Developers’ Gifts Divide Neighbors : Deals: Builders are contributing to homeowner groups that oppose them. The cash payments benefit some, but anger other nearby residents.

As the stakes continue to grow and San Fernando Valley developers increasingly dig into their pockets to satisfy recalcitrant homeowners objecting to projects proposed for their communities, neighbors who were once allies in the fight against development are facing off against each other.

Such was the case recently when the Saddletree Ranch Homeowners Assn. accepted $300,000 from the developer of a proposed business park in exchange for support of the project. For years, members of the Saddletree association and another group, Save Our Sylmar, had shared breathtaking views of the towering San Gabriel Mountains just as they had shared a desire to kill plans for a sprawling industrial development at the mountains’ base. But the Saddletree group’s deal changed all that.

“It was a buyout, very simple,” said Perry Vozzello, an officer of Save Our Sylmar.

Kim Schulte, Saddletree’s vice president, was just as emphatic. “We weren’t bought off,” he replied.

But the Sylmar groups are not alone. The same types of squabbles are taking place in Studio City, Santa Clarita, Venice, the Westside and even tiny Gorman. Increasingly, residents are arguing over money and other perks.

And there are plenty to be had. With their backs up against the wall, developers--who fear their projects will be torpedoed by recalcitrant homeowners--are tempting some neighborhood groups with cash payments.

Others offer residents all sorts of enticements if they sign off on projects. Day care, beach shuttles, community office space, postal stations, street improvements, jogging paths and parks are all negotiable items.

While private deals between builders and residents have become more common, there are no rules dictating what is ethical when parties sit down to talk. But interviews with activists, developers’ attorneys and politicians indicate there are plenty of pitfalls. Activists agree that they must be careful that the deals don’t sully their reputations. Problems can occur when some homeowners hate the same deal that the neighbors down the street love. Neighborhood negotiators are also vulnerable to complaints that they caved in.

“There are certain things you don’t sell away,” said Mary Edwards, an officer with the North Valley Coalition.

Some activists say they merely see their efforts as filling a void left by local government, which has failed to represent them. And the practice generally has been applauded by local officials, who say they feel better about approving a project if their constituents are happy--or at least mollified.

Often what the residents extract from developers simply helps soften the impact a new subdivision or office tower will have on a community. In Sylmar, for instance, the Saddletree tract will erect gates to stop people from using it as a shortcut to the business park, and will plant shrubbery to buffer the noise.

But other community groups have accepted perks which have no relationship to the project. Members of the Studio City Residents Assn., for example, are discussing whether to agree to sign off on a proposed condo conversion in exchange for air conditioners for a nearby elementary school.

The quickest way a neighborhood group can lose credibility is by accepting cash payments, according to many activists and politicians.

The most publicized local case involves the Ma Maison Sofitel, which critics said would wreak havoc on surrounding Westside neighborhoods with an overspill of cars. With the pink hotel already built, several groups launched an attack on the owner’s liquor license application. Faced with the prospect of running a dry hotel, the owner angrily agreed to pay his opponents $250,000 in cash; another $800,000 was set aside to find additional parking.

Laura Lake, president of Friends of Westwood, viewed the payment as a “reparation,” similar to a payment an oil company would be forced to make if it polluted the ocean. A neighborhood preservation fund was established to use the money to fight future building battles.

“If money is to just buy silence, no it isn’t appropriate,” said Lake, whose group has turned down other cash offers.

But Richard Close, president of the Sherman Oaks Homeowners Assn., said many were dismayed at the Ma Maison settlement.

“As a result of the Westside case, a lot of groups talked about how bad it was and I think people have tried to stay away from that,” Close said. What happened in Sylmar, he added, “may be a revival. . . . It’s very attractive for a developer. It costs them a tremendous amount of money for delays. It’s so easy to give $100,000 for street lights and vegetation in order to save $500,000 of delay.”

