The controversial sale of a Malibu beachfront property, purchased solely to trade to the state for development rights, involves a prominent Los Angeles developer, a mayor’s wife, a university and the California Coastal Commission.

The property, owned by Pepperdine University, separates two stretches of private homes on La Costa and Carbon beaches and has been in escrow for more than a year awaiting determination by State Lands as to location of the mean high tide line.

Local developer Jeff Greene says he agreed to buy the property in summer of 1998 for $800,000 with existing approval from Malibu’s Planning Department for a 3,000-square-foot home.

“Pepperdine kept giving extensions to wait for the State Lands survey,” Greene said. “They were acting in good faith. They extended to March 2000.” Pepperdine did request an additional $2,500 a month, which Greene says he paid into escrow.

But earlier this year, Greene said he began getting calls that Pepperdine might not extend the escrow again because “they were getting pressure from the mayor’s office.”

Then he says he got a call from developer Eli Broad’s attorney saying they were interested in buying the lot. “I’m not interested in selling. I’m interested in building the house,” Greene said.

Attorney Andrew Cushner reportedly told Greene, “Broad and others on his beach want to buy the lot so they can donate it to the state so they don’t have to have view corridors by their houses.” Among the “others on his beach” would be Mayor Richard Riordan’s wife, Nancy Daly, who has petitioned the California Coastal Commission to mitigate the view protection provision on her property.

Coastal is scheduled to hear on Wednesday her application to demolish three single-family homes and a 180-foot bulkhead on Carbon Beach and replace them with one 14,210-square-foot home. Daly also seeks to move a previously identified public view corridor at 22338 Pacific Coast Highway to another property. The coastal panel will consider a similar request by developer Eli Broad for two parcels at 21958 PCH and 22368 PCH (Gamma Family Trust); 21704 PCH is the mitigation site.

Carbon Beach residents say they were never notified of the hearing, which was originally scheduled for May because there was no room for it on the April agenda but subsequently moved ahead anyway.

Coastal Commission staff did not return calls to The Malibu Times Tuesday.

“I don’t think enough people were notified,” said Lou Adler, who lives two doors west of the subject property. He says he is worried the coastal panel “will ramrod this thing through without investigating it.” He says he understands the buyers trying to avoid public access beside their homes, but the narrow strip of sand, on a dangerous curve of PCH, with inadequate parking, is not suitable for a public beach. “I’m not even thinking about viewpoint or access. The state has to be interested in the lives of people going to the beach there.”

Another Carbon Beach resident says he found out from a local attorney that Broad was buying the property jointly and giving it to coastal in exchange for moving the view corridor from his property. “It’s 80 feet for 80 feet,” said Paul Zimmerman. “What bothered me a lot is how Broad would react if someone did the same thing to him.”

A local real estate agent, who spoke on condition of anonymity, said Pepperdine was under pressure not to extend Greene’s escrow and had transferred title to Broad and Daly. There also was no public hearing on plans to turn the property into public beach. “Neighbors should have been notified,” he said. “The thing that makes it a scandal is they used pressure to get Pepperdine to cancel a valid escrow.” He noted it would completely change the neighborhood. “An EIR on public beach is usually required. Coastal would require it for someone else.”

Greene said in order to submit his building plans to the Coastal Commission, he needed State Lands determination of the mean high tide line. “It’s usually a rubber stamp. They look at it and sign it off. In this case, the lot is so skinny it may be the first time State Lands ever did a full survey over the course of a year.”

In late February, Greene said, he contacted civil engineer Lynn Heacox, whom Pepperdine hired to do surveys at the same time as State Lands. “Results of the first two surveys were that the house design was OK, so I decided to close March 1 without waiting,” he said. “I would take the gamble.”

Dennis Torres, Pepperdine’s director of real estate, said Greene’s escrow had been extended too long. “I put a final drop-dead date of March 1 on it. It said if the transaction doesn’t close for any reason whatsoever, both parties are released from obligation.”

Then, Greene discovered Pepperdine had revised the plans and had to get new approval from the city. “When we were ready to close, they didn’t have the planning approval that was in the purchase agreement. Now they needed a variance for city approval.”

“My expediter put in an amended plan, and the city said it may require a variance,” Torres said. “We always had approval in concept, we still have it. This was not done to discourage Greene. I told him before there was any one else in the picture that we weren’t going to extend after March 1.”

