Hillside Owners Lose Claim Against Laguna

A judge on Monday rejected a challenge to zoning policies in Laguna Beach, ruling that owners of undeveloped land on a hill overlooking the ocean may not force the city to either approve home-building plans or buy the property.

Orange County Superior Court Judge Jerrold S. Oliver denied the homeowners’ claim to $6 million, which they contend is the value of the land without building restrictions.

Laguna Beach City Atty. Philip D. Kohn said he was pleased with the decision. Homeowners still have the option of improving the narrow hillside roads up to city standards, Kohn said.

Owners of 39 lots in the 62-year-old subdivision near Arch Beach Heights claim that a city ordinance requires them to improve and widen a narrow road leading to the lots before homes may be built. The road improvements would cost millions, the homeowners say and argue that the ordinance is a veiled attempt to prohibit building on the hill.

Joseph M. Gughemetti, the lawyer for the owners, said Laguna Beach had effectively condemned the land and should be forced to buy the lots. They had been purchased between 1959 and 1982 for prices ranging from $901 to $42,000, according to the court records.

Without restrictions, each lot would be worth $100,000 to $175,000, Gughemetti said.

Oliver ruled that the roads running up the hill are city streets but that Laguna Beach has no legal obligation to improve or maintain them.

Kohn maintained that the requirement of street improvements before building is reasonable and justifiable. He suggested that the lot owners are speculators who paid a fraction of the market price for lots without building restrictions in the hope of receiving a “windfall” at the expense of city taxpayers.