The proposed lease of an 11.36-acre site in Newport Beach is gaining the attention of local environmental groups, who are claiming an Orange County school district violated state law during the search for developers.
The Newport-Mesa Unified School District put out a call for bidders in January, looking for a group to enter a long-term ground lease to develop the site — a move district officials say is allowed under state law.
The property is surrounded on three sides by the nearly 400-acre Randall Preserve, formerly known as Banning Ranch, which was acquired by a set of environmental groups in 2022 to preserve the open space.
[Read: Banning Ranch Officially Preserved as Open Space and Future Public Park]
The school district’s bid for proposals mentions creating workforce housing for district employees, but proposals do not have to be exclusively for that use.
None of the Newport-Mesa school board members replied to requests for comment for this story.
Is the Property Subject to the Surplus Land Act?
The Coastal Corridor Alliance — formerly known as the Banning Ranch Conservancy — is raising concerns over the proposed lease process sidestepping state law.
The group was one of the main organizations working to purchase Banning Ranch, the land surrounding the school district property, from private owners to create a public park and protect open space. That price tag was nearly $100 million.
Melanie Schlotterbeck, a consultant for the Coastal Corridor Alliance (CCA), said the organization has been working with some of the bidders for the Newport-Mesa property and noticed the district is not following guidelines laid out in the Surplus Land Act.
State law requires public agencies to prioritize affordable housing, parks and open space when selling or leasing surplus land.
That means agencies are supposed to notify certain groups about the land before it gets opened up for a public bidding process.
Schlotterbeck said the Newport-Mesa school district never notified the Mountains Recreation and Conservation Authority (MRCA) about the land availability, as required by the Surplus Land Act.
The Mountains Recreation and Conservation Authority is also the titleholder for the nearby Randall Preserve.
“In this instance as a public park agency that owns the land surrounding the surplus property on three sides, the MRCA requests that it be provided notice of the availability of this land and allowed to engage in good faith negotiations as required by the Act,” reads a letter MCRA sent to the school district.
“At this time, the MRCA has no record of any notice provided to date.”
In an addendum included with the Request for Proposals (RFP), district officials claim the property is exempt surplus land.
“The District’s property qualifies as ‘exempt surplus land’ under the Surplus Lands Act because it followed Education Code procedures, including forming an Advisory Committee, and is therefore not subject to the Act’s usual notification requirements,” school district spokesperson Annette Franco wrote in an email.
“While the Surplus Lands Act applies, NMUSD has not identified any interested parties, potential uses for the property, or even what amount of acreage may be developable, nor has it decided whether to pursue a ground lease or other disposition.”
But that’s not how the Coastal Corridor Alliance sees it.
Schlotterbeck said the Alliance’s attorneys conducted an analysis and found the school district property is subject to the Surplus Land Act.
“Based on the publicly available facts regarding the District’s disposition of the Property, none of these exemptions apply,” reads the legal analysis. “Even if the District were to claim that an exemption applies, the Act requires it to make written findings supporting the exemption and publish those findings publicly.”
“Executing a lease of the Property without first complying with the Act’s notice and negotiation requirements would violate the Act, opening the District to financial penalties.”
More Concerns Surrounding Sensitive Habitats
Schlotterbeck also shared concerns regarding sensitive habitat areas and which sections of the 11-acre plot are actually viable for development.
The Coastal Corridor Alliance conducted an analysis on the site to find which portions couldn’t be developed due to the presence of certain species.
Since the property is located within the Coastal Zone, it’s subject to the Coastal Act requirements for Environmentally Sensitive Habitat Areas (ESHA).
The Coastal Act prohibits significant disruption of certain habitats due to rare or valuable species and requires buffer zones when developing near these areas — typically about 100 feet on all sides.
Due to the presence of the California gnatcatcher bird, burrowing owls, vernal pools and San Diego fairy shrimp — the Coastal Corridor Alliance found that only about one acre of land on the site is developable.
But Schlotterbeck said that isn’t being advertised to bidders.
“If they are asking bidders to provide development plans for those 11 acres, and they’re not providing them with those constraints, they are setting themselves up for an outcome that is not fully informed,” she said.
The case law for these buffer zones is rooted in a lawsuit that appeared before the California Supreme Court in 2017. The lawsuit was spearheaded by the Alliance back when they were still called the Banning Ranch Conservancy.
“Literally, our organization set the case law that everybody else now has to look at ESHA,” Schlotterbeck said in a phone interview.
“It’s mind-blowing to me that the organization that set the case law is still trying to require folks be realistic about what’s developable in the Coastal Zone — and folks aren’t following the rules.”
In response to bidder questions about sensitive habitat areas, school district representatives mentioned the need for potential buffer zones but did not offer specifics on developable land under the Coastal Act.
“No formal ‘development envelope’ has been mapped or approved that would definitively set aside where future development could occur,” reads a response included with the RFP information.
“Any future development proposal on the site will likely require new or amended coastal development permitting, at which time ESHA constraints, wetland boundaries, and the results of ongoing mitigation would be re-evaluated to determine allowable development areas.”
The lease bid is still open until the deadline on May 16, 2025.
“I’m simply calling out the fact that what we are witnessing from the sidelines does not feel like a process that is being followed appropriately,” Schlotterbeck said. “It’s not fair, it’s not transparent, it’s not inclusive and it’s not accessible.”
Franco said the school district may still notify groups like MRCA about the property availability.
“Should NMUSD decide it is in interested in any disposition of the property, or portion thereof, it will either issue a Notice of Availability or make an exempt surplus land finding and issue a Notice of Exemption, in accordance with applicable law,” she said.
Angelina Hicks is the Voice of OC Collegiate News Service Editor. Contact her at ahicks@voiceofoc.org or on Twitter @angelinahicks13.