Headlands Co-Owner Sells to Developer

In a move that could shrink the proposed Dana Point Headlands development, a co-owner of the 122-acre property said Tuesday it has sold its interest to a Newport Beach developer.

Chandis Acquisitions Corp., a wholly owned subsidiary of Times Mirror Co., publisher of the Los Angeles Times, sold its 50% interest to Master Plan Development Inc. Terms of the deal were not disclosed but real estate sources estimated the value of the entire property at $60 million to $70 million.

The parcel is one of the last remaining undeveloped coastal properties in Orange County and has been the focus of a bitter battle between environmentalists and the developers for more than two decades. Chandis and M.H. Sherman Co. had shared ownership of the property for more than 50 years.

Sanford Edward, president of Master Plan, said the company is considering at least two major changes to the project: downsizing a 150-room hotel and dedicating most of the acreage earmarked for open space to the city.

“We’re not even sure we’d like to see a hotel on the site,” Edward said, saying he will explore erecting a 75- to 100-room spa resort.

Nearly all of the 70 acres of open space in the city’s proposal would be private property. The city’s plan also calls for 185 homes, in addition to the hotel.

The prospect of a smaller project drew immediate praise from at least one local activist.

“If he is going to downsize, that would be a benefit to the city,” said Geoffrey Lachner, chairman for the Committee to Save the Headlands, a group that promoted two successful anti-development referendums to protect the Headlands.

He said that relations between the city and the developers have improved and that officials are listening to residents’ concerns about the project.

Master Plan Developments was established nearly eight years ago, Edward said. The company has built low-income housing in Riverside County and is currently building on 40 custom lots on 120 acres in Thousand Oaks.

Master Plan will spend the next 30 days “going in and really looking at what the community wants,” he said.

The Headlands dispute, which goes back decades, included approval by the City Council in 1994 of a plan for a 400-room hotel, a commercial center and up to 370 homes. But that sparked the two successful referendums to rescind the council’s vote.

The two landowners then sued the city, claiming that the referendums were unconstitutional because the owners had been prevented from developing their property.

A Superior Court judge upheld the two referendums, and his decision was upheld by an appellate court. In April 1997, the state Supreme Court let the ruling stand.

The city is developing a specific plan that must be heard by the Planning Commission and then the City Council. It then goes before the state Coastal Commission.