Plans for massive 15,000-home city on Diablo Canyon lands uncovered in private email

A local developer said he wants to build a 15,000-home community near the Diablo Canyon nuclear power plant in an area known as Wild Cherry Canyon, and he thinks he can cut a deal with PG&E for the land, drawing criticism from conservation groups and shock from county leaders.

According to an email obtained through the Public Records Act, Developer Denis Sullivan told another developer that he thinks he can get the support of county supervisors on a deal for a new community that could be one-and-a-half times the size of Grover Beach.

“Think we can get a deal with PG&E to get the fee (title),” the email says. “Think we should push forward a (sic) soon as possible.”

Sullivan, one of multiple potential investors on the project, sent the Jan. 10 email to Tom Blessent, a manager with HomeFed Corp., a company that leases the land from a subsidiary of PG&E.


No application has been submitted to the county for such a development, and the Planning Department has not received any recent meeting requests on the issue. And PG&E has said it will not commit to any plans for the land surrounding the nuclear power plant until after the public, through an advisory group, has a chance to weigh in on potential uses for the property after the plant shuts down by 2025.

Sullivan did not respond to requests for comment on this story. In response to requests for information about plans for development, HomeFed Corp. President Paul Borden distanced the company from Sullivan, saying he is a “minority partner” and does not speak on behalf of HomeFed or the other investors.

Still, conservation groups, who for years have fought to preserve the 2,400-acre Wild Cherry Canyon for public access through the State Parks system, jumped to attack the plan.

“Placing a new city on these pristine lands would be an environmental tragedy of the first order,” said Kara Woodruff, with Friends of Wild Cherry Canyon, which, along with the Santa Lucia Chapter of the Sierra Club, first circulated the email with a press release. “From an ecological, safety, traffic, fire, and regional quality-of-life perspective, it’s hard to contemplate a worse place for a development of this size.”

Wild Cherry061
The higher elevations of the Wild Cherry Canyon property offer ocean views from Montaña de Oro to Point Sal on a clear day. Joe Johnston The Tribune 2008

She said the email seems to suggest that PG&E and Sullivan have been discussing a deal for the land, despite PG&E’s promise to not take action on the land without public input.

PG&E spokesman Blair Jones denied the accusations and said, “we are not engaged in negotiations with HomeFed or Mr. Sullivan to develop Wild Cherry Canyon.”

HomeFed in 2015 proposed building 1,000 to 1,500 homes on 240 acres of the property, but Foulgars said any discussions with PG&E regarding the development ended in 2016. The company’s quarterly report, however, says that HomeFed continues to pursue fee title of the land.

Any residential subdivision would require an amendment to the county General Plan and to the Coastal Plan. Supervisors Adam Hill and John Peschong said they have not met with anyone representing the company about a development of that scale.

“I can’t even wrap my mind around how they would do something like that in that community,” said Hill, who said he wants to see the land conserved. “This makes no sense. It would wreak havoc on Avila.”

In the letter, Sullivan says he can push the Board of Supervisors “that are in our favor” with the idea of workforce housing.

“It’s not a good place for workforce housing. On no level can I see this making sense,” Hill said.

But he added, “it scares me that given the political situation, stuff like this could advance.”

He said the conservative board majority “might be receptive to this.”

Chairman John Peschong said his reaction is “shocked.”

“I’ve never heard or seen that,” he said of the proposal of 15,000 homes. “It’s brand new to me.”

“I am very supportive of low-income houses and workforce housing; there are mandates from the state to do that,” he said. “Even if that’s 4,000 workforce homes, that’s a lot of homes. ... The impact on water, sewer, to me that’s a very large development, and I’m not sure I could support it. I’m supportive to listening to it, but I have a lot of questions to how infrastructure could support something that large.”

For years, conservation groups have sought to preserve Wild Cherry Canyon and in 2000, San Luis Obispo County voters approved the Dream Initiative calling for the property around the power plant to be conserved in perpetuity.

In 2003, Sullivan announced plans to sell the lease and development rights to the Nature Conservancy for $17 million, but the deal fell through. State Parks also tried to purchase the land for $21 million, but that deal collapsed in 2013.

The Tribune obtained the email from Friends of Wild Cherry Canyon and Sierra Club and then from San Luis Obispo County counsel through a public records request. The county had a copy because the original email was sent to Supervisor Adam Hill.

Note: A previous version of this article cited the wrong HomeFed official. Paul Borden, president of HomeFed Corp., provided information about his company’s dealings with PG&E.

Monica Vaughan: 805-781-7930, @MonicaLVaughan

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