Landowners who once sold the Santa Monica Mountains Conservancy their rustic, undeveloped property off Malibu Canyon Road in a $3 million deal are back in possession of the land, after foreclosing on it last week. And taxpayers are out $1 million.
The conservancy’s purchasing arm, the Mountains Recreation and Conservation Authority, made a $1 million down payment on the entire tract of land off Piuma Road in January 1995, using funds from Proposition A, approved by voters in 1991 for parkland purchases. The state agency also issued a promissory note, due in January of this year, for $2 million, the balance of the purchase price.
Rather than pay the note when it became due, however, the conservancy reappraised the property as parkland for $1,800,000. The conservancy told the note holders that it would adhere only to the later appraisal and consequently would pay only the $800,000 difference over the down payment, plus interest.
The nine families who sold the land and held the promissory note during the conservancy’s possession refused the conservancy’s new purchase terms and initiated foreclosure proceedings in February. The families originally planned to build homes on their different parcels, and the property was initially appraised for the conservancy transaction according to its development potential. Appraising the property a second time as parkland substantially lowered its value.
Harry Dempster, one of the nine landowners, said the purchase terms were locked in at the time of the down payment and the conservancy should have honored those original terms.
For the conservancy “to have it for awhile, and then say, ‘Now we want to pay less,’ I don’t know what they’re thinking,” said Dempster. The land was offered at public auction last week, but no bids were made on it, so it was returned to the original landowners. The nine landowners also kept the $1 million in public money. “They thought they could bully us into taking less money,” said Dempster.
The property owners say they again plan to divide the five existing parcels into 10, on which they plan to build 10 homes. The conservancy opposed the development from the beginning, which was why the agency purchased the land in the first place. The property owners say they anticipate further opposition from the conservancy, and they plan legal action if the agency thwarts their development plans. Susan Shraibati, another landowner, said she has spoken with the conservative Pacific Legal Foundation about their case. The foundation is best known for its involvement in property rights cases. “They will step in if they won’t let us develop,” she said.
The conservancy did not return calls seeking comment.