Torres maintains there was no pressure from Broad, Daly, et al to sell to them instead of Greene even though they would pay more money. “They wanted to buy it from Greene. They said, ‘We want you to do us a favor. We want you to give him one more month.’ They thought he would close and accept their offer. Their interference was in his favor.”

Torres said he agreed, but the extension was only if they could make a deal with him. They couldn’t because he wanted more than they were willing to pay.

Greene said Broad’s representatives made him a small offer on the property, about 10 percent of what he would have made developing the property. “I asked them how they know it will be approved by Coastal.” He said they indicated it was a done deal.

“They did it very fast. Daly and Broad knew I was buying the property, and Pepperdine knew I wanted mediation.”

The Coastal Commission meets at 9 a.m. April 12 at The Queen Mary, 1126 Queens Hwy., Long Beach. The commission’s Ventura office number is 805.641.0142.

Opinion: Is it a possibility, politics or a pipe dream?

Overview

These past few weeks have seen the introduction of a major proposal by a group called the Malibu Coastal Land Conservancy (MCLC) to convert the roughly 90 undeveloped acres in the Malibu Civic Center area into a wetland. I must confess, I began to examine this proposal with a high degree of skepticism because of the peculiar timing of the proposal presentation, given the proximity to the next council election April 11. The proposal seemed to be tied to the re-election efforts of Walt Keller and Carolyn Van Horn with the support of Gil Segel (heading up the Malibu Coastal Land Conservancy) and Bob Purvey (who is orchestrating the Save the Wetland protests in the Civic Center). The timing of the presentation of the proposal appears to be part of a coordinated print- and cable-advertising campaign with Keller and Van Horn portraying themselves as the only true environmentalists left — holding the line against the evil developers. But, even though, in my own mind, the proposal seems to be a political device, I also know there are a number of very sincere people connected with the MCLC and this proposal who strongly believe in it. Thus, I decided to try to examine the plan on its merits, to calculate what it would mean to the community, what it would cost and where those dollars could come from. I got my information from city officials, engineers, wetland specialists and real estate brokers. I have read most of the numerous reports and studies on the Malibu Civic Center and lagoon areas. There remain many unknowns. And, for that reason, this analysis, particularly in the area of cost, is by no means complete.

The proposed plan

No one can accuse the MCLC of not being ambitious. The plan is staggering in its size and scope and its plans for the Civic Center are impressive. Of the roughly 90 undeveloped, mostly commercially zoned acres in the Civic Center, this plan intends to put almost one half of the land under water, with three distinct but connected wetland lakes. That means a substantial portion of the Chili Cook-off site, the area to the west of that and part of the area north of Civic Center Way (see map) would all be wet. Additionally, in order for the wetland to work, biologically, it would have to be connected to the ocean via Malibu Creek or Malibu Lagoon. Experts have suggested that be accomplished by tunneling under the developed area of the Civic Center and/or under Pacific Coast Highway. Pumping station(s) and lining of the wetland areas would be required to prevent the water from percolating down and raising the water table in the Civic Center and Malibu Colony areas (thus exacerbating existing septic problems). For the system to work as designed, creek or lagoon water for the wetland would be cleaned (“polished” is the word used). The monitoring and maintenance of water quality would, no doubt, require a full-time biologist and staff. Designed and operating at peak efficiency, the wetland would attract and support a wide range of wildlife. If anything goes awry (like poor circulation, mud slides, pollution from sources upstream, etc.) the system could fail and quickly turn into a smelly and mosquito-infested swamp.

The estimated costs

While feasible from an engineering perspective, everything I mentioned previously is difficult and expensive. One group of experts concluded the plan would be biologically unfeasible and the cost of land, construction and maintenance would be prohibitive. Currently, the land in question is held by multiple owners, with the Malibu Bay Company holding about half. Almost all of the land is zoned for commercial development. The Wetland Plan calls for the purchase of the entire area, with the majority being converted to wetland and a portion allocated to the development of ballfields (in the area adjacent to City Hall).

Land and development costs

Malibu Bay Company Civic Center holdings

Chili Cook-off site 19. 61 acres

Ioki parcel 9.28 acres

Smith parcel 7.10 acres

Winter Canyon parcel 4.21 acres

Island parcel 1.11 acres

Total 41.31 acres

The general opinion was that these commercial zoned properties were worth from $750,000 to $1,000,00 per acre in the current market. The price varied somewhat because of location and how far along they were in the development process.

