Seeking a New Lease on Trailer Park's Life : Development: Long battle to stay put continues for tenants of Laguna's scenic and low-rent Treasure Island. New owner's plans don't include them.

TIMES STAFF WRITER

Perched atop bluffs that offer a panoramic view of the Pacific Ocean, Treasure Island mobile home park was once a seaside refuge for entertainers seeking rest and relaxation from the pressures of Hollywood.

The late gossip queen Hedda Hopper owned a trailer there, taking breaks from her society column to gaze out past pristine beaches to Santa Catalina Island. Another mobile home, once used by Lucille Ball and Desi Arnaz in the 1954 MGM movie "The Long, Long Trailer," now houses one of the park's current tenants.

Today the 28-acre seaside mobile home park is a hodgepodge of retirees living on fixed incomes, middle-income families, well-to-do professionals and entertainers. For some, Treasure Island is a full-time home. For others, such as the Duke's widow, Pilar Wayne, it is an occasional seaside getaway. For all, it offers rents that are widely considered a steal for prime oceanfront views in Laguna's inflated housing market.

As is often the case under mobile home ownership, Treasure Island residents own their trailers but not the land beneath them. They lease their spaces from the park owners.

But for more than a decade, the politically connected park tenants--backed by a slow-growth City Council--have clung to their unique slice of heaven, successfully fighting off attempts by two successive owners to close Treasure Island and build on the swath of land, one of the most valuable stretches of developable shoreline property in Laguna Beach.

The latest attempt is by the current owner, Costa Mesa-based developer Richard A. Hall, who has visions of condominiums and single-family homes. Those have been put on hold, pending the outcome of lease negotiations between Hall and park tenants.

Two months ago, the City Council stepped in, voting to rezone Laguna's three mobile home parks and designate them to remain used only as trailer parks. Although the vote carried out a plan drafted as part of the South Laguna annexation in 1988, the controversial decision had a significant impact on the current fray at Treasure Island. During a series of emotional public hearings, dozens of Treasure Island tenants testified that they were low-income and would be left homeless if management had its way.

In addition, in direct response to the Treasure Island dispute, the City Council ordered a 70-day moratorium on rent increases to remain in effect until park tenants and owners could agree on a new lease.

On Tuesday, the Treasure Island Residents Organization plans to ask the City Council to continue the rent freeze to Aug. 31 because talks have broken down between the two sides. Tenants also want the city to prohibit any retroactive rent increases, once the freeze expires.

Yet, some people outside the immediate conflict question the propriety of the city's intervention on behalf of the tenants' group. While rents at the park start as low as $400, some tenants are paying as much as $2,100 per month for their space, a rate that could hardly be considered low-income, critics say. Some of the park's part-time residents include entertainers, lawyers, judges, real estate developers and wealthy widows.

"It's a privilege to live there, let's face it," says Linda Gray, a Laguna Beach real estate agent. "We've got homeless people in Laguna, but we're not sticking them in oceanfronts."

"For most of us," she said, "if we find a good deal there is no guarantee that our landlord won't raise the rent or the building won't go condo. What makes those people any different?"

Recently, the owner, Hall, offered tenants a 10-year lease that would compensate them for their mobile homes and pay their relocation costs. But when the lease expired, they would have to move out. Many residents opposed a clause that would have allowed the owner to fine tenants who spoke out publicly against future development plans for the site.

In a vote taken two weeks ago, the tenants rejected the proposed lease agreement. All of the tenants now are on short-term leases.

"It was basically a contract to close the park," says Carol Broscheid, 53, who has lived at Treasure Island six years. "I don't want to have to move but I'm young enough so it wouldn't be such a tremendous hardship. But if I were an older person, I would dread leaving this place."

Yet Hall, who bought the park for $40 million last August in a partnership with Merrill Lynch, says he has been reasonable in offering tenants a long-term lease.

"I've got rights too, to get the best use out of my property," Hall said. "I can understand them not wanting to leave because this is a paradise for these people. But it's unrealistic to think it won't be developed."

On Friday, Hall offered an olive branch of sorts by circulating a one-page letter to tenants that invited them to attend a March 17 meeting to iron out differences.

At that meeting, according to the letter, Hall is going to offer to delete the clause that fines tenants opposing future projects there as long as tenants agree to the other portions of the 10-year lease.

"Please understand that it is our goal throughout the duration of your tenancy to operate the park in a first-class manner, restoring . . . peace and harmony to the community," Hall wrote. "We also agree that we have come so far in pursuit of this goal that we should all make one last special effort to resolve the very few differences that remain."

Under the controversial lease proposal, tenants would face a 10% rent increase in the first year and a yearly 7% increase until the end of the lease agreement, said Hall spokeswoman Ann Romano. At closure of the park, Hall would agree to purchase the trailers at 1990 fair market value.

Hall believes the City Council should not be intervening in the dispute, and accuses the City Council of caving in to pressure from the highly organized tenants group. "What we have," he said, "is a group of wealthy tenants with a lot of history in the community and a persuasive ability with the council. They want to be able to stay here forever."

Yet city officials maintain the issue is a question of "life style." Over the years, Treasure Island has developed into a charming seaside village that has been woven into the fabric of Laguna. Many tenants have built additions to their mobile homes, oftentimes rendering them immobile.

"There are people down there who have serious concerns, and rightly so, about having their way of life interrupted," says Mayor Lida Lenney. "My father used to say possession is nine-tenths of the law. The point is, these people have been living there and their lives are to some extent dependent upon having that as a living place."

For years, few at Treasure Island paid much mind to the then-owners, two brothers from Missouri who bought the property 35 years ago for $500,000. But a decade ago, Howard and Warren Hopkins submitted plans for a 16-story, pyramid-shaped structure containing condominium and rental units, angering park tenants who banded together in protest. County officials shaved nearly 200 units off the original 600-unit proposal and altered the proposed development to time-shares.

"The tenants fought very hard to keep us from getting the plans approved," said Howard Hopkins. "Then, when we got them approved, they were fighting us in every way they could think of. We decided we weren't going to spend a lot of money on something that looked impossible."

The Hopkinses, now both in their late 70s, put the park up for sale. Treasure Island tenants said they offered to buy the property but the owners refused to sell it to them.

"Half of the people would have arranged their own financing," said Michael Kenney, Treasure Island Residents Organization president. "We thought fair play would have come into play. But spite was their motivation. They just did not want to sell it to us."

The Hopkins brothers dispute those claims, saying they wanted to sell the property "as is" and that tenants attached too many conditions for expensive repairs.

Now, the tenants are at odds with Hall, the new owner who also has visions of condominiums and single-family homes at the site. Yet, they remain optimistic.

"Knowing the city of Laguna Beach, they're not going let them (owners) do anything," Broscheid said. The city "will decide what happens here, not the owners."

Staff writer James M. Gomez contributed to this story.

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