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Why I Voted Against the Dana Reserve Housing Project

April 25, 2024
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On April 24, the Board of Supervisors voted 3-2 to approve the controversial Dana Reserve project in Nipomo. The project will allow for the phased development of a 288-acre master-planned community with up to 1,470 residential units, 110,000-203,000 square feet of commercial and non-residential uses, a minimum of 55.6 acres of open space and 6.3 acres of recreation, and related circulation and infrastructure. The project will increase the population size of Nipomo by approximately 30%, adding over 4,500 residents. 

I voted against the project because I thought there was a win-win to be had by supporting the preferred community alternative plan.

These are the comments I made from the dais during the project's hearing. You can also can also watch a recording of the meeting here. My comments start at 4:09:52.


I want to start by saying thank you to all of the community members who have weighed in on this project. My office has received hundreds of letters from concerned residents going back to when I first joined the Board in January of last year.
 
I also appreciate all of the people who have spoken out today and yesterday. I know people have strong opinions about the project one way or the other, and I think the decision we make today is critically important for the future of SLO County and more importantly the future of Nipomo.
 
I also want to thank folks for their civility. I truly am impressed with how civil folks generally were in their comments. This makes me proud to represent SLO County.
 
The project before us has the potential to dramatically shape the landscape of this community, and I believe it is imperative that we carefully evaluate this project for the sake of the people who live there now and for the future generations that will live with the consequences of our decision today.
 
For those of you who have written to me or asked me for my thoughts about this project over the past year and half, you know that I have consistently stated that I wouldn’t be taking a position on the project until the hearing. I did this because I wanted to hear all of the public input and review all of the project details so that I could make a fully informed decision. I have kept my pledge, and now I finally will offer my unbridled perspective on this project.
 
But first, a little bit of background. Both times that I ran for County Supervisor, I ran on a platform of supporting workforce and affordable housing. I believe we have a housing affordability crisis in this county, and I have supported making housing a Board priority for two consecutive years. I have worked diligently with our staff and community partners such as the Home Builders Association and my colleagues to advance the housing implementation plan that our Board recently approved in order to help our county facilitate the construction of more housing, and specifically the type of housing that our workforce and low-income residents desperately need. From my time as an Arroyo Grande City Council member to a County Supervisor, I have a record of supporting housing projects and implementing pro-housing policies.
 
However, I also ran on a platform of good governance, thoughtful leadership, and balanced decision making. I believe that housing projects need to meet the needs of our community while also appropriately mitigating the impacts. We all love SLO County because of our unique environment, beaches, beautiful open spaces, and small-town charm. I support housing projects that harmonize with and respect those important values.
 
I also want to mention that from day one of running for public office, I committed to not accepting campaign contributions from developers – a pledge I have kept going back to 2017. I want to be clear that I don’t have anything against developers. They play an important role in our society, and we need developers to build the housing projects that help us house our workforce. I haven’t accepted their money because I want to remain completely impartial about any housing project that comes before me, including this one. I want you - the public – to know that you can trust me to act in their best interests and in the best interest of our community. How I vote on this project today will be grounded in what I truly believe is the right thing for Nipomo. As I mentioned yesterday, the question I am asking myself is: is this project as proposed good enough for Nipomo?

And with that, let’s get into it.
 
I will start by sharing some of the things that I like about this project.

  • I generally like the location of the project, given its access to Highway 101
  • I like that 30% of the housing in the project provides housing opportunities for low-income and moderate-income households – that is, the type of workforce and affordable housing we need.
  • I like the idea of a first-time homebuyers down payment assistance program – even though it will only help a limited amount of people.
  • I like the fact that the developer is willing to donate land for a Cuesta College South County Campus. I’m not sure if securing the resources for building that campus will be a challenge for Cuesta, but the land is a start. 
  • I like that the developer is willing to donate land for a fire station and a sheriff’s substation – although the Sheriff’s substation is being constructed in Olde Towne on County-owned land and there is no funding to build the fire station.
  • I think the overall traffic impacts associated with this project are problematic, but I do believe that the two collector roads connecting Willow to Frontage Rd and Pomeroy will be a benefit to Nipomo.
  • I like the local hire preference that supports hiring local workers.
  • To be clear, I am not opposed to housing and commercial development at this site; I just think there is a win-win to be had here, and the project as proposed does not get us where we need to go.