Land Cost $31 to $40 million dollars for land

Excavation and dirt removal = $3 million to excavate (the site is above sea level so to dig a hole for the water it was estimated that 365,000 cubic yards (from Chili site alone) would have to be removed at $8 per cubic yard

Excavation and dirt removal $3 million

Total MBC Civic Center land costs $34 million to $43 million

Other property in Civic Center (not owned by Malibu Bay Company)

Yamaguchi parcels 5 acres (off Stuart Ranch Road)

10 acres (Greenhouse)

Land cost =15 acres at $650,000 per acre $9.75 million

Old Knapp parcel (La Paz) 6 acres (on Civic Center Way)

9 acres (behind skateboard park)

Land cost = 15 acres at $650,000 per acre $9.75 million

Shultz parcels 2.3 acres (corner of CCW)

3.5 acres (skateboard park)

Land cost = 5.8 acres at $650,00 per acre $ 3.77 million

Pepperdine/Wave parcel 9.0 acres

Land cost = 9 acres at $800,000 per acre $7.2 million

Total other land costs

(44.8 acres at avg. $680,00 per acre) $30.45 million

excavation costs $3 million

Land and site preparation

(cost for walkways, benches, ballfields, restrooms, other amenities, are generally calculated by cities at approx. $200,000 per acre for park-type construction). Cost of 86.11 acres at $200,000 per acre

Total build-out cost 86.11 acres at $200,000 per acre) = $17.2 million

We’re not through yet. In order to get the wetland to work, the expert opinion was they would have to extend the lagoon that’s south of the bridge on PCH by another 300 feet and take about 4.28 acres of what is now a 9-hole golf course with a stone wall built around it that is adjacent to the Malibu Colony and is among the most expensive land in Malibu.

Land cost = 4.28 acres $33 million

Excavation and removal cost $500,000

Install a culvert under Pacific Coast Highway, so the wetland connects with the lagoon and the ocean. Estimated it would take 4 culverts 10-by-40 feet for the design to work.

Construction cost $7 million

Include design elements that would address potential for flooding and water quality problems, (including berming and drainage control.

Estimated cost $2 million

EIR(State)/EIS (Federal) $250,000

Unknown costs (est. 5-plus %) $5 million-$10 million

What’s missing are engineering, design, architecture, accounting, legal (here are bound to be some lawsuits), biologists, wetland experts, studies , etc., which easily could run another 20 percent to 30 percent of the project cost.

Soft costs $30 million

The total overall project cost $162 million-$175 million

Summary

When you sum it all up, the proposed Wetland Project is a major development, the likes of which Malibu has never seen before. And, while the proposal might be justified on environmental grounds, the reality is the cure may be worse than the disease. The creation of what is essentially a 45-acre, man-made lake would take years to construct, and would require the removal and transportation of an enormous amount of soil (if, indeed, a place can be found to accept it at a reasonable cost).

To put this into perspective, if the dirt removal required by the Kanan-Dume Road fix was a major cost factor, the amount to be removed required by the wetland project can be likened to building the Panama Canal! In addition, the engineers estimate it would take three to five years to complete the project once the land has been acquired and 50 or so different governmental agencies (with completely different agendas) to complete their own studies and sign off on the plan and issue the necessary permits. For a small city like Malibu, with a $12 million annual budget and without other significant funding sources, to consider being the lead agency in a project of this magnitude is almost laughable.

So, where might this money come from? According to the MCLC and Keller and Van Horn, it will come from the Bond Acts Propositions 12 and 13, government grants and private contributions. But there’s a catch. Assuming the city could get bond money or other government grants, which in my opinion is highly improbable since most of that money is already committed, these funds always come with the proviso requiring the land to be purchased from “willing sellers.” This means the city cannot use its powers of condemnation if it intends to use these sources. So, what makes a seller “willing?” That one is simple. The more the city is willing to pay, the more the seller is willing to sell. And, if all the land-cost estimates are based on today’s market values and conditions, forget them! With the wetland project in the offing, just about any Civic Center landholder has the power to kill the deal by refusing to sell, and the term “willing seller” translates to “willing for a price.” And, if the city can’t or doesn’t want to pay that price and chooses the condemnation route, there’ll be no grants or government help, and it’s back to the citizenry for money.

When you take this into consideration, my original estimate of $162 million to $175 million could easily balloon up to $200 million to $250 million-plus as we sweeten the pot to get them to sell.

