Newport Beach improperly approved Banning Ranch project, state Supreme Court rules

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The California Supreme Court ruled unanimously Thursday that Newport Beach improperly approved the proposed 401-acre Banning Ranch development, which would include hundreds of homes and a hotel. The developer says the ruling won’t kill the project. (Allen J. Schaben / Los Angeles Times)

The California Supreme Court decided unanimously Thursday that the city of Newport Beach failed to adequately review a large proposed development on the coastal Banning Ranch oil field before approving it.

The decision, written by Justice Carol A. Corrigan, was another blow for the developers whose project was rejected last year by the California Coastal Commission.

Sam Singer, a spokesman for the developers, said the decision would delay the project by a year or two but would not kill it.

“Newport Banning Ranch is not going away,” Singer said.

He called the ruling “a dramatic change in how coastal projects will have to be analyzed in the future” and defended Newport Beach’s review as thorough.

The 401-acre Banning Ranch is one of the largest parcels of undeveloped coastal property in Southern California. Developers want to build hundreds of houses, a hotel and shops on the property, which is now pockmarked by drilling equipment and hundreds of abandoned wells from decades of oil extraction.

The ruling stemmed from a lawsuit by the Banning Ranch Conservancy, a group that wants to buy the property and keep it as open space. An appeals court in Orange County sided with Newport Beach, and the conservancy appealed the decision to the state Supreme Court.

Thursday’s decision stated that Newport Beach “suppressed” information about environmentally sensitive habitat on the property.

“The public was deprived of a full understanding of the environmental issues raised by the Banning Ranch project proposal,” Corrigan wrote.

The California Coastal Act requires attention to sensitive habitat, but the city’s report did not address it despite “ample evidence” of its existence, the court said.

The failure to discuss the legal requirements for dealing with such habitat and the likely impacts the project would have on it “was neither insubstantial nor merely technical,” the ruling stated.

“The omission resulted in inadequate evaluation of project alternatives and mitigation measures,” Corrigan wrote.

Oil companies have long wanted to develop the property, which has expansive views of the Pacific Ocean.

Part of the land lies within the boundaries of Newport Beach. The city in 2012 approved the construction of 1,375 homes, a 75-room resort hotel and a retail complex atop the bluff portion of the parcel.

But the proposal ran into roadblocks at the Coastal Commission after commission scientists concluded that despite the history of oil production, the land provided valuable and rare wildlife habitat that deserved protection under the state Coastal Act.

In response, the development team — Aera Energy, Cherokee Investment Partners and the real estate company Brooks Street — eliminated hundreds of homes, reduced the footprint of the retail complex and increased the size of a nature preserve that would be open to the public.

But the Coastal Commission staff continued to argue that the development was far too big and environmentally destructive.

In September, coastal commissioners rejected the project. The developers filed a lawsuit, pending in Orange County Superior Court, to overturn the denial.

In the meantime, the Banning Ranch Conservancy case made its way to the state Supreme Court.

The group successfully contended that the city’s review fell short of state environmental requirements.

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UPDATES:

11:25 a.m.: This article was updated with the developer’s response.

The story was originally published at 10:35 a.m.