While there are meaningful benefits associated with this project, there are several serious impacts as well. Moreover, we need to look at this project in the broader context of the community of Nipomo. Good governance and responsible decision-making compel us to consider Nipomo’s current and anticipated needs. In other words, a project of this size – roughly 25% of Nipomo’s current population – cannot be considered in a vacuum.
 
I have serious concerns over several aspects of this project, including the type of housing it’s proposing, the water it is relying on, adverse environmental impacts, implications for public safety, and fiscal impacts to both the County and the Lucia Mar Unified school district.
 
Only 30% of the housing proposed in the Dana Reserve project is the type of housing we need. Per our Regional Housing Needs Allocation numbers, the state is mandating that the County plan and permit for about 1,900 low- and moderate-income housing units by 2028. Only 30% of the total units in this project fulfil that requirement, which means 70% or 1,022 of the 1,470 proposed units aren’t the type of housing that the state is requiring us to build. The rest will be more high-end homes that are unattainable for the vast majority of the people who live here.
 
We’re being told that the only way to build the low-income housing that we need is by accepting that it comes with 70% of the housing we don’t need and all of its associated impacts– because that is the only way a developer can afford to build it. Yet, we know this is not true. Just earlier this year our Planning Commission approved two infill projects in Nipomo that will produce exactly the type of housing we need without the luxury homes: 384 low income and multi-family homes. This is exactly the type of housing we need for those struggling to afford to live here.

Concerns Regarding Long-term Water Supply

Long-term water supply, groundwater shortages, and drought potential are concerns that are often raised about this project. As we discussed yesterday, the water supply for this project will come from the Nipomo Community Services District. Specifically, it will come from water imported from Santa Maria. Letters were submitted by the Northern Cities Management Area and Golden State Water Company expressing concerns related to the water situation in Nipomo, namely that the Key Well Index results for the past seven years show that the Nipomo Mesa Management Area is in Severe Water Shortage Conditions. This means that we are over-pumping the basin. Golden State expressed their view that the 500-acre feet of water identified in the project documents as available to serve this project is only allowed to serve infill development within the NCSD’s service area as opposed to new development to be annexed into the service area such as is the case with this project. We heard from the General Manager of the NCSD that they disagree with Golden State’s assertion. However, as I pointed out yesterday, the environmental impact report for the Supplemental Water Project seems to very clear that the water was supposed to serve infill development not development to be annexed, when it states, and I quote, “This initial increment of imported water will, therefore, serve existing customers within the NCSD boundaries … An additional 500 acre-feet per year of imported water…will be used by the NCSD to serve future customers on currently vacant land within the District boundaries.”
 
The disagreement between the two water purveyors has serious implications that I believe should give our Board pause before approving the project. Water security for Nipomo is very important. In addition, there are legitimate fairness concerns that need to be addressed. As I mentioned yesterday, I have heard from several developers who own land within NCSD’s sphere of influence who have been told that NCSD cannot provide water for their projects. In one case, the developer is considering building a 100-unit mobile home park. In another case, the developer wants to build affordable and workforce housing.
 
I have heard of similar issues with customers in the Golden State service area in Nipomo. Dozens of them would like to build housing or accessory dwelling units on their vacant property but cannot get a will-serve letter from Golden State due to local water shortages. These are infill parcels within the Nipomo Mesa Management Area – precisely the type of development that the Supplemental Water Project environmental impact report indicated should be served with the 500-acre feet of water that is now being set aside for the Dana Reserve project.
 
In my view, the underlying water policy decisions associated with the Dana Reserve project don’t seem fair to the people who want to build more of the type of housing we actually need. It also doesn’t seem fair to the people with vacant land who can’t get a water meter in Golden State territory.
 
