In 1970, Signal Landmark Corporation purchased more than 1,700 acres from the Gun Club and proposed a large scale residential and commercial development, which included plans for more than 5,000 homes and a marina. In 1972, California passed the Coastal Act to protect these at-risk coastal areas. In 1973, it was discovered that a viable wetland existed within the Bolsa Chica lands. This led to Signal Landmark signing off approximately 310 acres of land to the state, who then established the Bolsa Chica Ecological Reserve. The Department of Fish and Game worked to restore the reserve and created two nesting islands with a walk bridge that crosses Inner Bolsa Bay. In 1973, the dam that was built by the Gun Club was replaced with a tide gate and salt water flowed into Inner Bolsa Bay once again.
Over the next 30 years with the combined efforts of governmental agencies, community organizations and the landowner, hundreds of acres of degraded wetlands were set aside for restoration. In 1997, under a state and federal interagency agreement, 880 of the remaining lowland portions of Bolsa Chica were purchased by the state of California using mitigation funds for the purpose of wetland restoration.