Testing the Waters : $500-Million Development Proposed for Placid Lake Sherwood Is Focal Point of Intense Scrutiny

The salvation of Lake Sherwood, a 160-acre man-made lake threatened with extinction in the Santa Monica Mountains, came about after an exchange between a longtime resident and multimillionaire David H. Murdock in a chance meeting that quickly became local legend.

The resident, retired Walt Disney Studios writer and producer Jack Speirs, was at Murdock’s nearby horse and cattle ranch buying firewood three years ago when Murdock drove up and complained about the lake, which had been drained by its former owner.

“I told him I couldn’t do anything because I didn’t own the lake, but I said, ‘Why don’t you buy it?’ ” recalled Speirs. “He said, ‘I just may do that,’ and drove off.”

Murdock took Speirs’ suggestion. Now, after spending $2 million to refill and restore Lake Sherwood, the Murdock Development Co. is seeking the county’s approval to develop 700 homes, an 18-hole golf course, marina and country club on about 1,800 acres that surround the lake.

Decision in July

Ventura County’s Board of Supervisors must decide in July whether to allow Murdock’s proposed Lake Sherwood project to move ahead, despite its conflict with several longstanding county policies that forbid large-scale development in such rural areas.

Meanwhile, Thousand Oaks officials have begun an 11th-hour effort to include Lake Sherwood in the city’s long-range annexation plans, a move opposed by most lake residents. If successful, Thousand Oaks officials could force costly changes in the Murdock development to comply with the city’s building codes, which are more restrictive than the county’s standards.

As the Ventura County Planning Commission prepares for public hearings on the project starting June 11, all but a handful of the 122 Lake Sherwood homeowners have declared support for Murdock’s plan, say homeowner association representatives.

Murdock has promised residents continued preservation of the lake, as well as new sewer and water systems, in exchange for their willingness to accept an estimated 2,000 new neighbors to the secluded lakeside community.

Majority in Favor

“The attitude of the majority of us is that the best opportunity we have to support the lake is to go along with Murdock,” said Dr. Richard Colvin, president of the Lake Sherwood Community Assn. “He is approachable, puts on a high-class show, and he lives across the street.”

Murdock has met several times with homeowners to hear whatever complaints they had about the proposed project. Two weeks ago he played host at a brunch and horse show at his Hidden Valley ranch for nearly 300 area residents.

Murdock acknowledged at the brunch that Speirs gave him the original idea to buy Lake Sherwood, said residents who attended.

The public-relations efforts have convinced many residents that the Los Angeles-based developer and financier, whose personal wealth is estimated to exceed $500 million, has the best plan for saving Lake Sherwood, even though the homeowners will have to bear the costs of maintaining the lake once the development is completed.

No one knows, however, how much it will cost the residents.

‘I’m Tired of It

“I’ve lived here for 20 years with the ups and downs of lake maintenance. I’m tired of it,” Colvin said. “If the lake is going to be maintained, it has to have a substantial economic base.”

Murdock, who amassed his fortune through developing offices and shopping centers and investing in the stock market, declined to be interviewed.

His proposed development calls for construction of about 250 single-family homes and town houses on the north side of the lake. The remaining homes are planned for a gated community on the southern and western sides--next to a private championship golf course designed by six-time Master’s winner Jack Nicklaus--and on lakefront properties now owned by Murdock.

The development will be exclusive, private and expensive, project manager Nick Gorely said. About half the new homes will sit on one- to 80-acre lots that will sell for as much as $1 million and more for the land alone, he said.

County officials estimate the total value of the development, once completed, will be about half a billion dollars. Murdock Development Co. officials will not say how much their project will be worth, nor how much Murdock paid for the lake and surrounding property.

“Opening up the lake to the public would have a negative economic impact,” Gorely said, so the use of Lake Sherwood will be limited to residents, he said.

That policy has drawn criticism from the Santa Monica Mountains Conservancy, a state agency that tried unsuccessfully to negotiate a $2-million purchase of the lakeside property for public use from Lake Sherwood’s previous owner, Dayton Realty Co. of Beverly Hills.

When a similar offer was made to Murdock’s representatives, “it was made very clear after a few sessions that there wasn’t a place for the public in his development plan,” conservancy staff member Sonja Thompson said. Up until 1984, the public had been able to use the lake for a $2 daily fee.

Although the conservancy has no regulatory authority over the development, it has since pointed out to Ventura County officials that Murdock’s project would violate the Santa Monica Mountains Comprehensive Plan, the county’s general plan and recommended population limits for the area.

The single greatest obstacle to the project’s approval is a longstanding county policy limiting development to cities, county officials said.

The Board of Supervisors has generally denied large-scale developments in unincorporated county areas such as Lake Sherwood, both to preserve their rural character and to force cities, instead of the county, to bear the costs of providing services such as police and fire protection.

At Odds With Policy

“This project would be at odds with that policy,” said Bruce Smith, supervisor of the county’s general plan. In addition, Murdock’s proposal would more than double the population recommended by planners for the area, now mostly zoned for rural uses and open space, he said.

For county officials to make the necessary changes in its general plan and zoning, Murdock would have to show that his development would best serve the public, Smith said.

“There are a fair number of existing dwellings around the lake with problems that could be addressed by the development, things such as sewers, water quality, access and lake management,” he said.

Murdock has told residents that his project would provide them with new sewer and water lines to replace the generations-old septic tanks and well-water systems now in place. The project would also include a new four-lane section of Portrero Road to connect the southwestern edge of Westlake Village to the eastern shore of Lake Sherwood.

The benefits to residents will figure prominently in the final decision by the Board of Supervisors, said Supervisor Madge Schaefer, whose 2nd District includes Lake Sherwood. She said aging septic tanks and poor-quality well water in the area have created health and safety problems that could be solved with Murdock’s development.

Referring to the existing county policies restricting large-scale development around Lake Sherwood, Schaefer said, “There are exceptions to every rule.”

Thousand Oaks’ Interest

As county officials wrestle with whether to approve the project, the nearby city of Thousand Oaks is also trying to gain some authority over the Murdock development. The City Council this spring began a study to include Lake Sherwood in its sphere of influence, a designation for future annexation.

Because the Murdock development may create too much traffic and other problems for nearby Thousand Oaks residents, city officials want the power to review and modify the project according to city codes.

But county officials say the move has come too late. Even Thousand Oaks City Councilman Lee Laxdal, a strong advocate of requiring the project to comply with his city’s more restrictive building codes, conceded that “it’s a horse race.”

“We can at least try,” Laxdal said.

A 1980 development proposal by Dayton Realty Co., the former owner of Lake Sherwood, was not as popular as Murdock’s plan appears to be with county officials and residents. The Board of Supervisors denied Dayton’s plan to build 1,400 homes around the lake.

The firm drained the lake in May, 1984, after winning a court battle with residents who opposed the action. The company said the draining was necessary to inspect the Lake Sherwood dam, but area homeowners contended that it was unnecessary and a retaliation for their opposition to Dayton’s proposal.

The lake remained dry until February, 1986, when Murdock fulfilled his promise and gained the loyalty of many area residents.

Lake Sherwood resident Donna Kamen said she had returned from vacation the day after the lake was refilled. “To see water in front of my home again was the biggest thrill, I couldn’t believe it,” she said.

Kamen and other residents said they trust Murdock because “he has done what he said he was going to do.”

“Murdock built a bridge, repaired the dam, trimmed trees, and people have come to believe,” said resident Speirs, who moved to the lake in 1943. “It would be nice if this place could stay a little country lake, but it can’t.”