Pismo council to begin hearings on Price Canyon development in January

This view looking south shows a portion of Price Canyon in 2011 where 961 acres could eventually be annexed into Pismo Beach and developed.
This view looking south shows a portion of Price Canyon in 2011 where 961 acres could eventually be annexed into Pismo Beach and developed. jjohnston@thetribunenews.com

The Pismo Beach City Council will start holding hearings in January on a proposal that could change the character of Price Canyon north of the city.

On Tuesday night, the city’s planning commission sent the last of several documents on the Spanish Springs development to the council for its consideration.

Commissioners didn’t make many comments before approving the most recent document, a draft development agreement, on a split 3-2 vote. Commissioners David Jewell and Kate Shurson dissented.

The Spanish Springs proposal includes 390 single-family homes, 83 apartments or condos, 320 senior residential units, a 150-room hotel and conference center, vineyards, a nine-hole golf course and parks to about 960 acres off Price Canyon Road north of the city limits.

The properties would have to be annexed into Pismo Beach before being developed.

Only a half-dozen people spoke about the development agreement Tuesday. Most were local residents opposed to the development, and they raised familiar concerns about water, traffic, and whether the city needs more housing.

“The impact on resources and on our rural way of life would be enormous,” said Benjamin Davis, who lives in the county outside Arroyo Grande.

The draft pre-annexation and development agreement, which has a 20-year term, serves as a contract between the city and the developer, a limited liability corporation managed by land investment and development firm West Coast Housing Partners.

Jewell raised a concern about one clause in the agreement, which states that development depends upon a number of factors, including economic conditions, and that the developer can’t be required to develop the property.

“In a bad housing market we can’t tell them they have to build 50 homes,” Biggs said by way of example.

But, he added, the developers will spend millions on improvements related to the project, if it goes forward, and the only way to make a return on their investment is to make sure the homes, the hotel and other amenities are built.

Commissioners have also already asked the City Council to try to impose a guarantee that the hotel be constructed, since it is expected to be an important revenue stream for the city.

“Real estate projects really aren’t profitable until the latter parts of the project,” said property owner Stephen Hester of West Coast Housing Partners. “For us to recoup our investments we really do need to develop through this project, but we have to have the flexibility of timing to do that based on market conditions.”

As part of the draft development agreement, the owner has agreed to fund a number of infrastructure and other improvements, including making an estimated $3.5 million upgrade to the city’s wastewater treatment plant and constructing an estimated $8 million inland arterial road across the property connecting to Price Canyon Road.

Related stories from San Luis Obispo Tribune