Court Orders Negotiations on Headlands

A state appeals court has ordered the city and the owners of the Dana Point Headlands to resolve their differences out of court and come up with a mutually acceptable development plan for the 121-acre promontory.

The two parties have until July 8 to present a preliminary plan, City Atty. Jerry Patterson said Wednesday.

“The court admonished the developer for not coming up with a new plan with less density,” Patterson said. “And it admonished the city for not coming up with a specific zoning plan on its own.”

If full agreement is not reached by the deadline, city officials said, the court could grant more time for negotiations or could declare an impasse. If an impasse is declared, the court will issue a ruling within 60 days, Patterson said.

The owners of the headlands--Chandis Securities Inc. and M.H. Sherman Co.--filed a lawsuit against the city in December 1994 seeking to overturn a voter-approved referendum that blocked the companies’ proposal for a $500-million development.

“We were pleased with the level of attention that the court gave to the case,” said Dan Daniels, president of M.H. Sherman. “We look forward to meeting with the city representatives soon.”

The proposal calls for a 400-room hotel and as many as 370 homes on the bluff top, which is one of the last undeveloped coastal properties in Orange County.

Chandis Securities, which oversees the financial holdings of the Chandler family, is a major stockholder of Times Mirror Co., publisher of the Los Angeles Times.

In April 1995, a Superior Court judge upheld the referendum, saying there was no merit to the lawsuit. Four months later, the developers appealed the court’s decision.

The state’s 4th District Court of Appeal in Santa Ana ruled May 22 that the two sides should continue negotiating.

“The parties are considering the most appropriate and effective means to abide by the court’s order, including the possible retention of a mediation specialist,” Patterson said.