How the California Coastal Commission pressured scientists to change opinions on major project

The land — the largest private undeveloped coastal parcel in Southern California — is dotted with rusting oil pipes, abandoned wells and groaning pump jacks that continue to pull crude from the earth.

But nature hasn’t let go. Patches of prickly pear cactus, grasslands, scrub-coated arroyos and peaceful marshes provide refuge for wildlife that has all but vanished from the Southland’s crowded coastline.

The future of the Newport Banning Ranch site, where developers want to build a hotel and hundreds of homes, now rests with the California Coastal Commission — which is engaged in its own struggle for identity.

Last fall, commission scientists concluded that despite seven decades of oil production, the 401-acre Orange County tract harbored “an incredibly unique array of sensitive coastal species and habitats” that merited protection under the state Coastal Act.

The findings — which threw up a huge obstacle to the project — emerged as a major point of friction between the staff and many commissioners. In public comments and emails, they echoed developers’ arguments that the site was a brownfield and pressured the staff to revise its assessment.

As the push-pull continued, the commission — charged with “protecting and enhancing California’s coast and ocean for present and future generations” — voted in February to fire Executive Director Charles Lester in what critics deemed an attempt to make the agency more receptive to development.

Those critics got some ammunition recently when the staff released a new report on Banning Ranch. This time, it recommended approval of the project, albeit with dozens of conditions that would mean shrinking the development’s footprint.

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Oil company plans to develop Banning Ranch date back three decades. The current proposal has advanced the furthest with the help of consultants who have decades of experience lobbying the Coastal Commission: David B. Neish, president of an Aliso Viejo-based firm, and attorney Steven Kaufmann, who while working in the state attorney general’s office represented the Coastal Commission from 1977 to 1991.

Roughly 1,000 feet from the Pacific Ocean, the oil field is a prime piece of real estate in one of California’s priciest pockets.

The current project calls for 895 residences and 45,100 square feet of retail space, along with a hotel, a 20-bed hostel and two clusters of oil wells. About three-fourths of the site, much of it lowland wetlands that can’t be developed under the state Coastal Act, would be cleaned up and preserved as natural open space.

The project team — Aera Energy LLC, the real estate company Brooks Street, and Cherokee Investment Partners — twice has scaled back its proposal. If approved, it still would be one of the largest coastal projects in years.

The clusters of town houses, single-family homes, condominiums and the “resort colony” would rise on an upland mesa that offers sweeping ocean views from Santa Catalina Island to the Palos Verdes Peninsula.

But Banning Ranch is also a rare remnant of Southern California coastal ecosystems that have been largely destroyed by roads, shopping centers and neighborhoods.

In 2007, the U.S. Fish and Wildlife Service designated all of Banning Ranch as critical habitat for the California gnatcatcher, listed as threatened under the Endangered Species Act. Endangered San Diego fairy shrimp hatch in some of the mesa’s seasonal pools. Wetlands bordering the mouth of the Santa Ana River attract the endangered least Bell’s vireo. Burrowing owls overwinter on the bluffs.

In a 2015 memo, Coastal Commission ecologist Jonna Engel described the site “as one of the only reasonably intact wetland-bluff ecosystems remaining along the coast of Southern California.”

After inspecting the tract numerous times and reviewing field data provided by the developers, staff scientists identified much of the mesa as Environmentally Sensitive Habitat Area, or ESHA, a key Coastal Act protection. Under the law, only resource-dependent uses such as nature trails or low-impact camping are allowed. Courts have ruled housing development is not permitted.

The staff concluded that only 19 acres of Banning Ranch was suitable for development and recommended the commission deny the project .

Commissioners who had gone on a group tour of the site last summer disputed the assessment at an October hearing and directed the staff to work with the developers to come up with an acceptable project.

Martha McClure, a Del Norte County supervisor, called the oil field a “400-acre mess.”

“That’s what I saw … it was like, ‘Oh my God, I can’t believe that this is in California.’ I thought I was possibly in Oklahoma,” she said. “Why are we not moving to clean the property?”

