Less than 20 years ago, Continental Ranch was a failed concept - a vacant swath of weed-choked lots suspended in limbo between the over-reaching ambitions of Charles Keating and his American Continental Corp. and federal regulators who took over during the savings and loan scandals of the 1980s.

With little discussion, the Marana Town Council Sept. 16 approved a preliminary plat that cleared the way for development of the last large tract of land available for residential use in Continental Ranch, which has grown to more than 7,000 households and become the town's population center.

Fittingly for Continental Ranch, which saw several fights over development during its years of busiest growth, the plan for the last significant subdivision carries its own degree of controversy.

The Pima Farms Village project planned by Diamond Ventures seeks to place an undetermined amount of homes on 156 acres near the northeast corner of Scenic Drive and Pima Farms Road.

The proposed development lies adjacent to Diamond Ventures' massive Continental Reserve, a veritable sea of subdivisions now under construction that neighbors opposed in 1999 and managed to have reduced from 2,257 homes to a maximum of 1,875.

The parcel of desert that is slated to become Pima Farms Village sits below the foothills of the northern extension of the Tucson Mountains. Environmentalists see the stretch of cholla cactus and creosote and the wash that runs though it as the area's last corridor for wildlife migrating between the mountains and Saguaro National Monument to the west and the Santa Cruz River to the east.

The project, which Diamond Ventures has said will retain 100-foot and 50-buffers around the property and a sizable conservation easement, also sits in what had been federally designated critical habitat for the endangered cactus ferruginous pygmy owl.

Neighbors living along barely paved Scenic Drive, including a guest ranch that has operated since 1936, face encroachment on a neighborhood that has enjoyed a rustic character despite the steady growth along Silverbell Road below them.

The project is "hard zoned" under plans for the Pima Farms Specific Plan approved by Marana in 1989, leaving opponents little leverage in stopping or significantly reducing the size of Pima Farms Village.

The Pima Farms/Scenic Drive Neighborhood Association formed in 1989 to oppose the town's specific plan. It battled its way to the Arizona Supreme Court that same year in a vigorous but mostly unsuccessful attempt to tighten the zoning requirements for the area.

Now, with most of the available land in the area under development, the association has become more of a "loose-knit" group of neighbors, said former association president Robert Ferreira.

"It is the last one, and that's kind of why we're relaxing a little bit," Ferreira said of Pima Farms Village. "This is hard zoning, so we really didn't have much say. We would like to see it be much lower density, but the buffering that they are offering with the conservation easement is certainly something to be thankful for."

Neighbors and environmentalists have attended a series of meetings with the developer intended to air their concerns and possibly mitigate the impact of the development, and Ferreira said he thinks the neighbors gained some concessions.

Michael Racy, a representative of Diamond Ventures who is also a lobbyist for Marana and Pima County said he understands the neighbor's concerns.

"They have concerns and I don't blame them at all. They would rather see the area undeveloped, but most of them have recognized that development there is kind of inevitable," Racy said. "We've had pretty good meetings with them and we think a lot of the concerns can be accommodated."

Some accommodation has already been reached with the owners of the Lazy K Bar Guest Ranch, 8401 N. Scenic Drive, although it didn't come smoothly at first.

Through a court action and resulting settlement three years ago, Lazy K and Diamond Ventures reached an agreement that provided the ranch with an easement through the desert between the two for use as an equestrian trail.

Diamond Ventures' development plan codifies the 40-acre easement for the Ranch and helps preserve the Lazy K's future operations, said Jim Shiner, co-owner of the ranch.

"We don't object to it. I think it will preserve the ability of the Lazy K to continue as a dude ranch in perpetuity," Shiner said. "We are no longer, and haven't been for a number of years, a remote ranch. The important thing to us is that the quality of our (horse) rides are preserved. But with the easement and access to Saguaro National Park's 24,000 acres, I think we're well protected as a dude ranch."

Harder for Diamond Ventures to accommodate will be the concerns held by environmentalists.

