SUNDAY STORY:A rough diamond

After rocking up and down for decades on Banning Ranch, most of those oil-pumping “horses’ heads” may soon suck their last drop of crude.

The 402-acre Banning Ranch property is a maze of roads leading to working and abandoned wells and disused utility buildings, and it’s dotted with piles of broken cement and scrubby plant life.

But it borders restored wetlands abutting the Santa Ana River, and it boasts gorgeous coastal views.

Now the parcel is due for a major makeover that would turn at least half of it into open space for public use and the other half could be developed with homes, shops and a small hotel.

As one of Southern California’s last large pieces of coastal land that’s privately owned but undeveloped, Banning Ranch could become a gem to park lovers and residents. But a lot of polishing needs to come first.

A HISTORY OF OIL

The property was first developed as an oil field in 1945. Drillers knew they’d find crude in the area because the Newport-Inglewood Fault, which trapped subsurface oil, has its southern terminus under Newport Beach, Aera Energy Vice President George Basye said. Aera Energy is a 50% owner of the Banning Ranch land, and a separate company — West Newport Oil Co. — owns the underground oil rights.

“There’s been, in the past, hundreds of wells that were drilled out here,” Basye said on a recent tour. Many of the “horse heads” — the above-ground pumping mechanisms — remain, but only about 60 of 500 wells are active, Basye said.

Property owners recently negotiated an agreement to consolidate working wells to between 12 and 15 acres, and some slant drilling will be used, he said.

“That’s really what has the potential to unlock the balance of the property,” Basye said.

The old wells will be capped, a process that involves taking out the underground workings and plugging the hole with cement to about eight feet below ground so no oil seeps out.

Taking out the wells will yield tons of broken cement, which Basye said will be recycled. Miles of pipes, both above and under the ground, will have to be removed. The cost of old well removal is unknown, Basye said, but it could be in the tens of millions of dollars.

SOME DEVELOPMENT, SOME PRESERVATION

The cleanup of hundreds of acres sounds like an enormous effort, but Basye estimates the work should only take a year. But before developing the property, the owners will need approval from a laundry list of local state and federal agencies such as the California Coastal Commission, the state Department of Fish and Game and the U.S. Army Corps of Engineers.

There are several choices for Banning Ranch’s future, but so far the most likely appears to be one of the options laid out in Newport Beach’s general plan. Although Banning Ranch is not within the city limits, it lies within Newport’s sphere of influence, giving Newport the responsibility to plan for the area.

The now-unincorporated property borders Costa Mesa and Newport Beach and is tangled in a long-running annexation dispute between the two cities. Officials are hoping to come to an agreement by May that would put Banning Ranch and three other parcels inside the boundaries of one city or the other.

Aera Energy officials opted to work with Newport, and together they created a plan to reduce the amount of development allowed on Banning Ranch and reserve about half the property as open space.

Although the owners are working on a pre-annexation with Newport, Basye said they haven’t definitively cast their lot with anyone yet.

“That’s kind of an evolving story,” he said. “We recognize the importance and we’re committed to working with both cities and the county in a collaborative effort to plan this.”

Newport’s new general plan — approved by voters in November — includes two options: One allows as many as 1,375 homes, 75,000 square feet of stores and a small inn with 75 rooms.

That’s a dramatic reduction from the old general plan, which permitted more than 2,700 residential units and 465,000 square feet of nonresidential development.

Basye said if Aera develops the land, half would be permanent open space. The property’s lowlands would be restored as wetlands, and some of the existing roads could be kept as trails.

Giving up half an undeveloped site with a coastal view isn’t simply altruism. The protected California gnatcatcher has been spotted on the land, and wetlands are also a high priority in state and federal regulations, Basye said.

California Coastal Commission spokeswoman Sara Christie said the coastal act requires protection of environmentally sensitive habitat and scenic public views. She wasn’t familiar with Banning Ranch, but she said it’s likely the commission would require some kind of open space to approve development in such a case.

“In a place like Orange County, where much of the land has been developed, it becomes even more critical to preserve what’s left,” she said.

PRECIOUS AND PRICEY OPEN SPACE

Others would like to see even more open space. Environmentalists have been pushing to preserve all of Banning Ranch, and they’re not alone — that’s the preferred option in Newport’s general plan.

Many people were concerned about an earlier, larger development plan by builder Taylor Woodrow, said Newport Beach City Councilwoman Nancy Gardner, who spearheaded the city’s general plan update before she was elected to the council in November.

But during the general plan process, support grew for an all-open-space plan. Gardner thinks it’s because the community is so built out that green space has become more precious.

“I grew up here, and nobody questioned it. Growth was good,” she said. “All of a sudden people are going, ‘Wait a minute, where am I going to walk with my kids?’ I think there’s just been a sea change in people’s attitudes.”

Gardner and other open-space supporters are hoping that change, combined with the availability of funds from a recent parks bond issue, will create a perfect storm that will allow them to buy the property.

Asked what the 402-acre property is worth, Basye said, “I don’t know, but it’s a big number.” Newport Beach Assistant City Manager Dave Kiff put it between $200 million and $300 million.

Terry Welsh, chairman of the Banning Ranch Park and Preserve Task Force, hopes it’s a somewhat smaller figure. He’s hoping to cobble together some of the parks bond funding with local dollars and money from private foundations like the Nature Conservancy.

There’s a unique window of opportunity now, and he wants to take advantage of it.

“It is the mother of all environmental battles in the Newport Beach-Costa Mesa area,” Welsh said.

Gardner said there’s a better chance now than perhaps ever before of raising money to buy Banning Ranch, but she’s still skeptical.

“I certainly don’t think that it’s going to be any bargain,” she said. “If they do sell it, it’s going to be what it’s worth.”