Laguna Beach Sees Grass Roots Wilting

After the Irvine Co. won approval in 1989 to fill pristine canyons surrounding Laguna Beach with expensive tract homes, a shopping center and a golf course, nearly 8,000 protesters swarmed the roads and hillsides on foot, bicycles, skateboards and horseback, carrying signs that proclaimed “Greed Can’t $ucceed.”

The show of force, known as Laguna’s Last Stand, succeeded in blocking the development. And it typified the spirit of a bohemian beach town dubbed the People’s Republic of Laguna, a liberal outpost of environmentalists, hippies, artists and gays in conservative Orange County.

Fifteen years later, the community is learning that the lavish Montage Resort & Spa, wanting to expand beyond its South Laguna bluff top, is quietly laying groundwork to build a championship golf course and villas in brush-filled, creek-fed Aliso & Wood Canyons Wilderness Park.

And local environmentalists and other activist are distressed because, they say, this is not the same community where city leaders once stood arm-in-arm with residents to preserve open space.

Elizabeth Pearson, a councilwoman who is now mayor, was unabashedly chauffeured to a Beverly Hills City Council meeting last summer to extol the virtues of the Montage, while her fiancee was a consultant on the golf course expansion.

Other decision makers who once fought hillside development are now working with -- and in some cases are on the payroll of -- the resort owners.

In a sign that their influence may be waning, environmentalists and other stakeholders for months have been left out of the planning talks.

And one of their strongest allies lost his City Council seat after being targeted by a campaign committee partly bankrolled by the Montage.

Given the town’s changing political climate and increasingly affluent demographics, opponents wonder if they can block the Montage expansion. If part of a wilderness park can be commercially developed, they say, nothing will be held sacred in Laguna.

“I remember seeing my mom up on the stage, inspiring and empowering the people,” Chris Campbell recalled at a recent tribute for his late mother, Lida Lenney, who protested development 15 years ago. “It’s just big money [now],” he said. “It’s not about saving the wilderness.”

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Laguna Beach, a town of 24,500, is known for its storybook village atmosphere of beach cottages, art galleries, shops and bistros, framed by soaring hillsides and a jagged coastline. With its Mediterranean feel, it’s often called California’s Riviera.

Laguna is equally famous for embracing an eclectic cast of characters and lifestyles. Actors Rock Hudson and Charlie Chaplin called it home. So did counterculture icon Timothy Leary. The country’s first openly gay mayor was elected there.

And it has a storied reputation for protecting its environment, highlighted by the Nov. 11, 1989, march to save Laguna Canyon. Lenney, a former councilwoman who died in October, rallied the community to save a ribbon of rolling wilderness lacing the city’s outskirts from the designs of the Irvine Co.

The developers ended up offering the city an option to buy the 2,175 acres, and residents approved a $30-million bond to pay for it.

To this day, it remains open space.

By some measure, Laguna’s transformation from a quaint village to an upscale resort town was triggered by disaster.

In 1993, wildfires destroyed nearly 400 houses -- ordinary, decades-old homes owned by the likes of city firefighters and teachers.

Sympathetic to the needs of residents to rebuild without time-consuming reviews, the City Council loosened building standards to simplify the process.

And the hills overlooking downtown sprouted with an altogether new crop of homes -- including mansions of all shapes and sizes.

Upscale developers had established their foothold, and old-timers said the community was losing its rudder.

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The Montage was already on the drawing boards as scarred hillsides were morphing into new, fancy neighborhoods. Following years of intense public debate, the $200-million project opened in February 2003.

Some critics conceded that they were impressed with how the architecture, styled after turn-of-the-century California Craftsman bungalows, blended with the seascape and captured the artsy roots of the community.

Its financial benefits to the city are undeniable: $2.5 million in annual bed tax revenue and $300,000 in sales taxes. But the hotel, where a standard double starts at about $450, is scorned by slow-growth advocates as the epitome of the type of upscale development that is changing their town. Until the Montage, tourists were served mostly by mom-and-pop hotels and inns. The fanciest hotel in town had been the Surf and Sand, with roots in the Richard Nixon presidency.

Having debated every detail of the Montage years earlier, activists are now angry that the resort’s expansion is being aggressively explored outside public view. The proposal overlaps various jurisdictions and will need the approval of the Laguna Beach City Council, the Orange County Board of Supervisors, the California Coastal Commission and a host of other state and federal agencies.

Documents released to The Times under multiple Public Records Act requests show that Montage representatives met at least 11 times with a variety of government officials from February to August, beginning weeks before the hotel partners even closed the deal to buy the nine-hole golf course they hope to expand.

Among those working on Montage’s behalf was Pearson’s fiance, former Orange County Executive Officer Ernie Schneider, who helped facilitate meetings with a number of top-ranking county officials. Among them: Supervisor Tom Wilson, who had helped add the designation “wilderness” to the county park specifically to protect it from commercial development and who met three times with Montage executives, starting March 18.

In an Aug. 2 letter to local newspapers, Wilson wrote that he was contacted “a few short weeks ago” by Montage developers and the talks were at a very early stage. If the expansion was pursued, he said, “a very open public process will follow.”

In October, resort executives hired former Mayor Paul Freeman to work with them, and they contributed $15,000 to a political action committee to oust Councilman Wayne Baglin -- who promised to try to block the expansion efforts -- from office.

Baglin lost his seat in the November election.

Councilman Steve Dicterow and Councilwoman Toni Iseman have since been appointed by the council to meet with Montage officials for monthly updates.

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Young activists and old-timers alike say Pearson and other leaders are selling out to the Montage and the moneyed subculture it represents.

But even some of them agree that the council is simply beginning to reflect the greater interests of the city’s increasingly affluent population.

Today, the average price of a Laguna Beach home is nearly $1.25 million, more than triple the value of 10 years ago, according to the research firm DataQuick Information Systems. During that same time, according to census figures, the number of Laguna Beach families making more than $150,000 annually increased 30%, nearly three times the countywide rate and nearly four times California’s rate. And business leaders are pushing for higher-end shops and restaurants that appeal to the “fur and lace” crowd.

In her Beverly Hills testimony, Pearson heaped praise on the Montage for contributing to the city’s high-end demographics.

“It’s raised the bar in terms of the quality of our restaurants, our other hotels, our shops,” she said of the resort. “I know you don’t have that problem here in Beverly Hills, but it’s really helped us out quite a bit. If it weren’t for the Montage, we’d be in big trouble.”

But it is entirely a matter of perspective. Former Mayor Ann Cristoph, for example, said she already felt like an interloper.

“We had some guests a couple weeks ago. We were showing them Laguna Beach ... and here’s all these gigantic houses that seem to have popped up miraculously all over town. It’s a changing world.”

Bob Gentry, who served on the council from 1982 to 1994 and was the nation’s first gay mayor, said elected officials must find ways other than pricey resorts to keep the city fiscally strong.

“I would love someone to tell me what the Montage development brings to the character and quality of life of Laguna other than the bed tax revenue,” Gentry said.

“My gut tells me the city doesn’t need that money. And, to me, money is not worth destroying any neighborhood.”

Iseman, who chained herself to a bulldozer to stop development of a nearby toll road, agreed that the council has to better balance the needs of old-timers and newcomers.

“People who hold the traditional values of Laguna Beach are moving away or dying off. And those people who are moving in barely know the history and tradition of Laguna that made it the beautiful little town that it is,” she said.

“And I think it’s our responsibility, us being the old-timers, to educate them in a welcome-wagon fashion. ‘Welcome to Laguna. You love it. Here’s why.’ Because it’s not going to be the town they fell in love with if we’re not careful.”