CA Supreme Court Deals Blow to Banning Ranch Development

Aerial view(looking north with Pacific Coast Hwy to the left of frame) of the undeveloped 402–acre parcel known as Banning Ranch
Aerial view(looking north with Pacific Coast Hwy to the left of frame) of the undeveloped 402–acre parcel known as Banning Ranch includes wetlands, an oil production field and a bluff top that could provide future homes with spectacular ocean views. | Photo by Don Kelsen/Los Angeles Times via Getty Images

State Supreme Court justices Thursday ruled that Newport Beach did not do an adequate environmental review of the proposed development of Banning Ranch, one of the largest open private spots of coastal property in Southern California.

The developer said the ruling may delay the project for up to a couple of years and complained it would make it tougher to improve coastal property going forward.

City officials, meanwhile, say they believe they made a thorough review of the property before approving a permit to build the mixed-use project, rejected by the California Coastal Commission, a ruling that is being challenged by the developer's lawsuit in state court.

Newport Beach officials said they shied away from "speculation" about the environmentally sensitive habitat areas of the project, leaving it to the coastal commission to identify them since that agency has the final say anyway.

The state's high court, however, said the law requires such environmental speculation on the sensitive habitat areas on a project's impact because it's important for the public to see how city officials may agree or disagree with the commission's staff.

"The city correctly points out that the ultimate findings regarding (the environmental sensitive habitat areas) on Banning Ranch will be made by the California Coastal Commissioners themselves, not commission staff," the high court said in the ruling. "But the commissioners and interested members of the public are entitled to understand the disagreements between commission staff and the city on the subject of the (environmental sensitive habitat areas).'.. Rather than sweep disagreements under the rug, the city must fairly present them in the (environmental impact report). It is then free to explain why it declined to accept commission staff suggestions."

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The high court faulted the city for not providing a "detailed biological analysis of project impacts, which may have been adequate were Banning Ranch not in the coastal zone."

The high court also commented that the city's "handling of the Banning Ranch (environmental impact report) not only conflicted with its (California Environmental Quality Act) obligations, but also ignored the practical reality that the project must ultimately pass muster under the Coastal Act... The public was deprived of a full understanding of the environmental issues raised by the Banning Ranch project proposal."

City officials said their environmental impact report was "well over 600 pages of detailed analysis of biological resources present at the site and a comprehensive analysis of wetlands, special-status species and critical habitat."

Newport Beach officials say "there is a longstanding rule under CEQA that environmental analyses should not engage in speculation. This is a commonsense rule intended to result in accurate environmental analysis."

The commission's review of the project will make "it much easier to comply with the guidance provided by the California Supreme Court today," city officials said in a statement.

"Currently, the city does not know the intent of the project proponents for the property -- however, any future action by the city related to the site will be conducted at an open and public meeting with ample opportunities for public participation," City Manager Dave Kiff said.

The developers believe the ruling "may cause a delay of a year or two for our project, but Newport Banning Ranch is not going away," the project's developers said in a statement.

"The property owners are committed to keeping 80 percent of the 400 acres as permanent open space and developing the remaining acreage with limited housing, a boutique hotel, neighborhood-serving commercial and an environmental and Native American educational center," according to the statement.

The ruling presents a "dramatic change in how coastal projects will have to be analyzed in the future under CEQA," according to the developers.

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