"I have great concerns about the watershed and the habitat corridor. There's a fragmentation of the habitat corridor that's occurring. It's the last stretch of space that won't have rooftops and pavements on it," said Barbara Rose, a Scenic Drive neighbor and a member of the Safford Peak Watershed Education Team, a Marana organization that promotes conservation and the use of renewable resources.

Christina McVie, director of the Tucson-based conservation group Desert Watch, said the development of Pima Farms Village has ramifications that extend far from the immediate development.

"It's a matter of connectivity, not just for the pygmy owl, but for a whole host of species that use that area to move between the Santa Cruz and regions beyond and the Tucson Mountain range," McVie said. "Being the last parcel in that immediate region has a lot of implications for wildlife. Its development serves to isolate the remaining natural areas and leads to a loss of biodiversity."

Racy said the recent court decisions over the fate of the pygmy owl make it unclear what environmental guidelines the development may have to adopt, but the project is proceeding with recommendations that were made by the U.S. Fish and Wildlife Service.

"We've worked closely with the Fish and Wildlife Service and we're voluntarily maintaining a large amount of open space, dedicating conservation and equestrian easements and buffering the project along the wash. Overall, we have done a great deal to be sensitive to the environmental concerns," Racy said.

Ed Stolmaker, executive director of the Marana Chamber of Commerce and a Scenic Drive neighbor, said he believes Diamond Ventures deserves credit for "going the extra mile" to meet with those who harbor concerns about the project.

"They've really taken a proactive approach and are trying to address the concerns raised by the different groups. They've held meetings in the neighborhood and listened to what people have to say I really applaud their efforts," Stolmaker said.

Some neighbors have also claimed the Pima Farms project is an "end around" the maximum housing limit Marana set for Continental Reserve in 1999 after residents threatened to recall the town council over the project's size.

Racy said the Pima Farms Village project was separate from Continental Reserve and the number of homes expected to be built in both developments will still fall under the cap set for Continental Reserve.

"As it's turning out, we're going to have less homes built in Continental Reserve than first projected. We have yet to determine how many homes will be built at Pima Farms Village, but both developments combined will come in under the 1,875 that we agreed to," Racy said.

Brief history of Continental Ranch

The roots of Continental Ranch lie in the post-World War II years when huge tracts of vacant land along the Santa Cruz River were acquired and held as an investment by the Dow chemical company.

The land passed through a string of speculators over the years before being purchased by Tucson developer Lew McGinnis, who envisioned a large master planned community to be named Peppertree Ranch.

McGinnis, who in 1988 pled guilty to four counts of theft for diverting profits from the unrelated Williams Center development in Tucson, barely got Peppertree off the ground before the land was passed to another developer destined for even larger legal problems - Charles H. Keating, of the infamous savings and loan scandal of the 1980's.

Continental Ranch's name is derived from Keating's holding company, American Continental Corp., which collapsed along with Keating's Lincoln Savings and Loan in the mid-1980s.

The federally supervised Resolution Trust Corp., which oversaw the liquidation of Keating's holdings, acquired the Continental Ranch property in 1987. Under the RTC, the land lay dormant for years, with only a handful of homes.

In 1992, the bulk of Keating's undeveloped 1,600 acres was acquired from the RTC by Southwest Value Partners Ltd. for about $10 million. SVP parceled out much of the property to several national and regional home builders that constructed the subdivisions that exist today.

SVP, which remains a major land owner in Marana, is a partnership headed by Omaha, Neb. building tycoon Millard Seldin and former National Bank of Arizona President Robert Sarver. The corporation has become one of the largest private sector land holders in downtown San Diego, where it poured more than $500 million into acquiring skyscrapers and office properties during the 1990s.

Marana annexed 2,100 acres of the Continental Ranch in 1987 and it has since grown to contain almost half of Marana's population of 16,500.

The platting of the 165-acre Pima Farms Village by Diamond Ventures leaves only a handful of 10 and 15 acre parcels available for residential development, according to representatives of SVP, Diamond Ventures and Marana.

The large desert area southeast of Silverbell and Cortaro Road may see some small residential development if erosion control permits are obtained from the federal government, but most of the land is earmarked for commercial, governmental and park uses.

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