Banning Ranch Credit: Banning Ranch Conservancy

Orange County environmental activists celebrated a major legal victory last week in the decades-long saga of Banning Ranch, a 401-acre property between Newport Beach and Costa Mesa where environmentalists are fighting plans to build a major housing and commercial development.

What’s next?

“That’s what we’re all asking – what’s the developer’s next move?” said Terry Welsh, president of Banning Ranch Conservancy, the group that sued to block the project.

In a unanimous decision, the California Supreme Court ruled Newport Beach improperly approved the Banning Ranch project based on a flawed environmental impact report. If the developer wants to build the project, it will have to redo the entire environmental analysis.

Sam Singer, a spokesman for developer Newport Banning Ranch LLC and the other parties financing the project, said the court decision will have broad implications for developers and add more time to future coastal developments. He said the ruling is a setback but will not kill the project.

“Ultimately the decision delays the project by a year or two, but it does not discourage us,” said Singer.

He said it’s “too soon to tell” what the next steps are but they will continue pursuing a lawsuit against the California Coastal Commission. The developer’s suit alleges when the Coastal Commission rejected the project last year, it violated the owners’ constitutional protections against taking property.

“We intend to pursue [the law suit] with great vigor because we believe we have an exceptionally strong case,” Singer said.

Banning Ranch is an oil field and one of the largest undeveloped coastal properties in Southern California, most of which are protected and cannot be developed. The developer planned to build 900 homes, retail shops, a boutique hotel, and has said it also would spend at least $55 million to restore the rest of the property and open it up to the public as a 329-acre nature park.

Banning Ranch Conservancy wants to buy the property and keep it all as open space. 

Welsh said two years is the minimum time it could take for the project to reboot.

In addition to redoing the environmental impact report, the developer would likely have to come up with a much smaller project that would pass muster with the Coastal Commission.

When the Coastal Commission voted to reject the project last September, it objected to the size of the housing development and pitched a much smaller proposal with 500 homes.

“They could still get a project built on Banning Ranch,” Welsh said. “They would just have to go to square one, do an environmental impact report, and…now because of the ruling, they’d have to approve a project in line with something the Coastal Commission would approve.”

The judges’ ruling concluded the city failed to consider environmentally sensitive habitats in their analysis despite provisions of the Coastal Act that require them to do so. The city argued that analysis was the job of the Coastal Commission.

The court noted the city didn’t take into account several comments from members of the public and Coastal Commission staff about the need for analysis of environmentally sensitive habitats in its report.

Alejandro Camacho, professor of environmental law at the University of California, Irvine, said in a telephone interview the court’s ruling is a reminder of existing law.

“It’s not a groundbreaking opinion,” Camacho said. “It’s reaffirming what the California Environmental Quality Act (CEQA) has been about.”

CEQA requires government agencies to conduct an environmental review that is not only comprehensive but makes an effort to consult the public and other government agencies. The point is to give everyone a full understanding of how a project will affect the environment and ensure the public that those impacts will be taken into account.

Camacho said local governments have an incentive to try to limit the scope of their environmental analysis, or break up a project into segments, to water down environmental impacts and increase the likelihood that a report will find there are no significant impacts.

In the case of the Banning Ranch project, the state Supreme Court concluded the city of Newport Beach “suppressed” information, and as a result, the “public was deprived of a full understanding of the environmental issues.”

A good environmental impact report, Camacho said, doesn’t just treat the process as a cost of doing business.

“It’s supposed to be coordinated with the public,” Camacho said. “A good analysis looks as early and often to the public to try to get meaningful participation.”

Welsh said conservationists need to be well-informed and well-researched.

“You have to have the law on your side and understand what the developer can and can’t do,” Welsh said. “And in many ways this whole process is making sure the developer is following the law.”

They also should be committed for the long run, Welsh said.

“We’re very happy. Not everybody gets to go before the state Supreme Court and win,” Welsh said. “We’re savoring it, but realizing that there’s years ahead of us.”

Contact Thy Vo at or follow her on Twitter @thyanhvo.

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