Conservancy Makes Deal on Headlands : Property: Option to buy seven acres hinges on passage of two ballot measures that would allow $500-million development on rest of peninsula.

A local conservancy has negotiated a three-year option to buy seven acres of environmentally sensitive property on the landmark Dana Point Headlands peninsula for $6.5 million, it was announced Tuesday.

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The property, near the tip of the 121-acre promontory overlooking Dana Point Harbor, includes coastal sage scrub and habitat for two endangered species, the California gnatcatcher and the Pacific pocket mouse.

The purchase hinges on obtaining funding and passage of two controversial measures on the Nov. 8 ballot asking local voters to approve a $500-million development plan for the remainder of the peninsula. The plan includes a 400-room hotel and a maximum of 370 homes.

If the measures are approved, the deal can go forward and Dana Point residents can retain “the most environmentally sensitive land on the entire property,” said Derith Madden, president of the Dana Point Headlands Conservancy.

“We are very pleased. This was the conservancy’s goal all along,” Madden said. “This is the land everyone in the city has said was the point of the Headlands, the city’s namesake.”

Because of the option, Madden said the conservancy’s board of directors has now endorsed the referendums, Measures C and D, on city ballots.

If both measures fail, the development plan dies and the purchase option is terminated along with it, said Dan Daniels, president of the Newport Beach-based M.H. Sherman Co., one of the property owners. (The property is co-owned by Chandis Securities Co., a firm that oversees the financial holdings of the Chandler family, major stockholders in Times Mirror Co., which publishes the Los Angeles Times.)

“If the measures fail, we have no plan for the land and the option discontinues,” Daniels said.

Foes of Headlands development immediately criticized the purchase plan, calling it “a ploy” to sway voters to support the measures two weeks before the election.

“I think the whole thing is very suspicious,” said Jack Roberts, a member of Save the Headlands, a group fighting the development plan. “The landowner really doesn’t have to do anything. I’m more inclined to say let’s defeat the measures and take it back to square one and start all over again, especially this late in the game.”

The development plan for the Headlands was approved by the Dana Point City Council in April. The plan’s foes, who successfully petitioned city voters to get the referendums on the ballot, say it is too dense and would destroy too much of the Headlands peninsula, one of the last remaining coastal properties in the county.

As the two measures are worded, a “yes” vote upholds the council’s approval of the development and a “no” vote rescinds the council’s action.

Selling the seven acres to the conservancy would eliminate about 20 homes previously designated for the property, Daniels said.

It would also give the city about 32 contiguous acres at the tip of the peninsula that would be designated as open or park space, Daniels said. The proposed plan would deed 25 acres of the bluffs and the land seaward of the conservancy parcel as open space, park space or property for public hiking trails, Daniels said.

Madden said the conservancy has already begun to pursue federal grants to pay for the property. City bond measures are also a possibility, she said.

“This is just the beginning . . . a first step,” Madden said. “Our goal is to acquire as much Headlands land as possible.”