Now, consider a few of the non-economic factors. The Malibu Knolls area, which had reservations about a golf driving range and senior citizen housing, will now be required to look down at ballfields in constant use. Our large community of ground squirrels (non-endangered) will have to be relocated or drown while other species will have to be protected. Certainly, the addition of all this water will create a major shift in our biota, not to mention the effects on the surf zone (for better or for worse). Then, there’s the traffic impact as thousands of round trips of large, gas-guzzling, air-polluting trucks transport tons of excavated soil over many months to create our 45-acre lake. One has only to recall the impact made on our lives during the rebuilding of the Malibu Creek Bridge or the Kanan-Dume repairs, or the La Costa hill Stabilization , to understand the estimated costs I’ve come up with may, in fact, be conservative.

A wetland sanctuary, perfectly designed, constructed and managed, is a worthy vision. And the management of our undeveloped areas in a manner that serves our community while preserving the environment is a responsibility of citizenship. However, those who hold out this plan as responsible and achievable are fooling you, if not themselves, wasting previous time, energy and resources that could be directed at finding practical alternatives.

Is any of it realistic? Or, is it just a campaign pipe dream? You be the judge.

The City Council is scheduled to hold a special meeting today, (Thursday).

Many of the agenda items, listed below, were part of the agenda for the March 27 meeting, which was canceled to enable Malibu to attend the memorial service for City Councilman Harry Barovsky.

• Discussion of process of filling the City Council vacancy

• Proposed resolution supporting concept of acquiring undeveloped land in the flood plain of the Civic Center for preserving open space and constructing a functional wetland

• Presentation of the Malibu Coastal Land Conservancy on its November 1999 fund-raiser

• Community Development Block Grant funds, 2000-2001, for low- and moderate-income residents, senior citizens and persons with disabilities

• Final appointment to the Code Enforcement Task Force

• Presentation of the city’s Economic Plan

Despite their 2-2 vote on forming an ad hoc committee to renew the city’s cable television franchise [see accompanying story], the City Council was able to unanimously approve the following items Monday night.

Streisand/Brolin home

After two months of public hearings and last-minute Planning Department approval of revised plans, the council approved plans to demolish the existing Zumirez Drive, 4,198-square-foot home and garage of Barbra Streisand and James Brolin and replace it with a 6,424-square-foot home and garage.

This approval rejected the appeal of the couple’s neighbor Eric Jacobson.

Reacting to charges of favoring celebrities, council members emphasized their approval was based on city law.

The 3,418-square-foot main house and 442-square-foot garage basements were not considered in the project’s total square footage because there are no regulations on basements, Councilman Tom Hasse said. (Basements are part of the hillside ordinance being reviewed by the council’s Architects and Engineers Committee.)

The current house is closer to the coastal bluff’s Environmental Sensitive Habitat Area than the planned house is, said Councilwoman Joan House, referring to a determination the top of the bluff was now at an 84.8-foot contour line rather than the originally drawn 93-foot contour line.

According to the city’s resolution, the height of the 28-foot, two-story house was found to be consistent with others leading up to the end of Zumirez Drive and within 500 feet.

Code enforcement

The council approved the proposed resolution on the charter of the Code Enforcement Task Force created last month.

The charter includes: 1) grandfathering; 2) permitted uses; 3) ancillary structures; 4) entitlement; 5) costs, fines and requests for permits; 6) guest houses versus second units; 7)written complaints; 8) written code enforcement policy; 9) expanding the function of the Building Board of Appeals; 10) lack of county records; and 11) consideration of amnesty.

The council also continued naming members to the task force.

House named Realtor Terry Lucoff and architect Marc D. Jackson; Hasse named attorney Bill Sampson; and Keller named contractor Bruce Terranova. Carolyn Van Horn still has to name the 15th member.

Attorney Sam Birenbaum, who applied to be appointed to the task force even though criminal misdemeanor charges are pending against him and his wife, Nidia, for illegal building activities, lambasted city staff for abusing their discretion.

Calling creation of the task force a “token gesture” after hundreds of people told the council how they were living in fear, he asked the council to suspend all criminal prosecutions and resolve cases by alternate dispute resolution. The council refused to do so.

Drug/alcohol rehabilitation facilities

The council approved authorizing the city lobbyist to seek an amendment to state law to distribute residential drug and alcohol rehabilitation facilities throughout the city. Hasse’s amendment to look into legal challenges of the law was also approved.

