On an overcast July morning, a group of county supervisors, local City Council members and a few worried residents climbed into a white Ride-On shuttle parked in front of Pismo Beach City Hall.
Dense fog partially obscured the ocean and the hills above the town. The bus tour wound slowly up Longview Street, deep into the Pismo Heights neighborhood, and stopped near the top of the nearly milelong street.
The group piled out and gazed toward hills that could one day become part of Pismo Beach and bring homes, vineyards, hotels and a golf course to the area known as Price Canyon.
The proposal includes four properties and 1,161 acres that could bring 600 to 900 homes and 1,300 to 2,000 new residents to Pismo Beach.
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If added to the city at once, the project would be the second-largest block of land annexed by a city in San Luis Obispo County in nearly 50 years and could expand Pismo Beach by a third. That possibility has prompted some residents to fight the plan.
The outcome could not only shape the future of Pismo Beach but cement local residents’ opinions on how its elected officials view development. Critics say new homes are unnecessary and there’s plenty of land available for development within city limits.
Planners — and the city’s General Plan — recommend taking a proactive approach toward planning for growth outside the city. And planners, along with council members, stress that adding land to Pismo Beach’s so-called “sphere of influence” does not guarantee the land will be annexed and developed.
It’s also unlikely that the entire area would be annexed at once, local planners say. Development could occur over 20 years, bringing additional residents into the city gradually along with a network of recreational trails, a golf course and an expanded Price Historical Park. Plans also include 200 hotel rooms and some commercial development.
“Obviously, no one is going to be building tomorrow or next month or next year,” said Don Ritter, a planning consultant for Darren Shetler and Tim Lewy, who own a 258-acre parcel.
He noted that the owners are proposing to develop only on 84 acres.
Still, some South County residents are worried that, regardless of when Price Canyon develops, it will irreparably transform the region.
“We’re afraid the whole character there is going to change,” said Stewart Robinson, who lives in the county, a ridge away from the Price Canyon properties. “To live on a rural property one day and the next have a housing development abut your property, that’s tragic.”
Debates about plans for growth in Price Canyon are not new. Two of the properties, totaling 400 acres, have been in the city’s sphere of influence — the area outside city limits where Pismo Beach is expected to expand in the next 20 years — since 1998. A third property was added in 2002.
But the discussion is heating up. In September, the San Luis Obispo Local Agency Formation Commission will consider adding another property to the sphere of influence, a 250-acre parcel known as the Godfrey property.
LAFCO, composed of local county and city officials, sets spheres of influence and approves annexations. A property has to be added to a city’s sphere of influence before it can be considered for annexation.
LAFCO received 26 letters commenting on various aspects of the Price Canyon plan. None of the nearly two dozen letters from South County residents offered support. And along with concerns about water and increased traffic, some are wondering: Why now?
“No one disputes the right of the developers to build on their lands,” Pismo Beach resident Sheila Blake wrote to LAFCO. “The developers and the city of Pismo Beach would have you believe that they need the additional acreage added to the sphere of influence. Why?”
The tour of the Price Canyon area in July was organized to give the LAFCO board members an “on the ground” perspective of the project.
At one stop, at the end of Vetter Lane bordering the Godfrey property, more than three dozen people waited for the bus to arrive to lob questions at LAFCO Executive Director David Church.
“What would it take to exclude this property from annexation?” asked Jennifer Silva, who lives nearby.
Church responded that the board “could in theory draw that line somewhere else.”
Just one step
Adding the Godfrey property to the sphere of influence doesn’t mean the land will ever be annexed into the city, said Pismo Beach Planning Manager Carolyn Johnson and LAFCO analyst Mike Prater. In fact, the entire sphere of influence is on the table for the LAFCO board to discuss next month.
“We’ve encouraged (Pismo Beach) to look toward the future so they can plan for it rather than react to it,” Prater said.
The city’s growth element — another part of its General Plan — stipulates the city take a proactive, rather than reactive, stance toward planning for areas outside Pismo Beach that could become urbanized.
When the time comes to consider an annexation request, LAFCO will go through it with a “fine-tooth comb,” Prater said. So will the Pismo Beach City Council, said Councilwoman Mary Ann Reiss, though she declined to comment on the specific developments.
The Price Canyon properties could not be annexed into the city unless they bring in their own reliable water supply, maintain the scenic view of the Price Canyon Road corridor and don’t cost the city money, according to Pismo Beach’s General Plan.
“There’s this fear that if it’s in the sphere, it’s going to be annexed, and that’s not the case,” Reiss said. “There’s always the water issue, and we have to protect our resources. It’s going to be looked at very closely.”
Population trends are only one factor of about 20 that LAFCO staff considers when making a recommendation on a city’s sphere of influence, Prater said.
Others include policies on urban sprawl and loss of agricultural land; the developers’ requests; the capacity of the city’s facilities and services; and social and economic impacts.Is there a need?
Critics, however, continue to question the need for more homes, when in fact Pismo Beach’s population decreased 10 percent over the past decade. While the number of residents jumped 12 percent from 1990 to 2000, this past decade saw an exodus of nearly 900.
That’s likely due to a combination of factors, including a higher cost of living that priced people out, said Steve Devencenzi, planning director for the San Luis Obispo Council of Governments. Other factors are an older population, with fewer people living in each home, and a spike in the number of homes being used as vacation rentals or second homes, he said.
The latter factor means the city has fewer permanent residents than in past decades. Of the city’s 5,585 housing units, 1,751 were vacant — 1,442 of those are used as seasonal or second homes, 218 are for rent or sale, and others are vacant for various reasons, according to the 2010 U.S. census.
Vacant land throughout the city could translate into an additional 350 homes, Johnson said.
Meanwhile, the Department of Finance released figures in May showing Pismo added 60 residents as of January, with the population now estimated at 7,708.
“I don’t think you’ll see a longterm decline in Pismo’s population once we’re out of the woods,” said Jordan Levine, director of Economic Research for Beacon Economics.
Residential construction is expected to stay soft into 2012, he said, as the market remains fluid with foreclosed and distressed properties.
In the past 20 years, Pismo Beach has added an average of 52 new homes per year — though construction dropped sharply the past three years. For the first six months of 2011, Pismo has issued three residential permits.
“It’s a mistake to think that building causes growth,” said Jerry Bunin, government affairs director for the Homebuilders Association of the Central Coast, who stressed that he was referring to growth in the county in general. “Building is a reaction to growth. As long as you have children and grandchildren and economic development and you don’t leave when you retire, you need new houses.”
Some residents, however, are not convinced.
“Cliffs crumble, roads erode, sidewalks are missing. We have many needs,” Marian Mellow, a former Pismo Beach mayor, wrote in a letter to LAFCO. “An enlarged sphere of influence, subsequent annexations and thousands more people we cannot provide services for is not among them.”
A closer look at the project
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