The outlook for a much-debated plan to build homes, a hotel, retail space and parks on the Banning Ranch oilfield bordering Newport Beach is looking gloomier.

The California Coastal Commission staff is recommending that the commission deny a developer’s proposal for the 401-acre Banning Ranch property at its Oct. 7 meeting, according to commission report released Friday.

Newport Banning Ranch LLC, a consortium of three landowners, wants to build 1,375 homes, a 75-room hotel, 75,000 square-feet of retail space and several community parks at the site.

The rest of the property would be restored to natural open space with public trails, according to company spokeswoman Marice DePasquale. The oil field operation would be consolidated in a small area near the center of the site, and the rest of the land would be cleaned of any contamination from the oil field operations, according to project plans.

The development plan was approved by the Newport Beach City Council in 2012.

While oil operations have dotted the Banning Ranch property since it was first tapped in the 1940s, the site still has a “unique array of sensitive coastal species and habitats, including nesting habitat for the threatened California gnatcatcher, a very rare vernal pool system and one of the few remaining significant areas of native grassland,” the Coastal Commission staff report said.

Staff also contend that no government agency has directed the abandonment or remediation of the oilfield, or determined whether the developer’s plan to remove contaminated soil would be appropriate.

DePasquale said the commission staff’s recommendation was “very disappointing.”

DePasquale also said the denial doesn’t take into account that any future public access to the site will be dependent on the owners’ ability to clean up the oil operation, remove invasive plants and provide long-term maintenance of the site. Newport Banning Ranch’s proposal made that possible, she said.

She called it “contradictory” that the Coastal Commission allowed the development of the adjacent Sunset Ridge Park, which is much smaller but on very similar land.

“Our plan takes the fence down,” DePasquale said. “We just really don’t think they’ve taken a look.”

Contact the writer: 714-796-7990 or mnicolai@ocregister.com