Santa Fe Still Has Plans to Develop Hermosa Property

Officials from Santa Fe Railway said this week that the railroad has not given up on plans to develop its 19-acre right of way in Hermosa Beach, despite the company’s decision last week to drop a $15-million lawsuit against the city over zoning of the property.

“There was not--and never has been--any thought of walking away from the property and giving it to the city,” said William Bentley, manager of real estate and contracts for Santa Fe. “We have absolutely no intention of abandoning any effort to develop the Hermosa Beach property to its fullest extent.”

Benjamin Salvaty, a Santa Fe attorney who handled the lawsuit against Hermosa Beach, said that next month the railroad will ask the City Council to rezone portions of the 100-foot-wide right of way from open space to commercial and residential uses. Salvaty said the exact zoning mix could be negotiated during the application and public hearing process.

“It is premature to say what percentage would remain as open space,” Salvaty said. “We have always been willing to leave some open space. We would not like to develop the whole thing.”

Suit Filed in ’82

Santa Fe filed the $15-million lawsuit in October, 1982, two months after the City Council voted to zone as open space the previously unclassified right of way. Santa Fe officials said the open-space classification effectively blocked the railroad from developing the strip--or, in legal terms, created an inverse condemnation of the property.

The open-space classification allows trains to pass through the property, but restricts other uses to private and public recreation. The right of way, which has been landscaped by the city and is equipped with an exercise course, is the largest piece of open space in Hermosa Beach, aside from the beach.

The Santa Fe line slices through the heart of South Bay coastal communities to a dead end near King Harbor in Redondo Beach. The tracks, laid in the late 19th Century, served to transport freight to businesses in the beach cities and occasionally to carry passengers. Railroad officials said the line became obsolete as the coastal communities developed into residential and commercial centers, leaving most heavy industry to other areas of the region.

Trains rarely traveled on the line after the mid-1970s, but Santa Fe did not officially stop running trains over the right of way in Manhattan Beach, Hermosa Beach and Redondo Beach until 1983. The tracks north of Rosecrans Boulevard in El Segundo are still active.

Manhattan Beach Talks

The 21.5-acre right of way in Manhattan Beach, like the strip in Hermosa Beach, has been the subject of intense negotiations between Santa Fe and the city, which wants to spare the land from development. Last month, officials reached a tentative agreement that will allow the railroad to build a 200,000-square-foot commercial development on a 2.5-acre portion of the strip. In turn, the city will be allowed to preserve the remaining 19 acres as open space in exchange for $5 million in real estate and cash.

The tentative agreement has been referred by the City Council to the Planning Commission for public hearings, the first of which should be held next month, City Manager David J. Thompson said. But with the dismissal of the suit against Hermosa Beach, Manhattan Beach city officials said they will be scrutinizing Santa Fe’s next move in Hermosa Beach to determine if their neighbor to the south is getting a better deal.

“Certainly if Santa Fe has capitulated in Hermosa Beach and feels the ordinance is not subject to successful litigation, there is no reason for Manhattan Beach to enter a development agreement if we can rezone the property,” Thompson said. In Manhattan Beach, the right of way has not been zoned as open space but is listed instead as unclassified.

Manhattan Beach Mayor Gil Archuletta said the hearing and review process for the proposed agreement, which takes several months, will give the city enough time to watch what Santa Fe does in Hermosa Beach. In the meantime, City Atty. Carl L. Newton has been directed to study what legal implications the Hermosa Beach developments have for Manhattan Beach.

Community Interest

“I am getting an awful lot of calls from the community saying that we should take a hard look” at the agreement, Archuletta said. “I would like to see what happens during the public hearings.”

Bentley said, however, that officials in Manhattan Beach have nothing to worry about. He said the railroad intends to pursue its development proposal in Hermosa Beach as aggressively as the company pursued its Manhattan Beach proposal.

The three-acre right of way in Redondo Beach, which winds behind the Southern California Edison plant, will be put up for sale early next year, Bentley said. City Manager Timothy Casey said the land, because of its relatively undesirable location, has not been a source of controversy in Redondo Beach. Bentley estimated it is worth about $4 million.

During the three years since the suit against Hermosa Beach was filed, city officials and Santa Fe representatives have attempted to reach an out-of-court settlement. Just weeks before Santa Fe dropped the suit, Hermosa Beach made an offer that would preserve as open space the right of way south of 8th Street and north of 16th Street.

Under the proposal, Santa Fe would dedicate those portions of the strip to the city, and the city, in turn, would allow development of the property between 8th and 16th streets. Santa Fe would be prohibited from developing the property for one year, however, giving the city time to come up with $6 million--if it could--to buy the land and save it as open space, too.

Preserve Open Space

“If we couldn’t afford to buy it all, our major concern was to preserve as much open space as possible,” City Councilman Gary Brutsch said. “During that year it would have given us time to go to the people and say, ‘Do you want to buy it, or develop it?’ ”

Santa Fe, which has said it will sell the entire right of way to the city for $15 million, never accepted the proposal, nor made a counteroffer. The railroad opted instead to drop the suit Dec. 3.

“It seemed the best thing to do was to clear the air in the hopes of maintaining the dialogue,” said Salvaty, explaining why the railroad dropped the suit just two weeks before going to trial. “There is more dialogue now between the two parties than there ever has been. We feel that after going through the public hearing process that the parties will reach an agreement.”

Salvaty acknowledged that recent federal and Supreme Court decisions regarding open-space issues and local zoning laws also played a part--although minor, he said--in the railroad’s decision to abandon the suit.

Seek Local Remedies

In one case, the Supreme Court ruled that property owners must pursue all local avenues of appeal before going to court over a zoning dispute. City officials said Santa Fe had not exhausted local remedies before filing the suit in 1983.

By requesting the zoning change next month, as Salvaty said Santa Fe will do, the railroad seems to be following the administrative steps that it failed to follow two years ago. Salvaty said, however, that Santa Fe is not preparing a new case for court.

“Theoretically, yes, it is possible to go back to court, but we are not looking at that as a possibility at this time,” he said.