Coastal Panel Tells Carlsbad to Handle Building Fee Feud

Clearly eager to stay out of a nasty and long-running feud between two influential developers, the California Coastal Commission on Thursday denied a request by one of the builders to escape an unusual requirement that he pay nearly $600,000 in fees that would be funneled to his adversary.

Under a 1982 contract with the commission, James Warmington, an Orange County developer building a subdivision in southern Carlsbad, has been required to pay a $27,000-per-acre fee before he converts his coastal North County farmland into tract homes.

Warmington has sought to avoid that requirement because an extraordinary provision of a 1984 bill by Assemblyman Bill Bradley (R-Escondido) created a system that channels two-thirds of those fees to Dwight Spiers, another Orange County developer who is former owner of the Carlsbad property.

On Thursday, representatives of Warmington Homes asked the commission to relieve them of the fees and instead include the company in a new program that permits property owners in Carlsbad to develop agricultural acreage if they purchase an equal amount of farmland elsewhere in the state coastal zone.

But commissioners, reluctant to inject themselves into a politically charged dispute fraught with legal questions, rejected the request on a 9-3 vote. Explaining their opposition, several members of the state panel argued that the matter deserved a hearing before the Carlsbad City Council in advance of any action by the commission.

“Who wants to be the bird in this badminton game?” said Commissioner Donald McInnis. “Not Carlsbad, most likely. Nonetheless, we should demand that this issue go back to the city and before the local people. At this stage, that’s where it properly belongs.”

Commissioners Steve MacElvaine, Thomas McMurray and Dorill Wright voted in favor of Warmington’s request on grounds that the proposal was consistent with the state Coastal Act and would be of greater benefit to coastal resources than the fee payments currently required of the developer.

Warmington representatives expressed disappointment at the commission’s verdict but vowed to continue their fight against Spiers and his company, Carlsbad Investors Ltd., before a judge. A lawsuit challenging Spiers’ right to the fees has been filed in San Diego Superior Court.

“We suggested this program because we’d rather see our money go toward the preservation of agricultural land than into Dwight Spiers’ pocket,” said Stephen Maloney, a vice president for Western Properties Service Corp., Warmington’s financial partner in the 381-home Carlsbad project. “Too bad the commission doesn’t feel the same way.”

Spiers, meanwhile, said the commission’s action reflected “the facts and equities of the situation” and added that he hoped Thursday’s hearing had “put an end to this thing, for the benefit of all parties involved.”

The developers’ feud erupted following Spiers’ sale of the 57-acre Carlsbad property to Warmington two years ago. Under an agricultural subsidy fee program that existed at the time, Warmington was required to pay $27,000 per acre to build on the coastal farmland. The fees, placed in a fund managed by the Coastal Conservancy, were used to preserve prime agricultural land in other areas of the city.

In 1984, Spiers suggested Warmington join him in pursuing legislation to abolish the subsidy program and obtain refunds of the fees, to be split by the two developers. Warmington never agreed, so Spiers found a legislator to carry out the plan, with one crucial difference: Under Bradley’s bill, all the refunds would go to Spiers.

The bill passed, refunding more than $400,000 to Spiers. Furthermore, under contracts predating the legislation, Warmington must pay another $1 million in fees to complete his half-built Carlsbad project; unless Warmington is successful in court, about $600,000 of that money will flow to Spiers.