Foes Fear Gridlock : Suit to Block Laguna Niguel Center Loses

Plans for a 550-acre development in Laguna Niguel advanced Friday when a judge dismissed a lawsuit filed by nearby residents concerned about the potential for gridlock on Coast Highway.

After the decision, a representative of the developer, the Stein-Brief Group Inc., declined to predict when building will start on the 276,000-square-foot commercial center at Coast Highway and Crown Valley Parkway.

“We’re pleased with the decision,” said Christopher Townsend. “Our planning has been inhibited by the cloud of the lawsuit.”

A coalition of 23 homeowner groups had opposed the so-called Monarch Beach plan at county and California Coastal Commission hearings, contending traffic would virtually stop at the busy intersection. The commercial center would occupy 14 acres of the large development site.

“It means South Laguna is wiped out,” said Hugh W. Wilkins, past president of the South Laguna Civic Assn., which joined in the lawsuit.

Stein-Brief bought the tract in 1984 for $80 million and has scrambled since then to get government approval for its building plans and to secure and maintain financing.

In a bid to avert foreclosure last July, Stein-Brief arranged financing from Dallas-based Southmark Mortgage Corp. in a deal which gave Beverly Hills Savings & Loan Assn. nearly half of the acreage of the original project.

On Friday, Orange County Superior Court Judge Tully H. Seymour ruled that the Coastal Commission had sufficient evidence to approve the project last Aug. 14 and was justified in refusing the opponents’ request to delay the hearing.

At the hearing, Stein-Brief attorney Frank A. Conner contended that the opponents never had a legal basis to challenge the government approvals and said the lawsuit was intended merely to delay the development.

“They set themselves up to fail. They did fail. And now we are being asked to pay the costs of their failure,” Conner said.

Gregory A. Hile, lawyer for the community groups claiming to represent 10,000 residents, alleged that the Coastal Commission refused to consider a privately commissioned traffic study showing that congestion at the intersection is now worse than government studies show and will deteriorate even more rapidly.

Two representatives of the opposition tried to attend a Coastal Commission meeting in Redding in Northern California on Aug. 14 in order to present a traffic study, but their plane was diverted because of fog.

Considered Delay

Commission members considered delaying the discussion, then rejected the idea and approved Stein-Brief’s plans on a 7-5 vote.

Conner contended that the commission already had three separate studies of the effects of the commercial center on traffic. He argued successfully that the challengers had every opportunity to make their views known and failed to do so.

Seymour noted that the commission had been “saturated” with traffic studies. The judge decided that the association’s “11th-hour request for a continuance” was insufficient to justify overturning the commission.

Wilkins, a leader of the opposition, said the study never seen by the Coastal Commission proved that Coast Highway was designed to carry much less traffic than will be generated after the commercial development.

“Coast Highway will be a parking lot,” Wilkins said.

Hile said he is considering an appeal.

Conner, for Stein-Brief, said he would consider suing the challengers for malicious prosecution if they do appeal.