Headlands Lawsuit Settled

Capping decades of discord and lawsuits, Dana Point officials and a property owner have signed off on a significantly pared-down plan to develop the Headlands, a scenic expanse of pristine coastal bluffs overlooking the ocean.

The development plan settles a 1998 lawsuit between the city and Headlands Reserve LLC that had stalled plans to build homes on one of the last undeveloped oceanfront parcels in Orange County.

The site has expanses of sensitive coastal sage scrub and two nearby marine refuges. With its dramatic views of the coastline, it also overlooks the historic landmark where Richard Henry Dana Jr.--the city’s namesake--came ashore more than a century ago.

The new plan calls for 125 ocean-view lots, a 65-room seaside inn, 40,000 square feet of commercial development and five parks linked by greenbelts and three miles of trails. By contrast, the original Headlands proposal would have placed 375 houses and a 400-room hotel on the land.

Developer Sanford Edward said the custom lots would sell for $1.5 million to $3 million, with buyers spending a couple of million dollars to build a home there.

The City Council approved settlement of the lawsuit Tuesday and will consider the specifics of the development plan after several public hearings starting in October. The proposal also requires approval from the California Coastal Commission. Still, city leaders and the developer expressed optimism Wednesday that the Headlands battle might finally be over.

“I think it’s fundamentally a good plan,” Councilman Wayne Rayfield said. “We have a much smaller number of homes than we had in any of the earlier plans, a relatively small hotel and slightly over half the acreage dedicated to publicly accessible open space.”

About half of the 121-acre parcel would remain as open space under the plan, including a 24-acre conservation park for the endangered Pacific pocket mouse and sage scrub for the threatened coastal California gnatcatcher. The conservation park and other open space, including a sandy beach, a harbor view park, a strand vista park and a hilltop park with 360-degree views, will be conveyed to the public before the first resident moves in.

The open space will include several public meeting places, including a lighthouse, a veterans memorial, a nature center and a cultural center.

The Headlands dispute is one of the most contentious land-use battles in Orange County history. It includes two successful and costly voter referendums in 1994 that rescinded the City Council’s approval of a 400-room hotel, commercial center and 370 homes.

Although the Headlands owner sued, the courts upheld the referendums--but also said that the owner has a right to use the land and that the city must allow some development or be ready to compensate the developer.

In 1998, the council voted on a plan that limited construction to 185 homes on a bluff overlooking the harbor as well as a hotel on the strand area. But because the city’s General Plan allowed for further development, Edward sued the city. The judge ordered the city to consider his plan, forcing Edward and the city back into negotiations that resulted in the settlement announced Wednesday.

Edward agreed to reduce the number of homes but was able to ensure that every lot has an ocean view. The seaside inn is smaller than the one originally planned, but it will likely be an expensive “boutique” resort similar to the Post Ranch Inn in Big Sur.

Edward has spent $6 million in legal fees, and expects to spend $100 million on the project before he sells the first lot. The city has spent more than $1 million on legal fees, but officials said Wednesday they could not calculate a total amount.

If all goes as planned, Edward hopes to start laying infrastructure late next year. The project will likely last the better part of a decade and cost $500 million. But Edward warned that he could press for a much larger development if this new plan isn’t approved.

“I’m looking forward to the day we turn our first shovel of dirt,” he said.

Environmentalists declined comment on the plans for a site that has been called the “crown jewel” of Orange County, saying they had not seen the proposal.

“I don’t know if it will satisfy everybody,” Councilman William L. Ossenmacher said. “But I know the majority of the residents will feel that we struck a very good balance between the community’s rights and property owner’s rights.”

On the streets of Dana Point, where the controversy has been a topic of debate for years, residents said they felt resigned that development would occur.

“I’m sure the Headlands are going to go in some time or another,” said Jim Folk, who just bought a 3,500-square-foot home near the Headlands. “I just hope they control it to the extent that it’s not overbuilt or overcrowded.”

Mark Turpin, an architect in Dana Point, frequently spends his lunch hour at the high point of the Headlands taking in the commanding vista.

“I’m kind of torn,” he said. “I understand the need for growth, but it’s a shame if we build on every square inch of open land, especially land that’s adjacent to the water.”

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Development Plan

The developer of the Dana Point Headlands and the city of Dana Point announced a settlement agreement Wednesday that could end decades of controversy over the fate the 121-acre site, one of the last undeveloped oceanfront parcels in Orange County.