When the San Luis Obispo County Board of Supervisors approved the first of what could be several phases of development at Santa Margarita Ranch, located 10 miles northeast of San Luis Obispo, they did so on a 3-2 vote – at a special meeting two days before Christmas with two lame-duck supervisors providing the deciding votes.

The five-hour meeting on December 23 was not full of holiday cheer. Project opponents complained bitterly to the Board of Supervisors about what they saw as a rush to approve a questionable project. County staff members were obviously uncomfortable with being told to comply with the developer's wishes. Supervisors jabbed each other with pointed statements. Representatives of landowners Rob Rossi, Doug Filipponi and Karl Wittstrom contended the project had been delayed unnecessarily.

After the vote, Supervisor Katcho Achadjian, a project supporter, told the San Luis Obispo Tribune it was "a lose-lose situation." If the board failed to approve the project, the landowners would sue. If the board approved the project, opponents would sue.

He was right. Opponents filed a lawsuit in late January, arguing the Board of Supervisors violated the California Environmental Quality Act, state planning and zoning law, the Subdivision Map Act, and the county's general plan and land use ordinance. The local opponents were joined by a potentially formidable ally – the Endangered Habitats League, an advocacy group with a long track record of battling over and negotiating development and conservation in metropolitan Southern California. The league has never taken its advocacy this far up the coast, but it decided to participate in here because the proposed development "would set a precedent for other ranch and farmlands in the iconic Central Coast," according to a written statement by EHL attorney Michael Fitts.

A former Mexican land grant, Santa Margarita Ranch covers 13,800 acres of the Salinas River Valley near Santa Margarita, an unincorporated community of about 1,100 people just east of Highway 101. Cattle have grazed on the ranch since the 18th Century, but large-scale development has been under consideration since at least the 1980s. For a brief period, Stanford University owned the property, which is now under the control of Santa Margarita Ranch LLC.

In the 1990s, the landowners sued the county in a dispute over the number of legal parcels on the ranch. The county settled the litigation in 1997 with a development agreement that outlined overall uses for the property: 1,800 acres for 550 housing units, a golf course, a lodge and other visitor facilities; 8,400 acres protected as permanent open space, and 3,600 acres of agricultural land. Local residents sued over the settlement, arguing the county had unconstitutionally given away its police power. In a precedent-setting decision, the Court of Appeal in 2000 upheld the development agreement as "a legitimate exercise of governmental police power in the public interest." (SMART v. County of San Luis Obispo, 84 Cal.App.4th 221; see CP&DR Legal Digest, December 2000.)

In 2004, the landowners submitted an application for a tentative tract map and a conditional use permit for a "major agricultural cluster subdivision" on the south edge of Santa Margarita. The proposal sought to create 111 single-family lots of 1 to 2.5 acres apiece, five open space lots of 190 to 1,000 acres apiece, and a 2,400-acre remainder lot. The landowners also laid out their vision for the property's full development with an additional 400 houses, a golf course, various ranches, retreats and lodges, nine wineries, space for galleries, shops and restaurants, and a livestock auction yard.

The proposal underwent a lengthy environmental review process. Local, state and federal agencies raised questions about the project's impact on protected plant and animal species such as the San Luis Obispo Mariposa lily, the California tiger salamander and the red-legged frog, as well as impacts on oak woodlands, water quality, air quality, traffic and archaeological sites. County planners urged consideration of alternative project layouts.

The project made it to the county Planning Commission in July 2008. The Commission conducted several contentious meetings at which county planners and the Commission recommended a smaller, tightly clustered residential subdivision closer to the existing town. The landowners refused to modify the project and insisted the Commission vote on the proposal as-is. In October 2008, the Commission denied the tract map and conditional use permit because of conflicts with the county's land use policies. The Commission also refused to certify the environmental impact report.

The landowners appealed to the Board of Supervisors, which was about to undergo a change. In June 2008, voters replaced Supervisors Jerry Lenthall and Harry Ovitt with Adam Hill and Frank Mecham, respectively. Hill and Mecham were expected to bring a more environmentally sensitive perspective to the board, but they were not scheduled to take office until the first meeting in January 2009. Project opponents asked the board to postpone the appeal until the new supervisors were seated, but Achadjian and the lame ducks insisted the project had languished in the county's bureaucracy long enough.

The board conducted five sessions on the appeal and ultimately approved the proposed project at the December 23 special session. At that meeting, county Planning Director Vic Holanda made clear his dissatisfaction with board majority's handling of the project.

"I'm really concerned that you are putting our department, our professional staff, in a very tenuous situation," Holanda bluntly told the board. "In over 30 years of my career, I have never been subjected to this type of proceeding. I'm not saying it's illegal. It's highly unusual to have the applicant … dictate to the staff how to write conditions and findings for a very important project."

"For the record," Holanda continued, "I'm objecting to this type of proceeding. I believe we should have a continuance to work with the applicant so that we can develop a reasonable project, not only for the community of Santa Margarita, but for this county. I'm very concerned with where we are going with this."

Nonetheless, three supervisors voted to approve the project and an EIR that contained overriding considerations because of numerous unmitigated impacts, including a finding that the project does not have an assured long-term water supply.

Susan Harvey, president of North County Watch, which filed the suit over the project's approval, said she would like to see a fresh planning process for Santa Margarita Ranch that includes all stakeholders. A better project would place development close to the town, while protecting prime agricultural soils, the headwaters of the Salinas River, endangered species habitat and valuable archaeological sites, she said.

San Luis Obispo County staff reports: http://slocounty.granicus.com/MetaViewer.php?view_id=2&clip_id=601&meta_id=122055
North County Watch: www.northcountywatch.org