Future of Dana Point Development in Doubt : Government: Opponents of Headlands resort plan win approval for citywide referendum. Council backing is suspended.

A $500-million resort plan for the Headlands in Dana Point was placed in jeopardy Monday when the county registrar of voters approved a petition calling for a citywide referendum on the development.

City Atty. Jerry Patterson said the action forces the City Council to either rescind last month’s approval of the project or put it up for a vote.

“I suppose the council could refuse to act, but I think that is very unlikely,” Patterson said. The council must make that decision at its May 24 meeting, Patterson said.

In the meantime, the council’s 4-1 approval of the plan is suspended, meaning that it and a detailed development agreement, are “inoperative, unenforceable,” Patterson said.

The Headlands plan, as approved by the council April 5, entitles the landowner to build a 400-room hotel, two commercial centers and 370 homes on the 121-acre peninsula. On April 26, the council approved the development agreement that binds the city to details of the plan for at least 10 years.

Members of the local group that collected more than 3,800 signatures over 15 days last month were jubilant. Most of the plan’s opponents are seeking to preserve more of the peninsula as a natural resource while also arguing that the project allows too much residential density.

“I’m elated,” said Jack Roberts, a Dana Point real estate broker who has been one of the leaders of a coalition of local groups attempting to downscale the plan. “I’m glad we’re going to get a chance to vote on this. A lot of people think (the plan) is too massive.”

The plan’s proponents, including the city’s Chamber of Commerce, insist it will be a financial boon to the city, which relies on hotel taxes for about one-third of its $13-million annual budget.

City Councilwoman Eileen Krause, a project supporter, said she welcomes a vote on the plan if that’s what people want.

“I have absolutely no intention of rescinding it,” Krause said. “I think this is a super opportunity to finally see who represents what around here. I think the council has represented the majority of the citizens . . . and I think the public will ultimately support it.”

Since the 1940s, the Headlands property has been owned by the M.H. Sherman Co. and Chandis Securities Co. Chandis Securities, a firm that oversees the financial holdings of the Chandler family, is a major stockholder in Times Mirror Co., which publishes the Los Angeles Times.

“The plan has been supported by the city Planning Commission and the City Council after many hours of public review,” said Dan T. Daniels, president of Newport Beach-based M.H. Sherman Co. “I would hope the citizens would follow the lead of their elected and appointed representatives.”

City Clerk Sharon L. Waits said the council has three options if it chooses to put the plan up to a vote--call a special election, put the vote on the November general election ballot or wait until the city election in June, 1996.

The petition was submitted too late to qualify for the next City Council election on June 7, Waits said.

Voters would be asked to either approve or reject the Headlands plan.

Krause said she would prefer the election be held in November because it’s less costly and voter turnout is likely to be better. A special election costs the city about $35,000, compared with the $15,000 cost of adding a city vote to a general election, according to city officials.

“I think you get a broader input during a November election,” Krause said.

To qualify, the petitioners had to collect at least 1,912 signatures of registered voters, a figure that represents 10% of the city’s registered voters, Waits said.

The petitioners turned in two petitions on May 4 that each contained 3,800 signatures.