Headlands’ Owners Appeal Ruling Barring Development : Litigation: They hope to overturn decision upholding voter-approved measures to block Dana Point project.

The owners of the Dana Point Headlands, a 121-acre bluff-top parcel near Dana Point Harbor, have appealed a Superior Court judge’s ruling that blocked a controversial $500-million resort development proposed for the site.

Dan T. Daniels, president of Newport Beach-based M.H. Sherman Co., one of two Headlands owners, is hoping to overturn Judge Marvin G. Weeks’ April ruling that upheld a pair of voter-approved measures preventing the resort development. The two referendums--called Measure C and Measure D--were approved by voters last November.

“We disagree with the Superior Court ruling, and we are asking the [4th District] Court of Appeal to review that conclusion,” Daniels said.

The decades-long controversy over development of the Headlands heated up in April, 1994, when the Dana Point City Council approved a plan that would have allowed a 400-room hotel and a maximum of 370 homes on the site.

Opponents of the plan, arguing that the development was too large, launched a petition drive to put the two measures on the ballot that would either approve or reject the council’s action.

A month after voters rejected the project, the landowners sued, contending that voters had violated private property rights by preventing them from building on their land. Weeks ruled that the lawsuit had no merit.

Kenneth Rozell, Dana Point’s assistant city attorney, said that the appeals process usually takes 12 to 18 months.

The council this week voted to support a new study on development of the Headlands by the Dana Point Headlands Conservancy, a nonprofit local environmental group.

The Headlands’ other landowner is Chandis Securities, a Pasadena firm that oversees the financial holdings of the Chandler family. Chandis Securities is a major stockholder of Times Mirror Co., publisher of the Los Angeles Times.