Laguna Beach’s Three Arch Bay.

Ultimately, the approval of the plan came down to the argument that it will be a financial boon to the city in the long term, said Councilman Mike Eggers, who has been an unabashed supporter since it was presented to the council in September, 1991.

Eggers said the city desperately needs the revenue from the planned 400-room hotel and 150,000 square feet of commercial space, expected to generate $2.3 million annually to city coffers.

“This city has the potential for literally hitting the wall financially,” Eggers said. “If we don’t do something to ensure our economic viability, Dana Point will be walking hand-in-hand with San Clemente toward bankruptcy.”

But Councilman William L. Ossenmacher, who cast the only vote against the project, said the development won’t bring revenue to the city any time soon.

“Any financial benefits that are realized would come from the hotel complex,” which could be five to 10 years away from construction, Ossenmacher said earlier Tuesday.

“I don’t think the council vote reflects the opinion and majority of the public,” he told the council. “But I would have liked to see it proven by putting the plan on the ballot.”

Hurdles for Dana Point Headlands

A proposed development of the Dana Point Headlands includes a 400-room luxury hotel, two retail centers and a maximum of 370 homes along the 121-acre bluff-top above Dana Point Harbor. It must clear several hurdles before construction can begin.

What’s Next

1. City Council must approve development agreement. First hearing: Tuesday.

2. California Coastal Commission must review and approve the plan. Earliest date for a vote is late this year.

3. U.S. Fish and Wildlife Service and California Department of Fish and Game must also give approval before building can begin.

At Home in the Headlands

Plants: At least 120 species of plants, 16 of which are not commonly found elsewhere in Orange County.

Birds: Two species of rare birds--California gnatcatcher and cactus wren.

History: The Headlands were an important lookout point for early California Native Americans. In the early 1800s, the cliffs were used as cattle-grazing land by the Spaniards who founded Mission San Juan Capistrano.

Hilltop Park: 7.1 acres

Blufftop Park: 10.9 acres

Dana Strand Coastal Park: 6.5 acres

Dana Strand Beach: 4.8 acres

Bluffs

New residential*

Existing residential

Recreation/open space

* New residential areas will have 10% open space

Researched by LEN HALL / Los Angeles Times