Lastly, I will note that relying on imported state water is a risky long-term strategy. While the last two years have been wet and the Department of Water Resources has approved significant state water allocations, state water allocations were 0% as recently as 2021. The potential for a future severe drought cannot and should not be overlooked when approving a project with an anticipated demand of nearly 350-acre feet of water per year.

Environmental Concerns

As we’ve heard from several organizations and many members of the public, the environmental impacts of this project are significant, and in my view, unwarranted. The EIR identifies nineteen Significant Unavoidable Adverse Impacts in the proposed plan to Air Quality, Biological Resources, Greenhouse Gas Emissions, Land Use and Planning, Population and Housing, and Transportation.
 
I have never seen this many significant adverse impacts on a single project, and I think they should give any decision-maker pause. Our Board will have to adopt a statement of overriding considerations in order to approve this project. In plain terms, our Board has to say the benefits of this project outweigh all of the negative impacts. I am simply not convinced that the benefits of approving a project that contains a mere 30% of the type of housing that we need outweighs 19 significant and unavoidable impacts.
 
If we take just the issue of oak trees, the project will cut down more than 3,000 mature oak trees – this action is in direct violation of our County’s Oak Woodlands Ordinance. Why have an ordinance protecting our oak woodlands if we’re going to override it so easily? And if this project is approved today, I worry that it would set a negative countywide precedent going forward. I think the message that it would send is that none of our oak woodlands are safe from potential destruction.
 
Further, I appreciate that the developer has offered to preserve thousands of oak trees at the nearby Dana Ridge. However, having personally walked that very steep site, I can tell you that it is not land that could be developed. Therefore, I do not think that it can count as a true offset.
 
I think it is important to give you a flavor of the scope of significant and unavoidable impacts, also known as Class I impacts:

  • Implementation of the proposed project would further divide the jobs-to-housing balance within the project area and adversely affect the local jobs-to-housing ratio.
  • The project would result in a cumulatively considerable net increase of criteria pollutants in exceedance of established San Luis Air Pollution Control District daily emissions thresholds, resulting in a significant impact.
  • The project could directly or indirectly impact special-status plant and wildlife species, resulting in a significant impact.
  • The project could directly and indirectly impact California Rare Plant Rank 4 and Watch List plant species, including California spineflower, sand buck brush, and sand almond.
  • The project would result in the loss of 35 acres of Burton Mesa chaparral habitat on-site.
  • The project would result in the loss of approximately 75 acres of coast live oak woodland habitat on-site.
  • The project would induce substantial unplanned population growth in the Nipomo area, resulting in a significant impact.
  • The project would result in a cumulatively considerable impact to transportation and traffic, resulting in a significant cumulative impact.

In sum, I do not believe that benefits of this project outweigh the environmental impacts.

Public Safety Concerns

For a population of 24,000, the Nipomo Mesa does not have the resources it needs right now to be a thriving SLO County community. This is especially the case when it comes to Public Safety. We heard from the Sheriff yesterday that he currently lacks enough deputies to patrol Nipomo and the broader south county region. The Sheriff’s Office has estimated that, in order to serve the 4,500 people that the Dana Reserve project would add to Nipomo, they would need an additional ten deputies and two sergeants, along with a number of support staff positions. I will discuss the fiscal impact concerns more in a moment, but there are serious questions as to whether this project will generate enough tax revenue to pay for the public safety needs that the project will generate.
 
As a reminder, this project does not include a new Sheriff’s Substation or a new Fire station – just the donation of the land for both. Building and staffing these absolutely necessary public safety facilities will be the responsibility of the county taxpayers.
 
While I am hopeful that we will soon be able to separately finance the construction of the new Sheriff Substation in Olde Towne, this project emphasizes just how significant Nipomo’s current needs are – let alone the anticipated needs and likely shortfall if this project is approved.