City attorney

The council approved the legal services contract with the new city attorney, Steve Amerikaner, based on changes suggested by Jeff Jennings and Councilman Walt Keller. Amerikaner agreed to revise his contract to clarify that his billing rate would be $196 per hour for all basic services, and agreed to charge for only half his travel time.

Traffic study

The council awarded a contract to Katz, Okitsu & Associates to prepare a traffic turn study for Pacific Coast Highway.

Water quality

The council authorized the mayor to enter into a Memorandum of Understanding with other agencies to submit a joint application for a federal grant to fund the Malibu Creek Watershed Wide Monitoring program.

Pam Linn/Associate Editor

Development of a controversial spiritual retreat in Latigo Canyon has ground to a halt again as county planners rescinded a 1994 construction permit that was renewed last year.

The project was conceived as an environmentally friendly vacation spot utilizing 95 yurts, circular tents traditionally used by Mongolian nomads. However, the plan was opposed by neighbors and environmentalists who contend the initial permit and its renewal last year were issued by mistake. County planning staff say they only followed suit after the California Coastal Commission approved it.

County Supervisor Zev Yaroslavsky last fall said the permit was “an embarrassment” and vowed to stop the project unless it received more intense scrutiny by government agencies. The yurts, he said, were not tents, but cottages, and the campground was really a conference center.

Developer Richard Weintraub, who had begun site preparation, was notified March 8 he violated provisions of county zoning law by trimming branches from several protected oak trees without prior approval of an oak tree permit. Failure to comply with the zoning ordinance would result in a criminal complaint being filed with the District Attorney. Conviction can result in up to six months in jail and/or a $1,000 fine for each day in violation, Weintraub was warned.

The plot plan was rescinded after a site inspection showed the planned yurts would encroach on a significant oak woodland and were within 200 feet of an environmentally sensitive habitat area (ESHA). Inspectors also said building and significant grading in hillside management areas would take place in the development of the property, and the plot plan “did not accurately reflect the topography of the property.”

The developer must now apply to the Department of Regional Planning for a conditional use permit, an oak tree permit and review by the Environmental Review Board before development of the campground may proceed.

The proposed development agreement between the city and Malibu Bay Company continued to be the lightening rod of City Council election tensions, with Council Members Walt Keller and Carolyn Van Horn killing a motion Monday to appoint Harry Barovsky and Tom Hasse to an ad hoc committee.

The committee would negotiate renewal of the city’s cable franchise agreement, due to expire June 30. Elections for City Council are set for April 11.

“Do we have to have another secret committee instead of the whole council or the [telecommunications] commission?” asked Keller, referring to Joan House and Hasse, who were on the ad hoc committee that negotiated the proposed development agreement.

House, who along with Keller and Van Horn is running for re-election, said Keller’s remarks were mixing up the mandates of the two bodies.

“The commission is only involved in “in-house” matters, and everyone wants improvement,” House said. “When we talk to a monopoly, we are not coming from the same place. The cable company wants the highest possible price for the least amount of service because Malibu has no choice. We have to have a strategy.”

City officials agreed with House.

“What kind of deal would you get if you negotiate in public?” asked Interim City Attorney Richard Terzian.

“We want to increase our options, so we don’t want to tip our hand,” said City Manager Harry Peacock.

As Barovsky was not present, the 2-2 vote on forming the committee (Keller and Van Horn against, House and Hasse for) was tabled until the next meeting.

In an indication of possible acceptance of the Malibu Bay Company agreement, Ozzie Silna, treasurer of nonprofit Malibu Coastal Land Conservancy, urged the city to purchase Malibu Bay Company land with money from recently approved bond measures for park and water reclamation. The agreement includes a 10-year moratorium on developing a significant portion of the Civic Center.

With Hasse noting the Planning Commission will soon hear a Malibu Bay Company Civic Center project, the council asked Silna and Peacock to track bond funding. The council also decided to discuss specific purchases at the next meeting.

The most virulent objection to the development agreement came from attorney Sam Birenbaum, whose wife, Nidia, was appointed and later fired by Hasse as a telecommunications commissioner.

Birenbaum said commission refusal to have the agreement submitted to an economic consultant, as requested by Keller, made the plan “suspect.” He targeted Hasse specifically, saying Hasse did not grow up here, had lived here only three years, did not own property or have family here, and won his seat by only 29 votes.

Prevailing on a clearly reluctant Van Horn to let him respond, Hasse replied he has lived here 16 years and that the agreement could be amended in many ways.