Banning Ranch developer sues over Coastal Commission’s rejection of project

Banning Ranch

Banning Ranch in Newport Beach in July. The ranch’s developers sued state officials Friday over the Coastal  Commission’s denial of development plans for the area.

(Drew A. Kelley )

The developer of Banning Ranch filed a lawsuit in Orange County Superior Court on Friday challenging state officials’ denial of a development project in coastal Newport Beach that included hundreds of homes and a hotel.

Newport Banning Ranch LLC’s suit, which is also requesting monetary damages of at least $490 million, comes nearly two months after the 12-member California Coastal Commission denied the company’s plan to build 895 homes, a 75-room hotel, 20-bed hostel and 45,100 square feet of retail space on 62 of 401 open acres in West Newport.

During their meeting on the project Sept. 7, to explain their decision the commissioners cited a lack of cohesion between Newport Banning Ranch and commission staff members, who had recommended the project be reduced by about one-third.

In addition to the monetary damages, Newport Banning Ranch’s suit is asking the court to overturn the Coastal Commission’s decision.


“There were an extraordinary and unprecedented amount of procedural errors, misinformation and errors in fact that did not provide the opportunity for a balanced decision that considered all the facts,” Michael Mohler, senior project manager, said in a statement.

Coastal Commission representatives could not be reached for comment Friday afternoon.

The lawsuit points to commission staff’s designation of 64 acres for burrowing owl habitat, a decision Newport Banning Ranch believes eliminated the majority of the project’s available land for development and made the project financially unfeasible.

Burrowing owl

A burrowing owl was displayed during a Coastal Commission discussion Sept. 7 of the Banning Ranch development project. Commission staff designated 64 acres for burrowing owl habitat, a decision Newport Banning Ranch contends eliminated the majority of the project’s available land for development and made the project financially unfeasible

(Don Leach / Daily Pilot)


The case also alleges that commission staff failed to inform the commissioners about biological surveys on the Banning Ranch property indicating that, in most years, burrowing owls haven’t used the land to breed and, in fact, only one owl actually forages there.

Mohler said the decision to designate additional acreage for the owls was “based on inapplicable assumptions by a zoologist working with the project opponents who admitted to the inaccuracies during the hearing, and a lack of expertise by staff.”

The lawsuit equates the commission’s denial to an illegal taking of private property without compensation and a violation of the developer’s 5th and 14th amendments.

The suit marks another turn in the long fight over the future of the Banning Ranch property, which for decades has been fenced off and consumed by oil drilling operations.

As part of its proposal, Newport Banning Ranch set aside about 329 acres as preserved, natural open space with about seven miles of public trails. Despite that, environmentalists maintained their strong opposition to any development on the site.

The Coastal Commission first considered a larger, city-approved project for Banning Ranch in October 2015. After an eight-hour hearing, the commission sent Newport Banning Ranch back to the drawing board to make significant cuts to the project’s footprint and scope.

Commissioners and staff suggested at the time that they likely would favor “less intense” development.


In May, staff recommended approval of the smaller version of the development with a series of conditions to further reduce its footprint, but Newport Banning Ranch opted to postpone a hearing before the commission, arguing that some issues remained unresolved and that it needed more time to review the staff’s recommendations.

At the time, commission staff identified about 55 acres within Banning Ranch as having potential for development.

Staff’s latest reduction in the recommended buildable area boiled down to creating a foraging area for burrowing owls, which they said have been present at Banning Ranch for decades.

In a report released in late August, staff indicated it would sign off on developing only about 19.7 acres outside of areas identified as environmentally sensitive habitat, particularly for burrowing owls.

Newport Banning Ranch representatives then responded that commission staff’s recommendation amounted to a denial of the project and was not based on the current conditions of the land, which was degraded after some 70 years of oil drilling.

Twitter: @HannahFryTCN