Proposed Lease Called ‘Economic Blackmail’ : Development: New owners of Treasure Island mobile home park would fine tenants who publicly criticized their plans. The dispute is the latest in a longstanding feud.

Under a new lease agreement proposed by the owners of the Treasure Island mobile home park, tenants would be forbidden to speak out publicly against the owners’ long-term plans for closing the park and redeveloping 27 acres of prime oceanfront property.

Tenants who criticize the landlords at a public forum or write letters of opposition to their development plans would be fined 25% to 50% of the value of their mobile homes, according to a copy of the lease agreement.

Treasure Island Residents Assn. President Michael Kenney assailed the provision as “economic blackmail.” Park residents apparently agreed, voting overwhelmingly at a tenants’ meeting Sunday to reject the new lease, sending the tense negotiations to mediation.

Treasure Island Associates, the park owner, had stipulated that it would not honor the lease agreement unless it was supported by 80% of the park’s 265 tenants. Instead, the agreement was defeated by 82%, Kenney said Monday after the ballots were counted.

The recent dispute is the latest episode in a longstanding feud between park residents and Treasure Island Associates, which bought the property last August. The new owner originally had offered residents a 10-year lease that called for a 20% increase in lease payments their first year and 7% each subsequent year. Residents now pay between $400 and $1,700 per month depending on the size and location of their mobile homes.

Residents said such increases would force them out, clearing the way for multimillion-dollar homes. In response to their complaints, the Laguna Beach City Council enacted sweeping changes last month that locked in zoning at Treasure Island and put a 70-day rent freeze on all three mobile home parks in the city.

Since then, tenants and management have been negotiating to draft a new, 10-year lease agreement. Once that expires, Treasure Island Associates would pay the tenants for their mobile homes, then redevelop the property.

Richard A. Hall, a partner in the company, said Treasure Island Associates may consider replacing the mobile home park with an upscale hotel. He denied charges that the lease infringes upon tenants’ rights, saying the company had made various concessions based on future income that would be derived by developing the property.

“We’re giving them a lot of things in the lease, so we didn’t want to offer them a lease if they were going to continue to oppose us,” Hall said. “It’s not risk-free for us either. It’s an agreement where we were going to give up some of our rights so these people would not oppose us.”

Tenants, however, were angered by what some called a “gag order.”

“What I find so obnoxious is not an abridgment of my rights because they can’t force me to sign the lease,” Kenney said. “But they are economically blackmailing people into giving up their First Amendment rights.”

Another resident who declined to give her name agreed.

“I think it’s scary when someone can force you under duress to sign something that takes away your civil rights,” she said. “That kind of thing can snowball into all kinds of stuff. . . . I have the feeling they’re going to get whatever they want anyway no matter how much we scream and moan.”