Janelle Beland, a nonvoting member who as undersecretary of the California Natural Resources Agency is considered a point person for Gov. Jerry Brown’s administration, raised questions about a state Department of Fish and Wildlife memo that backed up Engel’s conclusions.

The department biologist who visited the fenced oil field, Beland said at the hearing, “stood at the edge of the property with

binoculars” and did not walk it.

“I think this was not done in the way it should have been done,” she said, adding that the memo “didn’t go through the chain and the process that was required in this case for approval.”

Steve Kinsey, a Marin County supervisor who is chairman of the Coastal Commission, remarked that “some of this highly disturbed area wouldn’t be my definition of ESHA .”

In a Jan. 19 email obtained by The Times through the Public Records Act, Kinsey continued to challenge the staff’s Environmentally Sensitive Habitat Area finding.

After spending several hours at the oil field in late December with members of the development team, he wrote to staff Deputy Director Sherilyn Sarb: “My overall impression is that the site has been so heavily degraded by historic oil operations that many of the areas identified as ESHA in the staff’s October presentation seem unwarranted.”

In an email to The Times, Kinsey said he had toured Banning Ranch “with the full support of Dr. Lester, who also encouraged me to go and also to share my thoughts with staff.”

“I reject any suggestion that my comments were intended to pressure staff,” he said — emphasizing that in his email to Sarb, he had stated that Coastal Commission “staff have complete autonomy” in making recommendations.

“I work hard to be a strong protector of our coast,” Kinsey said. “I also work hard to expand respect for the commission by more than just environmental advocates. That doesn’t translate into working for developers.”

Over the winter, commission ecologists revisited the site several times, re-examined field data and remapped the sensitive habitat area. While they expanded California gnatcatcher habitat, they reduced the number of seasonal wetland pools and areas of purple needlegrass, the official state grass of California. That pushed the area available for development to 55 acres.

In an interview, former Commissioner Sara Wan complained that the staff had “backtracked on the definition of wetlands. They backtracked on what constitutes an Environmentally Sensitive Habitat Area.

“They didn’t just come up with more acres. It’s the manner in which they came up with the additional acres that’s disturbing,” she said. “It could set a terrible precedent.”

Wan, who has a master’s degree in zoology, also faulted commissioners who visited Banning Ranch “and came back and said, ‘Oh, it doesn’t look like ESHA to me.’

“Excuse me,” Wan said. “You’re not a biologist. How do you know whether it’s ESHA?”

Commissioners are required to fully disclose meetings and phone calls with interested parties that occur outside of an official proceeding within seven days of the so-called ex-parte communication.

Kinsey did not file a disclosure form detailing his Dec. 22, 2015, Banning Ranch visit with developers until Monday, after The Times questioned him about his email to Sarb.

He and other commissioners have been late in submitting the required forms before, according to a Times review of commission records. But a delay of more than four months struck Ralph Faust, the agency’s general counsel from 1986 to 2006, as “particularly egregious.”

Disclosure violations carry civil fines of up to $7,500. And under the Coastal Act, commissioners who fail to report an ex-parte communication on time are not supposed to vote on the matter or try to influence the commission’s decision.

“He should step away and not have anything to do with it. He should not be talking to staff. He shouldn’t talk to the commission. All of that is influencing a decision,” Faust said. “That’s what the law says. Now whether a court finds that to be something that it would enforce, that’s a different issue.”

To his knowledge, Faust said, no commissioner has ever been fined, nor has a vote been challenged, because of an ex-parte violation.

But “it puts the decision at risk,” he said. “It creates a separate ground on which to challenge whatever decision the commission might come to.”

In an e-mail, Kinsey said he intended to take part in future Newport Banning Ranch hearings.

“I do not believe my late filing will have a material impact on the proceedings given that I have now filed,” he wrote, adding that he had consulted with the commission counsel and others.

“My lapse in filing occurred when I returned for the ensuing 10-day holiday. I simply lost track of filing my ex-parte, and the new year brought a wave of other commission duties that occupied my attention.”

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