Ranch outlook not so good

Banning Ranch, one of the last large chunks of undeveloped coastal land in Orange County, could cost $184 million to $211 million, according to a new Newport Beach-commissioned pricing study.

The city could get a discount of 25% for buying the land all at once, reducing the price to anywhere from $138 million to $158 million.

Local environmentalists say they believe the cost is inflated.

“The problem is there’s no comparables; it’s hard to compare Banning Ranch to anything, because there’s nothing like that in the area,” said Chris Bunyan, a member of the Banning Ranch Task Force, a group that wants to preserve the land as open space.

The ongoing state budget crisis also could put a damper on the hopes of local environmentalists for Newport to purchase the land and preserve it as parks and open space, according to the new city report.

The report also does not take into account the tens of millions of dollars it could take to clean up the remnants of decades of oil production that have scarred parts of Banning Ranch with pipeline and oil wells.

“We had always suspected there were going to be that many zeros,” Newport Beach Councilwoman Nancy Gardner said. “The state just isn’t writing checks for these sorts of things right now.”

Some types of state bond money, which the city has been eyeing as a source of funding to buy Banning Ranch, have been frozen because of the ongoing California budget crisis. The state is facing a $42-billion budget deficit, and the Legislature continues to be deadlocked over passing a budget.

“Unfortunately, we’re in a recessionary climate, and there’s probably not a lot of easy money out there for this,” Newport Beach Councilman Steve Rosansky said. “My sense is that it’s going to be an uphill battle to locate funds for this type of a purchase.”

Newport Banning Ranch LLC, a consortium of three land owners, want to build 1,375 homes, shops and a hotel on the 400-acre Banning Ranch. The developer has estimated it would cost between $30 million and $60 million to clean up the land after years of oil production.

Extensive work needs to be done to clean up some 500 oil wells that have been drilled on the land over the course of roughly 60 years, the developer claims. The millions of dollars it will take to restore the land would be the responsibility of the land developers if their plans move forward.

Cleaning up the cost of years of oil excavation “is kind of a black hole,” said Newport Beach Mayor Ed Selich. “The problem is they don’t know what’s underneath the ground. There are uncharted wells and pipes that add a whole other dimension to the cost.”

The Newport Beach City Council will discuss the new pricing study at a study session at 4 p.m. Tuesday at Newport Beach City Hall.

BRIANNA BAILEY may be reached at (714) 966-4625 or at brianna.bailey@latimes.com.