August 17, 2012 In News

Planned Sand City Beachfront Hotel Wins Court Victory Over Water Permit

By: Larry Parsons Monterey County Herald, Staff Writer

A long-proposed Sand City beachfront hotel-resort won a victory in a state appeals court this week, while awaiting another decision in San Francisco Superior Court.

In a Wednesday ruling, the 6th District Court of Appeal rejected a petition by the Sierra Club to overturn a water distribution permit approved in August 2010 for the proposed Monterey Bay Shores Ecoresort.

Meanwhile, an attorney for developer Ed Ghandour, who has pursued the project for 19 years on 39 acres once used for sand mining, said Friday that he expects a decision soon in a suit against the California Coastal Commission.

Ghandour’s Security National Guaranty sued the Coastal Commission in February 2010 after the commission rejected for the second time a coastal permit for the project. The resort project calls for a 161-room hotel, 180 residential and visitor condominiums, a restaurant, conference facilities and a spa. The design calls for the buildings to be terraced into the dunes in sweeping curves.

Ghandour is asking the San Francisco court to order the commission to issue the coastal permit or to grant the project a new hearing, said his attorney Thomas D. Roth.

That issue has preceded an underlying claim in Ghandour’s suit that the Coastal Commission’s refusal to permit the project represents an illegal taking — an illegal exercise of eminent domain in violation of the takings clause of the Fifth Amendment — that prevents the Sand City property from being developed.

The commission had denied the allegation. In the water permit action, the Sierra Club contended the water district failed to consider potential harm to the Carmel River by issuing the Sand City hotel-resort permit.

The case was the second time the water distribution permit for the project —which originally called for 495 hotel rooms and condos — has been taken through the courts.

The Monterey Peninsula Water Management District board, in early 2009, denied the water permit and Ghandour sued. The appeals court ordered further

proceedings that resulted in the water district permit being approved in August 2010.

Ghandour’s Security National Guaranty has rights to 149 acre-feet of water a year from the Seaside Basin under a court adjudication proceeding. Ghandour and California American Water want to use 90 acre-feet per year of that allocation for the hotel-resort.

In its suit, the Sierra Club contended the water district failed to protect the Carmel River from harm resulting from the hotel-resort’s water use. Cal Am and Security National Guaranty countered there was no evidence that serving the project would alter Cal Am operations on the river.

In its ruling, the appeals court said Security National Guaranty’s rights to Seaside Basin water were separate from Cal Am’s and should have no effect on how the water utility serves its other customers.

The utility is under state orders to develop a new water source for the Peninsula and to scale back its pumping from the Carmel River.

The court said the water district can exercise oversight over water delivery to the hotel-resort to “ensure that no river water will be used.”

It ruled the Sierra Club didn’t point to any evidence indicating the water district’s permit conditions were insufficient to guard against river water going to the hotel-resort.

Roth said, “(The decision) confirms what we have been saying all along — that the permit is valid.”

Larry Parsons can be reached at 646-4379 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .”>