Who is Paying for the Headlands?

Headlands Cliff.
Photo © Cliff Wasseman/aku-aku.com

Indeed, Surfrider's executive director Chris Evans is a retired Fireman, and he's furious. "As a person with money in CalPERS, I'm outraged that my pension fund is financing this project," he said. "I'm sure that a number of other state employees would be too."

So, could Mr. Plasencia be right? Will disclosure of such information "hurt the ability of the fund to maximize its returns"? It depends on how the employees feel.

When we contacted members of the Coastal Commission, one employee who asked not to be identified said that there had been a rumor that CalPERS was involved, and that it was quite interesting to hear that CalPERS had indeed spent millions on the Headlands, "but with a state the size of California, and all the conflicting issues, I'm not surprised it would shake down that way."

The employee cited other controversies the Commission has had with, for example State Parks, over the use of off-road vehicles at Pismo Beach's Oceano Dunes. Though the Oceano conflict doesn't involve retirement funds. "As a CalPERS member," the employee said, "I'm not too keen on this. I'm offended when I see funds going to things I don't like, but I don't know if it's a violation. CalPERS is so enormous that one particular action is not going to affect anyone's retirement."

On the record, Peter Douglas, the Commission's executive director said that he asked the developer directly where the money for the Headlands project was coming from and was told that it was CalPERS. "I personally was taken aback when I heard they were investors," he said, "but I've been in this business long enough not to be surprised."

The View from Above the Old Trailer Park.
Photo © Cliff Wasseman/aku-aku.com

He said that upon learning of this, he immediately went to the Commission's legal counsel to determine if there was a conflict. "Though it may appear that way," he said, "legally there's no conflict. In this case, our attorneys didn't hesitate. CalPERS is not a private business and you (the Commission) are not getting any income. The employees get a retirement no matter what -- and that doesn't depend on the income that CalPERS gets. It depends on how old you are, and how many years of service you have. If CalPERS gets zero return on the Headlands, it doesn't make a difference what state employees get in their retirement."

Appearance he said, was an entirely different issue. "It's like CalPERS investing in tobacco stock, or in Enron (in which they lost lots and lots of money) or gougers of the earth. People can criticize them for investment strategies."

In the case of the Headlands, he said this may be a moot point anyway because the staff has recommended that the Commissioners deny the project on several grounds including environmental and land form alteration. "We couldn't agree with the developers," said Douglas, "and we couldn't even recommend approval of his changed project."

Still, according to Cousineau, this doesn't mean that the Commissioners won't vote to approve the project outright or with conditions: "The commissioners could agree with staff and deny the project. Or they could disagree with staff and approve it. Or they could do the worst of all worlds in our opinion. The developer has submitted modifications and alterations. They're not in the official plans, but he's kind of floating them as trial balloons. The worst thing in our world is if the Commission gets up there and tries to redesign the project during the hearing. You don't get full public scrutiny. It's just horse trading on the floor."

The Dana Point Harbor, Doheny to the South.
Headlands and Strands to the North.

He continues: " Look, Surfrider's position is that we recognize the guy owns the land and he can do some development. This is not an anti-development campaign. Would it be great to preserve the whole Headlands? Yes. Do we think that's going to happen? No. Are we pushing for that? No. We're pushing for the development to occur without having to break the law. Don't put in a seawall, don't screw our beach. If that means you have to build a little less, okay. He's a speculative developer -- that's high risk and high profit. But he bought the equivalent of geologic quicksand and is trying to browbeat everyone to make it work instead of just making a little less money. We're not against the development and some of the things he's done, like his water quality plan, are very good. But we don't want to see the project approved until the whole project is compliant with the coastal act."

Of course, what remains to be seen is whether the California Coastal Commission think its appropriate. Find out on October 9, at the Del Coronado Hotel in San Diego. The vote is expected to go down somewhere between 10AM and 1PM. The hotel is at 1500 Orange Avenue in Coronado. For directions, call (619) 435-6611.

The Headlands is the last item on the agenda on Thursday:
http://www.coastal.ca.gov/mtgcurr.html

The San Clemente Chapter Petition Page:
http://www.beach.com/danastrands/

The Coastal Commission Staff report on the project is available at:
http://www.coastal.ca.gov/lb/Th9a-10-2003.pdf

The City of Dana Point Headlands Page
http://www.danapoint.org/headlands/