Headlands Project to Go on Ballot : Development: Dana Point council orders referendum as part of November election on proposal for a hotel, commercial centers and up to 370 homes.

Forced by a petition drive, the City Council on Tuesday voted to place the Headlands project, one of the most controversial developments ever proposed in South County, before city voters in November.

“I’m glad the community will finally have a say in this plan,” said City Councilman William L. Ossenmacher. “That’s the best thing that could happen. Those of us who believe in representative government and democracy will be glad, whatever the results are.”

The unanimous council action means city voters on Nov. 8 will decide the fate of the Dana Point Headlands. The council’s only option was to rescind its April 5 vote approving the Headlands plan.

For the past three years the plan has been the focus of an increasingly bitter local debate that will play a major role in next month’s council election and continue until the November vote. The plan allows the landowners to build a 400-room hotel, two commercial centers and a maximum of 370 homes on the 121-acre Headlands peninsula near Dana Point Harbor, one of the county’s last undeveloped coastal properties.

Opponents of the development have insisted that the Headlands is a local landmark and that most of it should be preserved as a natural resource. Proponents say the city needs the revenue that development could provide.

Immediately after the council approved the plan in April by a 4-1 vote, a grass-roots group circulated petitions demanding a local referendum. In 15 days, the group managed to get 2,346 verified signatures, well over the 1,912 required to force the council to reconsider its vote.

The successful petition drive caused immediate suspension of the plan and a detailed development agreement, pending further council action.

Council members had a choice of calling a special election or putting the Headlands referendum on the November ballot. The petition came too late to qualify for the council election on June 7, according to City Clerk Sharon L. Waits.

Council members chose November because the estimated $16,700 cost is about half that of a special election. They also said the expected 60% voter turnout in November would provide a better survey of local opinion on the Headlands plan than a special election, which generally draws fewer voters.

Councilman Mike Eggers, one of the Headlands plan’s most vocal supporters, said he thinks the voters ultimately will support the plan.

“Those 2,246 signatures in no way represent a mandate of the voters,” Eggers said.

Under state election law, if the plan is rejected, the council could wait a year and approve it again, Waits said.

Since the 1940s the Headlands 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.