Laguna Beach : City Set to Repay Chunk of Sycamore Hills Debt

The city Tuesday moved closer to paying off the debt remaining from its 1978 purchase of the Sycamore Hills area when it received a $5-million final payment from a developer for 62 acres of the Laguna Canyon site.

Laguna Beach paid $6.7 million for the site seven years ago in an effort to forestall heavy development in the greenbelt area and to end legal action brought by the site’s owner, Rancho Palos Verdes Corp., which sought to build on the hilly property.

“We bought the property at that time to settle the lawsuit,” said Laguna Beach City Manager Ken Frank. “Unfortunately, the city didn’t have any way to pay for the property.”

To help pay the debt, Laguna Beach last year sold 62 acres of Sycamore Hills for $5.4 million to another developer, Los Angeles-based Kaufman and Broad Inc. Although Kaufman and Broad had three years to retire its debt, Frank said, the firm decided to pay it off early in order to qualify for low-income county revenue bonds.

Frank said another $990,000 from the city’s general fund will be added to the $5 million it received Tuesday and the money will be forwarded to Rancho Palos Verdes Corp., reducing the city’s remaining debt to $690,000.