Diablo Grande go-ahead hinges on water source

John Holland, Modesto Bee, California, 27 August 2001

The hotel at Diablo Grande could start to rise by the end of the year, a dozen years after planning started on the hillside community southwest of the West Side community.

The developer of the vast property - subject of a legal battle that one critic says is not over - could begin construction on the first few hundred homes in mid-2002.

"We are hopeful to start construction of the hotel sometime this year, although it could be pushed to the first part of next year," said attorney Russ Newman, who represents developer Don Panoz.

The seven-story, 200-plus-room hotel could be completed about 18 months after ground is broken, Newman said. It is the centerpiece of a 29,500-acre project that within 25 years also could include 5,000 homes, six golf courses, restaurants, stores, a town center and extensive open space.

The site already has two golf courses, plus vineyards and a small winery. The hotel is scheduled to be built at the same time as a conference center, spa and larger winery.

The lawsuits mainly have been over getting water to this semi-arid site. An appellate court in May upheld most of the plan, but it ordered that a portion of the environmental report be recirculated for public comment because of the late submission of an engineer's analysis of an alternative water supply.

Steve Burke of Modesto, one of the plaintiffs, said construction cannot move forward until the report gets another round of comment.

"(State law) provides for having to analyze the impacts and mitigating them, and frankly, that hasn't been done," he said.

Burke said he will press this point when the environmental report is recirculated, rather than seeking a court order to stop the construction.

Burke also contends that the chosen water supply - a California Aqueduct allotment that used to go to Kern County - is unacceptable because of another court's finding that the entire State Water Project has committed more water than it can deliver.

Stanislaus County Planning Director Ron Freitas said the report must be recirculated before the bulk of the development begins, but construction can begin on the hotel and first 313 houses "as long as they can show the water source."

The connection to the aqueduct was completed in the spring, and Diablo Grande stopped using wells to irrigate the golf courses.

Construction of the water treatment plant could begin in the spring, Newman said. Other work in the near future will include a sewage-treatment system and about three miles of road connecting to the Sperry Road interchange on Interstate 5.

The 313 homes are likely to be built over a couple of years. They are among the 2,038 homes in the development's first phase, which is expected to be built over five to 10 years.

"We really haven't done any public advertising, and yet we have a lot of reservations (for lots) taken already," Newman said.

The developer has signed a contract with Schuler Homes of the Bay Area to build the first 100 or so homes.

A groundbreaking celebration for the hotel will be announced when the plans firm up.

"It's going to be a great addition to our community," Newman said. "We don't have anything like this in our county, and it's going to be wonderful."