Fiscal Impact Concerns

As noted yesterday, I have concerns about the fiscal impact of this project on the County budget, especially in light of the NCSD’s request for a percentage of the annual property taxes generated by this project.
 
Our fiscal analysis already shows that approving this development could result in a net loss of $600k per year to the County – in other words – the development would not generate enough revenue each year to pay for the cost of services for the new residents of the project. The developer claims that is a worst-case projection, but that estimate does not include the percentage of annual property taxes that the NCSD is requesting from the County. If we grant their full request, which they have indicated to me is necessary for them to be able to serve the project, it would cause the County to lose $295,000 per year in the best-case scenario and $1M per year in the worst-case scenario. It does not sit well with me that this request is being handled as a separate matter. I think we should be making that decision at the same time as this decision with all of the information in hand. The fact that the NCSD’s general manager could not even answer what they would like the money to be used for was concerning to me.
 
I find it difficult to understand why the County and our Board would give up that much needed revenue, which could go to staffing more patrol deputies or firefighters in the community, especially when we know we are already under-resourced in those areas.
 
From a big picture perspective, I question why we would approve a project that won’t supply the deputy sheriffs we need, won’t supply the firefighters we need, and won’t provide the facilities they need to do their jobs?  
 
To me, it is not a good project if the taxpayers are being asked to literally subsidize the developer. And that is the way the math adds up to me.
 
To summarize the math, I’m looking at a best-case scenario of the County losing almost $300,000 per year to cover the cost of providing County services. As mentioned, in the worst-case scenario, the County would be losing $1M per year. In addition, I do not see a plan for funding the minimum year over year cost of $1.9M for the Sheriff for the ten new deputies and two sergeants and support staff, or funding for the $2.1M for fire to staff and operate the new station with firefighters. I also do not see a plan to fund the $15M in capital costs for the new fire station or the $1.5M in one-time costs for the new fire engine and other equipment. Focusing solely on the yearly operational costs, we see a public safety need of about $4M. Again, the study included in our staff report estimates that the project will generate only $2.2M per year for all public safety needs which includes DA services, jail services, probation services, and other County public safety services. That is a $1.8M year over year operational gap.
 
Therefore, while the developer claims that the project will not pencil out if it is scaled back in any way, I am concerned that the project as proposed does not pencil out for the County taxpayer.
 
In addition, I want to emphasize how real the fire risk is in Nipomo and why we need to fully fund firefighting resources. The 2013 SLO County Fire Strategic Plan states the following:
 
“Terrain contributes significantly to the weather in the County. For example, the terrain in the southern portion of the County can affect intensity of north and east wind events resulting in a light Sundowner effect on the coast side of the range. The area east of Nipomo is known by firefighters as an area of unpredictable wind changes, as the influence of the Pacific Ocean and the inland valleys converge. This area was the location of the tragic Spanish Ranch Fire, which killed 4 CAL FIRE firefighters in 1979, and where two near-tragedies occurred during the 1997 Logan Fire. A contributing factor on both these fires was ‘a sudden wind shift.’ Although sundowners occur infrequently and usually only in the Nipomo area, the same high pressure inland conditions that produce Santa Ana winds in southern California often produce katabatic winds in this County that result in northeasterly off-shore wind conditions which are usually accompanied by warm temperatures, high wind speeds, and low humidity’s. These periods often produce the most ‘fire days’ along the coast when the fire risk is elevated to the highest point of the entire year.”

School Impact Concerns

I am also concerned about the likely negative impact that this project will have on the Lucia Mar Unified School District as it tries to prepare to serve a massive influx of new students. Lucia Mar’s Board of Trustees recently approved a mitigation agreement that contains a range of possible outcomes. At best the project has a revenue neutral impact on the schools. However, the worst-case scenario estimates a $4.7M to $3.9M revenue gap for the school district. 
 
