Homes may enter picture

They’re sticking a “For Sale” sign next to the Hollywood sign.

A Chicago investment group said Tuesday that Los Angeles officials had failed to come up with the cash to preserve the mountaintop next to the iconic sign, so it has put the ridge up for sale.

Cahuenga Peak, the backdrop to one of L.A.’s most famous postcard views, will carry a $22-million price tag, its current owners said, and could attract buyers seeking the ultimate L.A. pad.

But the listing immediately generated loud protests from city officials and Hollywood residents, who say building homes on Cahuenga Peak would mar hillside vistas and scar a pristine hilltop.

“That mountain should not be cluttered,” said L.A. Councilman Tom LaBonge. “It’s good for the psyche of Los Angeles.”

The 138-acre property is zoned for five luxury homes, according to investment group partner Keith Dickson. “It could be used for one large home or a family compound,” he said.

Fox River Financial Resources acquired the mountaintop in 2002 from the estate of Howard Hughes for $1.675 million.

The eccentric tycoon had bought it in 1940 with plans to build a love nest for actress Ginger Rogers.

But she balked at that idea, fearing that the reclusive Hughes would “lock me up in a hilltop house and never let me see anyone,” as Rogers later put it.

For the last several years city leaders have scrambled to raise money to buy the ridge property from Fox River and turn it into an extension of Griffith Park. So far, they’ve accumulated about $5 million.

The city had intended to ask the nonprofit Trust for Public Land to negotiate a selling price with the Chicago owners. Two months ago, a city-commissioned appraisal calculated that the mountaintop was worth about $6 million.

LaBonge was stunned Tuesday by Cahuenga Peak’s asking price. “If they come to City Hall and do the right thing, they can still make a nice profit,” he said of its current owners.

“The city should acquire this land,” he said. “Everyone was shocked to find out it was privately owned. Everybody thought the city already owned it.”

Dickson said city leaders may have dragged their feet because they thought the acreage was landlocked -- inaccessible and thus undevelopable.

But the developers insist the land is accessible, thanks to Hughes’ actions in the 1940s.

He sued to obtain an easement to his peak property. In 1949 the city settled the lawsuit, granting Hughes a 100-foot-wide access to the site from the end of Wonder View Drive, said Mark Ward, a partner in the investment group.

In addition, the eastern edge of the property comes within a few yards of another road, the city’s Mt. Lee Drive, which crosses the ridgeline above the Hollywood sign.

Fox River executives are listing the acreage with Teles Properties of Beverly Hills. Ernie Carswell, one of the listing agents, said the peak was zoned for five homes.

“When you look at photographs of it, it looks steep. But it’s much more gentle-sloping than what you see in places such as Bel-Air. The tops of the ridges are smooth,” Carswell said.

He said any outcry over home construction on Cahuenga Peak would be muted when people realized that most of the development site is on a ridge behind the hillside with the Hollywood sign.

“Nothing will obstruct the Hollywood sign. Homes would be built above it and behind it,” Carswell said.

But the homes would be seen from a broad area south of the Hollywood Hills, including the nearby Hollywood Freeway.

Once the property was sold, the owners would have to clear any building plans with the city. But given the fact that the land is already zoned for residential use, it’s unclear on what basis the city could reject homes there. It would be up to the new owners to install utility lines, water service and a road to the property.

The Hollywood Hills have seen a boom in construction on remote, rugged tracts in recent years as the technology for building into hillsides has improved. Parcels in such places as Laurel Canyon that for decades were considered unbuildable now have homes on them.

Real estate agent Sarah Blanchard, who shares the listing, said the peak “could be used for one house, or it could be kept a wilderness with somebody’s name on it.”

From the 1,821-foot peak, there are unobstructed views south to the ocean and north to the San Fernando Valley. Santa Catalina Island is visible on clear days.

Blanchard speculated that the property would attract the interest of wealthy overseas buyers anxious to take advantage of the soft U.S. dollar.

“Don’t rule out someone from China or the United Arab Emirates,” Dickson said.

Others, however, said they hoped Los Angeles’ last privately owned, undeveloped promontory ridge ended up in the public’s hands.

“I think it goes without saying that it would be a mistake to build homes there,” said Leron Gubler, president of the Hollywood Chamber of Commerce. “It would be very unfortunate.”

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bob.pool@latimes.com