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LAKE COUNTY, Calif. — The Lake County Planning Commission on Friday took a major step that moves the Guenoc Valley project forward, approving the new environmental impact report and most permit requests for the large-scale, mixed-use resort and residential development project near Middletown.
The Guenoc Valley Mixed Use Planned Development Project is a luxury destination that at full buildout will include up to 400 hotel rooms, 450 resort residential units, 1,400 residential estates and 500 workforce co-housing units on a portion of the 16,000-acre, 82-parcel Guenoc property, according to the staff report.
The commission certified the project’s updated environmental impact report addressing wildfire risks and evacuation plans, and approved most of its permits and amendment requests, including zoning changes to create a new district for mixed-use development.
However, a motion to rezone part of the project’s Santa Clara site from single-family residential to two-family residential ended in a tie vote. Commissioners Everardo Chavez Perez and Batsulwin Brown supported the rezoning, while Monica Rosenthal and Sharron Zoller opposed it. Commissioner Maile Field was absent for the vote.
“I would prefer not to see the change in density,” said Rosenthal, citing the county’s newly approved housing plan, which aims to reduce the area’s housing density to 2.39 people per house in the next two decades.
“So I have to question why we are proposing four and five bedroom units, and I'd very much like to see that in conformity with the current Middletown Area Plan,” she added.
Deputy County Counsel Nicole Johnson said that the tie vote amounts to an "automatic denial,” and triggers an appeal to the Board of Supervisors, which will hold a public hearing on the project Aug. 26.
Developer Jonathan Breene, one of the project’s three main partners, told commissioners the project could generate $3.8 billion in economic benefits for Lake County over 25 years, including $2.47 billion in labor income, $635 million in local taxes and $212 million in state taxes. It would also create an estimated 2,688 jobs annually.
Plans also include building a fire station operated by Cal Fire and five emergency refuge points.
Kathleen Cutter, wildfire mitigation specialist at UC Berkeley, said onsite facilities and personnel will be essential during fires. “The response time is just a game changer,” she said.
The project applicant, San Francisco-based Lotusland Investment Holdings, has owned the property since 2016. Its owner, Chinese developer Yiming Xu, moved from China to Canada in 1996. Since the early 2000s, he has been involved in various real estate and luxury resort developments in China.
According to the project’s official website, the Guenoc Valley project development is now led by Breene, Indonesian hotelier Adrian Zecha and Yiming Xu’s son, Alex Xu.
Shifting community attitudes
The Planning Commission first discussed the project on July 24 but requested more time for review. Between that meeting and Friday’s vote, some commissioners and community representatives toured the site during visits organized by the developer, as they disclosed.
Unlike in July — where commissioners, local agency representatives and residents mainly voiced concerns about the project over wildfire risks — Friday’s meeting brought mostly support for the project, with no broad objection, though some resistance remained to the higher-density housing proposal.
As she did at the previous meeting, Rev. Julia Bono of Rainbow Church in Middletown “vehemently” opposed the worker co-housing site proposed for Santa Clara Avenue as part of the project, citing the higher-density proposal’s incompatibility with the community’s strong preference for low density, single-family residential character of the town.
Middletown Rancheria Vice Chair Larry Galupe voiced support for the project during public comment. It’s important to continue the conversations about development on the “culturally sensitive sites” for all the tribes, he said. “But I’m very excited about the opportunity of what could happen here for Lake County too.”
Farm Bureau Executive Director Rebecca Harper — who in July spoke against the project’s “significant and unavoidable impact” rezoning 325 acres of farmland — said that she had met with the developer representatives and many of the concerns were addressed.
“A very minimal amount of the agricultural land that's proposed for rezoning will be intensively developed; the majority will remain in ag use,” Harper said during public comment.
Harper also said that the project’s current mitigation measure to offset the loss of agricultural land on other parcels within 100 miles is too broad. “We believe that mitigation should be limited to land within Lake County.”
Questions about local ties and donations
Commissioner Field asked if the developer had made any donations to local communities, specifically mentioning the Lake County Chamber of Commerce.
“The reason I’m asking is I hear things in the community and I want to hear it from the source,” Field said.
Breene replied that Lotusland’s only significant local donation was $1 million in 2017 to assist with post-Valley Fire rebuilding.
Lake County News reported at the time that the donation went to Hope City, a ministry of the faith-based Hope Crisis Response Network in partnership with a number of area churches.
On the same day as Hope City received the call about Xu wanting to make a donation, Xu and the principals of his company introduced themselves and shared their early vision for the Guenoc Valley project over a dinner at Langtry House for dozens of community leaders.
Responding further to Field’s questions, Kevin Case, a partner with the developer, said they joined the Chamber of Commerce about three months ago.
“If it's a donation, we sponsored an event at the Greenview golf club that was asked of us,” Case said, adding that they have also been to several auctions and donated money for auctions “for South Lake Fire, primarily, and for Cal Fire and those fundraisers.”
“Everything’s done in a very ethical and legal manner. So I just want to go on record where we're not reckless at all with that; we're very, very calculated and do it the right way,” Case said.
The discussion at the meeting did not include specific dollar amounts for these activities.
End of legal fights?
By the end of August, the project will go before the Board of Supervisors — once again.
The board first approved the project’s initial Environmental Impact Report, or EIR, in July 2020.
Just two months later, the Center for Biological Diversity and the California Native Plant Society sued the county over the project, with the California Attorney General’s Office intervening in support of them.
In January, 2022, Lake County Superior Court Judge J. David Markham ruled that the EIR was inadequate in its community evacuation analysis.
The Center for Biological Diversity appealed the case, and in October 2024, the California First District Appellate Court ruled that a new EIR must be prepared as the previous document didn’t disclose the project’s wildfire ignition risks.
On July 25 of this year, the Attorney General’s Office issued a letter to Lotusland, intending to confirm that the developer has addressed the wildfire risk and evacuation requirements laid out in a January 2023 settlement agreement.
Then on Thursday — the day before the Planning Commission's vote — the developer and the two environmental groups announced a habitat conservation agreement to protect 3,717 acres of the Guenoc property, alongside implementation of measures to reduce greenhouse gas emissions, with $2 million for additional off-site conservation.
At Friday’s meeting, the developer’s attorney, Robert Hodil, said the agreement means these acreage “will not be developed as part of this project and [will be] preserved in perpetuity, " responding to Lake County News’ question during public comment.
Does this agreement mean the end of legal challenges to the project?
“The groups have agreed not to pursue legal action to challenge Phase 1 of the project, which is the phase of the project that’s up for approval,” said Peter Broderick, urban wildlands legal director and senior attorney for the Center for Biological Diversity, in a phone call with Lake County News.
It does not guarantee the same for future phases, he said.
Email staff reporters Lingzi Chen at