Even if the necessary school facility improvements are funded, getting the students to school will be a significant challenge. While I am grateful that the developer is funding drop off area improvements at Dana Elementary, there is no continuous sidewalk or safe route for students to walk to school. Access for high schoolers is no better. Both of Nipomo’s two high schools are on the other side of the freeway and students will not be eligible to ride the bus due to their close proximity to the schools. The project does not propose any safe routes along Willow and Thompson. In essence, the project is likely to add hundreds of new students with no clear plan for how to get them to school safely. Many other developments seem to do better in terms of connectivity to schools, parks, and other important locations.

Project Concerns in the Context of Nipomo

As I mentioned earlier, we need to look at this project in the broader context of the community of Nipomo – not just the details of the project in front of us.

First, I do not believe the project as proposed meets the community’s needs.

Nipomo is already an underserved community. Many of its needs are well established: more park space (including a new dog park, pickleball courts, tennis courts, basketball courts, sport fields and trails); a community center – the last one burned down and was never rebuilt; a Sheriff’s Substation, and a third Fire Station.
 
When I look at the Dana Reserve project in the context of Nipomo’s existing needs, it just doesn’t meet the mark. The reality is that the project doesn’t address any of those existing needs.
 
It includes some passive parks, but no new active recreation opportunities or a community center.
 
It offers land for a Cal Fire Station and a Sheriff Substation, but it doesn’t offer to build either of them. The same goes for the Cuesta College campus and the People’s Self Help Housing affordable housing project. All that the developer is offering is the land and an improved pad.
 
Even the location of this project doesn’t fit well within the long-term vision for Nipomo. Olde Towne – which is ripe with potential – is on the opposite side of the freeway. This project proposes a sizable commercial center far away from the Olde Towne commercial area. In hundreds of conversations with people in Nipomo over the years, almost everyone I’ve talked to agrees that investment and revitalization of Olde Towne Nipomo should be a priority. This project offers nothing for Olde Towne, and may even hurt its ability to grow as it competes with new commercial spaces within the Dana Reserve project.

Second, I don't think that Nipomo should have to shoulder the burden of new housing in Nipomo.

I want this Board to acknowledge that Nipomo has already been shouldering the burden for new housing in the unincorporated areas for the better part of the last two decades.
 
Even recently, Nipomo has seen the bulk of new growth. Earlier this year, the Planning Commission approved two multi-family developments that will add 400 homes, in addition to 300 new homes coming soon to Trilogy. Plus, other developers are working on trying to build at least another 600 homes in Nipomo. Thus, without the Dana Reserve project, 1,300 hundred homes are in the works, which is equivalent to the number of units this project will add – and most of that housing is the right type of housing – the kind of workforce and affordable housing we need.
 
Yes, our region needs housing, but along with that much-needed housing comes the impacts to traffic, water, air quality, our schools, our parks, our libraries, and our public safety. We are literally talking about adding thousands of people to the already burdened and under-resourced community of Nipomo, and that doesn’t even include the 4,500 people the Dana Reserve project will add if approved today.
 
Have we analyzed the cumulative impact on Nipomo of all these housing projects that are in the pipeline? I think the answer is pretty obvious that we haven’t. We’re just starting the process of updating the Nipomo Community Plan, which has not been updated for 30 years – something that should have been completed long before a project of this size was before us for approval.  
 
In addition to approving this project, we’re being asked to set aside the growth cap that is on our books without any supporting information for decision-making. The ordinance says we provide a resource management report twice a year yet this report hasn’t been provided since 2018.
 
In short, it seems like the bulk of the County’s responsibility to plan and permit for more housing continues to be primarily borne by the residents of Nipomo. I think as a Board we should be asking ourselves if that makes for a safer or better served Nipomo. I don’t believe that it does.

Third, I believe the Community Alternative is a Win-Win for Nipomo.

Despite the significant number of serious problems with the Dana Reserve project as proposed, I do believe there is a path forward to modify this project into something that everyone can get behind. In other words, I believe we could turn this project from a win-lose into a win-win, where we are able to strike a balance.
 
