The Coastal Act does not allow destruction of a designated environmentally sensitive habitat area simply because the destruction is mitigated off-site, the Fourth District Court of Appeals has ruled. The court also determined that residential development of wetlands and removing a pond to build a road were not permissible under the Coastal Act. The decision stems from the 25-year controversy over Bolsa Chica, a 1,588-acre area of wetlands and coastal mesas near Huntington Beach where developers have sought to build. In reviewing challenges from the environmentalists and developers over the Local Coastal Plan approved by the Coastal Commission, the appellate court sided with the environmentalists in every instance. Paul Horgan, attorney for the Land Trust, called the ruling "the most definitive decision concerning wetlands that I've seen from an appellate court." The case marks the first time an appellate court has tackled the issue of building on a portion of a wetlands under the theory that the rest of the wetlands would be spared and improved, he said. The court said the Coastal Act prohibits the trade-off approved by the Coastal Commission. Justice Patricia Benke quoted the trial court decision: " ‘The Commission's interpretation would open the door to any type of development in a wetland whenever a finding could be made that funds were otherwise unavailable to restore degraded wetlands.'" In 1985, Orange County and the Coastal Commission approved a 5,700-unit residential development, a marina, a 600-foot-wide navigable ocean channel, and oceanfront hotels and shops. After outcry from environmentalists, a public-private coalition worked out an LCP that the Coastal Commission approved in 1996. The LCP eliminated the marina and navigable channel, reduced the number of homes to 3,400, and expanded the open space and wetlands restoration to 1,300 acres. By late 1997, the number of homes was scaled down to 1,235 and homes were eliminated from the wetlands. The Bolsa Chica Land Trust sued over the LCP. The land trust argued that replacement of a eucalyptus grove with nesting poles and other trees in a public park was impermissible. The land trust also argued the Commission could not allow residential development of a lowland as a way to finance wetland restoration, and the Commission could not approve elimination of Warner Pond to accommodate Warner Avenue widening. San Diego County Superior Court Judge Judith D. McConnell sided with the land trust regarding the lowland development and Warner Pond, but approved relocation of the bird habitat. Judge McConnell remanded the entire LPC to the Commission for further proceedings. The land trust appealed the bird habitat portion of the ruling, while the Coastal Commission, Koll Real Estate Group and Signal Bolsa Corp. appealed the rulings regarding lowland development and Warner Pond. The unanimous three-judge panel upheld the decision to prevent houses on the lowland area and to prevent destruction of Warner Pond. The appellate court reversed the trial court regarding the bird habitat. The Commission itself identified the 6 1/2-acre eucalyptus grove as an environmentally sensitive habitat area within meaning of the Public Resources Code § 30107.5. At least 11 species of raptors nest in the trees or use them as lookouts. The Coastal Act provides heightened protection to ESHAs, the court ruled. Justice Benke cited Sierra Club v. California Coastal Commission, (1993) 12 Cal.App.4th 602, known as the Pygmy Forest case. "We have found that under both the Coastal Act and CEQA: ‘ "The courts are enjoined to construe the statute liberally in light of its beneficent purposes. The highest priority must be given to environmental consideration in interpreting the statute,"'"Justice Benke wrote. All sides agree the eucalyptus grove is unhealthy, but that does not mean it receives less protection as an ESHA, the court said. Furthermore, the court rejected the argument that transferring habitat values to a different location is allowed under § 30007.5 in this instance. No one proved why preservation of raptor habitat at the existing location is unworkable, the court wrote. As for the wetlands, the Commission allowed residential building in portions because development would fund needed restoration in other degraded portions of the wetlands. The trial court, in interpreting § 30411, disagreed with the Commission's reasoning, as did the appellate court. If the Legislature had intended to permit residential development in wetlands, it would have said so unambiguously, the court ruled. The appellate court said Warner Pond must be protected because roadway expansions into a wetlands "are permitted only when no other alternative exists and the expansion is necessary to maintain existing traffic capacity." In this case, Warner Avenue was being widened to accommodate future traffic, the court said. The ruling will again slow Bolsa Chica development because the Coastal Commission must revise the LCP. However, because the developers have agreed to sell all the wetlands to the state, the ruling may not significantly affect the most-recent development plans. The Case: Bolsa Chica Land Trust v. Superior Court of San Diego County, Nos. D029461, D030270, 99 C.D.O.S. 2821, 1999 Daily Journal D.A.R. 3619, filed April 16, 1999. The Lawyers: For Bolsa Chica Land Trust: Paul Horgan, (213) 622-2717. For California Coastal Commission: Jamee Jordan Patterson, deputy attorney general, (619) 645-2023. For Koll Real Estate Group and Signal Bolsa Corp., Alvin S. Kaufer, Nossaman, Guthner, Knox & Elliott, (213) 612-7800.