Price to County More Than Doubles on Freeway Parcel

Times Staff Writer

After passing up a chance to buy the property for $3 million, Orange County has agreed to pay $7 million for 47 acres of land needed for a new freeway in the Laguna Hills area, county officials said Friday.

The Board of Supervisors will be asked on Wednesday to approve the payment to the Presley Co. of Southern California, developer of large equestrian lots on the exclusive Nellie Gail Ranch in Laguna Hills.

End of 5-Year Fight

The settlement, a product of lengthy negotiations completed in the last few days, will end a five-year battle between the county and Presley that saw the county wind up on the short end of a court verdict. Officials said the verdict was the main reason that the cost of the land more than doubled.


In exchange for the payment, all lawsuits will be dropped and the county will get the land it needs for the San Joaquin Hills Transportation Corridor.

After “a lot of negotiations and tradeoffs back and forth” with Presley, “we feel what we’re paying now is a fair and equitable figure,” said Murray Storm, head of the county Environmental Management Agency.

The payment will also mark the county’s first expenditure for development land needed for the San Joaquin and two other freeways planned for southern and eastern Orange County, Storm said. There will be another purchase of land in Sycamore Hills from Laguna Beach for the San Joaquin freeway, which will run eastward from Corona del Mar to the I-5 Freeway near the northern edge of San Juan Capistrano.

County officials said that in 1980, planners realized they would need the Nellie Gail Ranch land--34 acres was the amount then specifed--for the proposed freeway.


Presley had received preliminary approval in 1976 to build 292 homes on the 283 acres, the last phase of the Nellie Gail Ranch development. By law, the county is not permitted to attach new conditions, such as freeway land donations, to tentative tract maps once they have been approved.

Presley offered to sell 34 of the 283 acres to the county for between $2 million and $3 million, but the Board of Supervisors contended in 1982 that the tentative tract map was no longer valid and Presley would need a new one.

New County Policy

The supervisors that same year had instituted a new policy requiring developers near new freeway routes to give up land for the right of way. Presley, if forced to get a new tract map, could have been required to yield the land to the county.


Presley sued the county, contending that its preliminary tract map was still valid and the county could not force the company to plan its development around the freeway. The company, a subsidiary of Presley Cos., was upheld in state courts, including the Supreme Court. A federal court told both sides to settle the issue in state court first.

When negotiations on the land reopened after Presley’s state court victory, the company suggested that it be paid $10 million to $11 million for the land, county officials said.

Negotiations produced the $7-million figure, which Storm blamed on the county’s loss of the court battle, the increase in the amount of land the county wanted from 34 acres to 47, plus “inflation and a change in the value of properties due to a change in the value of real estate out there now.”

Storm said the county’s payment includes $125,000 for the construction of sound walls. He said the county will add another $175,000 for the same purpose, boosting the total to $300,000.