The community of Nipomo has already demonstrated that it is possible to strike a balance with their Community Generated Alternative Map. As we’ve heard from the community members who developed it, the Community Alternative Map provides less housing while dramatically reducing project impacts. However, “less housing” doesn’t do it justice, as 800 housing units is almost the size of Trilogy on a third of the acreage. The community plan would still result in a very large housing project that, if refined with more of an emphasis on affordable and workforce housing, would give our county a greater concentration of the type of housing we actually need, while at the same time preserving oak woodlands and natural resources. To me, that is a win-win.
 
As a reminder, the Planning Commission directed these community groups to do this. They listened to the hundreds of Nipomo residents who either spoke or wrote letters of opposition to the Dana Reserve project and told the Nipomo Action Committee, the South County Advisory Council, and the Nipomo Oak Alliance to work with staff and the developer to come up with a plan that the community could support.
 
And they succeeded.
 
What we’ve heard during public comment at these hearings and from emails and letters over the last few months is that the people of Nipomo are ready to say YES to more housing, even a lot more housing – they just want it to be done in a responsible manner. They want a housing project that provides housing while at the same time preserving the oak woodlands that are foundational to the character of Nipomo.  They want balance, and the community plan does that.
 
Now of course, the community plan is really just a concept. It would need to be fleshed out with more detail in order for it to be earnestly evaluated. And frankly I’m not surprised that the developer has labeled it as infeasible largely based on its failure to meet “project objectives.” However, the project’s objectives were defined by the developer. I find this over-reliance on compliance with project objectives to be very concerning. And as I mentioned earlier, we’ve already seen other affordable and workforce housing projects in Nipomo that didn’t rely on building hundreds of luxury homes in order to make the project feasible.
 
The developer’s fiscal analysis of the alternative raises a number of questions. For example, why the hotel and retail space of the project costs $10M more in the alternative plan than in the current plan. That difference by itself seems like it would account for the entire negative $12M valuation that the developer cites in order to claim the alternative infeasible. Even assuming the developer’s analysis that the community alternative plan is grossly infeasible, we could reevaluate the fee credits for infrastructure improvements that the developer could claim but is opting not to. The Road Improvement Fees that they’ll be paying are almost $13M alone, and I understand that the infrastructure the developer is adding is a major cost impediment to the project’s overall feasibility.
 
All this to say, I firmly believe that if the developer were truly willing to pursue a project with fewer impacts, we could reach the win-win outcome that everybody could get behind.
 
To that end, I would be happy to make a motion, at the appropriate time, to direct staff and the developer to explore additional project alternatives that align more closely with the community alternative plan for review that would be re-evaluated at the Planning Commission level.
 
I do not know if a majority of my colleagues are supportive of that direction, but I believe that is the most responsible action that we could take today.
 
I’ll conclude my remarks by reminding everyone what I promised when I first ran for supervisor. I promised to vote in a way that balances economic, social, and environmental interests. The hard truth is that this project as proposed is out of balance. The environmental and social interests and concerns are being subordinated in favor of the economic interests.
 
Going back to 2017, I’ve knocked on thousands of doors and had countless conversations with Nipomo residents. I’ve reviewed hundreds of letters, attended meetings with hundreds of people, and met with dozens of constituents. I’ve been listening to the people of Nipomo, and they have been saying loudly and clearly that they want balance. Like them, I just don’t accept that there is no way to make a more balanced housing project work here.
 
I know we can make this project better, and I am ready to enthusiastically support a more balanced project that builds hundreds of the housing units we need. I ask my colleagues to join me in considering what is best for the people who live in Nipomo now as well as the people who will move into the housing that we approve. Nipomo deserves better than the proposed project with its nineteen significant and unavoidable impacts. I believe we have a unique opportunity and obligation to re-work this project into a better project, a stronger project that will accomplish this board’s goal of supporting more workforce and affordable housing and address the concerns raised by members of the community. The Community Alternative Map is a good start to that discussion.
 
That concludes my remarks. Thank you.

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© Jimmy Paulding for County Supervisor 2022
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