By the sea: West Newport Oil Co. oil pumps occupy portions of Banning Ranch, the large property from West Coast Highway to 19th Street that was recently approved by the Newport Beach City Council for development of homes and other uses.

By the sea: West Newport Oil Co. oil pumps occupy portions of Banning Ranch, the large property from West Coast Highway to 19th Street that was recently approved by the Newport Beach City Council for development of homes and other uses. (July 25, 2012)

As Banning Ranch developers prepare their application for the California Coastal Commission, conservationists are still hoping they will someday be able to buy the ranch's 400 acres and preserve it all as open space.

But after Monday night's 6-0 vote by the Newport Beach City Council, the ranch's owners are one step closer to 1,375 homes and other land uses, approvals that would make the West Newport property much more valuable than it is today as open space and oil fields.

Banning Ranch Conservancy leaders say they aren't daunted. They hope a $5-million anonymous gift announced Monday will be "a game-changer" and "a catalyst for more private donations" that get them closer to the sale price. In 2008 the land was pegged to be valued between $138 million and $158 million.

But the conservancy faces many obstacles. The land owners have a list of conditions they say haven't been met, and experts say the conservancy has a slim chance of raising enough money in the first place, considering the scarce government and private funds available today for open-space acquisitions.

Furthermore, there's competition. More prominent California open-space conservation movements are also competing for some of the same funds.

"Nobody's sitting around with any significant amount of money," Ronald Buss, a real estate consultant specializing in such appraisals, said Tuesday.

Buss, who assessed the ranch in 2008, said assembling a team of donors would be "exceedingly difficult in today's conditions."

Banning Ranch, which stretches from West Coast Highway to 19th Street in Costa Mesa, is one of the last remaining large privately owned coastal properties that's undeveloped in Southern California, and the city's general plan says that the land would preferably be kept as open space. The plan also allows the council to approve the development while people collect enough money to buy the land from the owners, a consortium that includes Exxon Mobil subsidiary Aera Energy.

"Nothing precludes an interested party from submitting a bona fide offer," said Mike Mohler, president of Newport Banning Ranch LLC, the developer.

A list of conditions that Mohler presented at Monday's meeting may preclude some buyers. He said the conservancy would have to show insurance that would indemnify the current owners after the oil wells are abandoned, "in the event corners were cut or the site was not fully remediated."

Also, the owners want the land appraised at its highest and best use, assuming that they could build all 1,375 homes and other facilities.

Terry Welsh, president of the Banning Ranch Conservancy, expects the developers to hit a snag in their Coastal Commission approvals and be forced to sell the land at a lower cost.

"If they have all the authority in the world to build a lot of homes, then the Banning Ranch is worth a lot of money," Welsh said. "Short of that, though, it's just not worth that much."

Council members didn't share Welsh's optimism Monday.

"They own it, and they can set the price wherever they want," Councilman Steve Rosansky said at Monday's special council meeting. He called the $5-million donation an "eleventh-hour hail Mary."

Councilman Mike Henn said he thinks the conservancy's vision is "a long shot."

One source of funding that conservancy leaders hope to tap is from the Orange County Transportation Authority's Measure M program. It sets aside money to acquire or restore natural open space, to make up for freeway construction.

But the Banning Ranch developers pulled the property out of the running in 2010. The Measure M process appraises property based on its open-space value, much less than it is worth with entitlements.

"Banning Ranch owners decided that they were going through the entitlement process for the property and were no longer interested in selling," said OCTA spokesman Joel Zlotnik.

The federal government might be the only entity able to make a dent in the $100-million-plus purchase price, Buss said, but added that it is unlikely that federal funds would be available.

Mayor Nancy Gardner said there are "only so many pots of money" and she would rather see investment in more pristine parts of California.

"If I want to save part of Banning Ranch or the Gaviota Coast, I say Gaviota Coast," Gardner said.

Still, the ever-optimistic Welsh said he expects Newport Banning Ranch to sell at a lower price.

"We have a developer pushing ahead," he said. "When the dust settles, we'll see where we are."

mike.reicher@latimes.com

Twitter: @mreicher