The Sherman Oaks group was tempted when a builder offered to donate $500,000 to the Santa Monica Mountains Conservancy for the organization’s support of a controversial housing development. The group ultimately decided to decline, to avoid the appearance of impropriety, even though the money would have gone to a worthy cause, Close said.

The Studio City Residents Assn. also squelched a suggestion that cash would make a proposed development easier to swallow.

“We are definitely against cash payments,” said Polly Ward, the group’s president. But she added, in exchange for endorsing projects, the association is “pondering the possibility of having things done for the community.”

“It’s a real ethical question that we all have to address,” said Ward, who was herself the target of some criticism when a trip she took to Japan was paid by a Japanese university that wanted to put a satellite campus in Studio City. Ward said her group had decided to back the university’s plans before she accepted the invitation.

Perhaps one of the biggest local critics of cash payments to neighborhood groups is Los Angeles City Councilman Zev Yaroslavsky, who called the homeowners’ actions in the Ma Maison case “extortion.”

“Cash payments to individuals or homeowner associations or condo associations for no purpose whatsoever other than to create a slush fund which can be used for any purpose . . . is very troubling and in my opinion is wrong,” said Yaroslavsky, who was challenged in his last reelection bid by Lake.

The councilman said he has been approached by Westside businessmen who fear that homeowners will try to pick up some easy money by sabotaging their attempts to obtain liquor licenses.

Stephen Schafhausen, president of the Placerita Canyon Property Owners Assn., said critics should not overlook what developer contributions can buy for a community. In the mid-1980s, his group accepted $500,000 in return for dropping its opposition to the construction of a power plant. The money was earmarked for improving the environment.

In 1987, another company wanting to build a power plant tried to entice the Placerita Canyon group again. This time, Tenneco Oil Co. offered the group $250,000 to drop its opposition. And although they eventually lost the battle, the homeowners rejected the offer and instead used some of the original windfall to fight Tenneco in court.

With the principal basically left intact, Schafhausen said, some of the money has been used to protect oak trees, dredge riverbeds, start a hiking-trail system and support other local groups. But he curtly refused to be specific about how the money has been spent.

People have suggested that “principles were compromised and a group of people took payola and that is incorrect . . . but I’m tired of defending it. If that’s what they want to think let them think that.” But, Schafhausen added, “When we somehow help in a civic way in their neighborhood, I hope they think of that.”

Money has also pitted neighbor against neighbor in the wind-swept ranchlands around the tiny town of Gorman. A company offered to establish a community foundation if residents would stop criticizing its plan to build a massive wind farm. Some liked the idea, while others were insulted, said Mary Carlson, who helped establish Save the Mountain Committee to halt the plan.

Against the wishes of opponents, the foundation was set up in an office in the town of Frazier Park. But the foundation’s sign disappeared the day the county’s Board of Supervisors rejected the plan last year, Carlson said.

Some business people also find the use of the checkbook to silence opposition to a project a disturbing trend. Doug Ring, a Century City attorney who represents many developers, said the practice is still rare, but is occurring more than it did a year or two ago.

“Once the idea is in the marketplace, people realize they have a chance to demand money in return for not objecting” Ring said.

But others disagree.

Mark S. Armbruster, the attorney for the Sylmar developer John Symonds, doesn’t see any trend taking root. Instead, he said it is frustrating when a developer is criticized for trying to be a good neighbor.

“These guys have bent over backwards to work with the community and have tried to make sure they have taken care of adverse impacts,” Armbruster said.

The Saddletree group decided to be pragmatic when it became obvious that it was going to get a new neighbor at Yarnell Street and Foothill Boulevard with or without the group’s blessing, Schulte said. The project became palatable when negotiations led to a reduction of the project and money was offered for such things as landscaping and gates for the subdivision.

In fact, the residents are pleased at the prospects of living next to a high-class corporate neighbor.

“If we get a Warner Center,” Schulte said, “it will make Sylmar a very nice place to live.”