Headlands Resort Plans to Come Before Council : Development: Since 1974, the debate over the proposal has escalated. Dana Point will finally hear the pitch; opponents prepare for a showdown.

DANA POINT —  “Be There,” urge the bumper stickers popping up on local street signs in recent weeks.

The handwritten stickers announce that it is time for a showdown at City Hall on perhaps the most controversial development in the history of Dana Point, perhaps all of South County.

After countless hearings and public workshops on possible development proposals dating back to 1974, a plan for a $500-million luxury resort on the Headlands above Dana Point Harbor will come before the City Council on Tuesday night for the first time.

A 400-room hotel, two commercial centers and 394 homes are being proposed for the 120-acre site, considered by developers one of the most desirable undeveloped coastal properties left in Southern California.

City officials say the recent emergency listing of a peculiar Headlands fauna--the Pacific pocket mouse--as an endangered species is not expected to change the hearing process. The mice--39 hamster-like members of a rare species once thought to be extinct--were discovered during an environmental survey for the proposed Headlands resort.

But long before that Feb. 1 listing, battle lines over the development project had been drawn between its proponents, who believe it will be an important source of long-term city revenue, and an array of environmentalists, who insist the land should remain in its pristine state.

Environmentalists such as Gary Wright, a 32-year-old Dana Point surf shop owner, grew up enjoying the open land on the bluff-tops and the waves at its shores. He and others, including the South Coast Audubon Society and a local Sierra Club group, claim nothing less than a way of life is at stake in the development of the Headlands.

“There is more of a vista on those bluffs than anywhere in the county, other than the Saddleback Mountains,” Wright said. “There’s a sense of adventure in that land, where you feel like you can get away from it all. I don’t want to lose that.”

Project backers, such as City Councilman Mike Eggers, say the city needs the project to pay for its future. The 5-year-old city of Dana Point relies on hotel taxes to make up about one-third of its $11-million annual budget.

When the project is completed, Eggers said, “we are looking at about $2.5 million annually in city revenues. That puts a lot of cops on the streets.”

Since the 1940s, the Headlands property has been owned by the Newport Beach-based M.H. Sherman Co. and Chandis Securities. Sherman, an early Los Angeles County developer known for Sherman Oaks, was also the founder of Sherman Gardens in Corona del Mar.

(Chandis Securities, a firm that oversees the financial holdings of the Chandler family, is a principal stockholder of Times Mirror Co., which publishes the Los Angeles Times.)

But it was back in the 1920s that a resort was first planned for the site, which offers a 180-degree view of the coastline, said Edward M. Knight, Dana Point’s director of community development. Since that time, the resort has undergone several evolutions, all under county or California Coastal Commission direction, Knight said.

“It’s gone one way and another way and this way and that, from a land-use standpoint,” Knight said. “Now it’s up to the City Council.”

Other than Eggers, who has not been shy about proclaiming his support for the project, council members have reserved their comments for the public hearings. The only hints on how the council might feel came in a public workshop last May, when individual members indicated they wanted more natural parks, more open space and no gated communities in the project.

Dan T. Daniels of Laguna Beach, president of M.H. Sherman Co., said the project has been scaled down over the years after “unprecedented community input.” Before Dana Point incorporated as a city, the Coastal Commission had approved a Headlands project with two hotels, where now there is one, 804 homes versus today’s 394, as well as time-share condominiums and commercial sites, Daniels said.

Under the latest proposal, the property will also be crisscrossed by public trails, have several lookout points and more than 34 acres of park land, Daniels said.

Environmentalists, rallying around a “Save the Headlands” cry, are certain to lobby for more, however. Ken Fortune, 42, a director of the South Coast Audubon Society, said the financial arguments for development are weak, and as much of the land should be saved as possible.

“I don’t see the wisdom of cashing in a natural resource on some vague promise of an economic reward,” said Fortune, a San Clemente plumbing contractor. “It’s a one-way deal. Once you trash it, you can’t go back.”