People in SF might ‘love’ more vacation homes near Avila Beach. But how would locals react?

San Luis Obispo County is in dire need of more housing, but vacation homes for wealthy out-of-towners?

No way.

Yet that’s what out-of-town investors engaged in a legal fight over 2,400 acres of near-pristine land near Avila Beach are talking about.

One of them came right out and said as much during a civil trial underway in San Luis Obispo Superior Court.

“I’m sure people in San Francisco would love a vacation home here,” testified Joseph Steinberg, chairman of a New York-based investment banking firm with a large stake in Wild Cherry Canyon, which is part of the buffer zone surrounding Diablo Canyon nuclear power plant.

This isn’t just any old piece of land.

We’re talking about ocean-view property that is considered a jewel-in-the-crown on the Central Coast. Conservation groups tried for years to purchase it so it could be preserved in perpetuity.

Now a tone-deaf, big-city investor is talking about building trophy homes there?

Did no one prep this witness?

Shouldn’t investors at least try to sugarcoat their intentions, maybe focus more on what could be in it for locals — especially since it’s long been apparent that most county residents would prefer to see the land preserved?

A 2015 article in SLO Life magazine described the reaction when the development plans were first presented to the community: “The energy in the room was tense, and although the crowd was polite, it was clear that if it had come to a vote, it would have fallen somewhere between ‘No’ and ‘Hell no.’”

In 2000, 75% of county voters approved the DREAM Initiative, an advisory measure that called on county leaders and PG&E to set aside Diablo Canyon Lands for habitat preservation, agriculture and public use after the nuclear plant has closed.

Dueling legal claims

That advisory measure includes Wild Cherry Canyon, except there’s the sticky matter of the lease.

HomeFed, a real estate development company based in Carlsbad, is the leaseholder. It claims the lease runs for 99 years, with the option to renew for another 99 years.

Eureka Energy, however, argues that the state’s civil code limits leases on agricultural land to 51 years, which means time has run out.

If HomeFed prevails in the court case, investors say they intend to move ahead with development plans.

Ideas tossed around over the years have included a dude ranch-type development with equestrian and hiking trails, a housing subdivision with 1,000 to 2,500 units and extensive amenities.

At one point, there was even talk of a 15,000-home subdivision, though the focus now appears to be on an exclusive, high-end housing development.

The public wouldn’t necessarily be locked out of access to the area.

If investors eventually get the OK to build a luxury subdivision, there would likely still be opportunities for the public to enjoy the property. Witnesses in the case have testified that any development would have a small footprint — only 10% of the lands would likely be developed — leaving plenty of room for public open space and hiking trails, including one linking Montaña de Oro State Park to Avila Beach.

Is it all a bluff?

There’s been speculation that HomeFed and its partners aren’t really interested in building, and are instead trying to drive up the cost of the land for conservation groups still interested in buying it.

“Perhaps the real play here is a bluff,” the SLO Life magazine piece says. “Maybe, by pushing hard for wide-scale development, they are instead posturing for another conservation deal.”

Investors say they wouldn’t be going through all this trouble if they didn’t intend to develop the property, according to reporting by Tribune writer Mackenzie Shuman, who has been covering the court trial.

If HomeFed wins, “we’re going to get busy again and fight with the world to get a project entitled,” Steinberg testified.

They may have to do exactly that.

Here’s how Mark LaRue, deputy director of County Planning, described the permitting process in an email to The Tribune:

“The site is zoned agriculture and is not envisioned in any county planning documents for housing development. The owner would need to rezone the land, obtain numerous permits and entitlements, including coastal development permits, expand urban services and undergo extensive environmental review.”

In other words, it would be a daunting, time-consuming and expensive process.

And there would almost certainly be major pushback from members of the community, who have made it clear that they will oppose any additional large housing projects in the hills around Avila Beach.

They have good reason to do so. Even a small housing development on the property would tax local resources, increase congestion in a two-lane-road community already plagued with traffic problems, and raise concerns about fire safety, given the area’s hilly terrain and vegetation.

Add to that objections from PG&E: “Any development there could be quite complex from an emergency planning standpoint,” PG&E representative Tom Jones testified on Wednesday. “It wouldn’t be tolerable for us.”

If investors really are prepared to “fight with the world” to get this project built — public sentiment be damned —we offer them a bit of advice.

That line about people from San Francisco loving vacation homes in Wild Cherry Canyon? Drop it.

You’re going to have to do a much better job of selling this project to the residents who live here rather than wealthy wannabes who don’t.

This editorial has been updated with testimony from PG&E representative Tom Jones.

This story was originally published December 1, 2022 at 5:30 AM.