The Orange County Vote : Headlands Slate Leads in Dana Point : Development: The $500-million hotel resort and 370-homes project has played a big part in the city election.

Three candidates who support a controversial $500-million resort development for the Headlands jumped to the lead Tuesday night in early results for the Dana Point City Council race.

After absentee ballots were totaled, Harold R. Kaufman, Bill Shepherd and incumbent Councilwoman Karen Lloreda were ahead of Ernest A. Nelson and Toni Gallagher, two anti-Headlands plan candidates who trailed in fourth and fifth place, respectively.

However, nobody was claiming victory yet.

“I love those numbers, but I’m not going to get excited yet,” said Lloreda, a Capistrano Beach resident seeking her second term on the council.

Robert Wilberg, an anti-Headlands candidate, said the absentee ballots were distributed by a pro-development Chamber of Commerce. “I still feel good about my chances,” he said.

In the weeks before the election, in which the Headlands was the key issue, most local political observers had predicted a close race. But with 12 candidates--the most since 26 people ran in 1988--vying for three open seats on the five-member council, there was no confident forecast about who would win.

Some argued that gender would play a role and that a woman definitely would be chosen, although only two of the candidates are women. Others suggested that anti-incumbent fervor among the voters in this coastal city of 34,000 would hurt Councilwoman Lloreda and possibly the candidates who joined her on a pro-Headlands slate, Kaufman and Shepherd.

Still others suggested that voters would elect independent candidates and reject the six candidates supported by the two main political action committees in Dana Point.

Most observers also agreed that the development plan for the Dana Point Headlands was a key campaign issue.

Opponents of the City Council-approved Headlands plan, which calls for a 400-room hotel and 370 homes on the privately owned 121-acre peninsula, launched a heated petition drive in April to force a special referendum on the development. The council last month scheduled the Headlands election for November, but the debate over the plan spilled into the council race.

Supporters of the plan say the project will generate important revenue for the city, while its foes say it is too massive for the prominent peninsula. “I don’t think there is any doubt that the Headlands is the No. 1 issue,” said Joanna Paoli, a local activist.

Three local political action committees clashed over the Headlands issue.

Two of the groups--Dana Point United and Concerned Taxpayers of Dana Point--backed the slate of candidates who support the Headlands plan: Lloreda, Kaufman and Shepherd. The other group, Hometown Dana Point, is opposed to the plan and backed a slate composed of Nelson, Gallagher and Wilberg.