Judge Rules Paramount Ranch Approval Legal : Development: Opponents who had said the environmental impact report for the project was inadequate are defeated. Their attorneys plan to appeal.

A Superior Court judge ruled Friday that Los Angeles County acted legally in approving the Paramount Ranch development in Agoura, handing a stinging defeat to opponents who claimed the controversial luxury house development did not get an adequate environmental review.

Under the ruling by Judge David P. Yaffe, construction could start soon on the scenic, oak-studded parcel where the Renaissance Pleasure Faire formerly was held. State and federal parks agencies had tried to buy the 320-acre site for inclusion in the Santa Monica Mountains National Recreation Area.

Lawyers for opponents of the project said they would appeal the decision, and it was uncertain whether the developers would begin work with the case under appeal.

Ezra Raiten, head of Paramount Ranch Estates, owner of the site, would not comment on the decision.

Yaffe ruled on two suits filed last year after the Board of Supervisors approved the 150-house development. The Sierra Club, the Las Virgenes Homeowners Federation and Friends of the Santa Monica Mountains contended that the county violated state law by rubber-stamping the environmental impact report prepared by the developers’ consultants instead of doing their own report or carefully checking the developers’ conclusions.

Attorneys for the county acknowledged that the Paramount Ranch developers hired the consultants to do the report, but said county planners monitored their work at every step.

Yaffe ruled inadmissible some evidence purporting to show that the county had been misled about the identity of the project’s owners and by a financial analysis presented by the developer.

Darlene F. Phillips, a private attorney representing the county, called the ruling “a substantial victory for the county, certainly upholding the process and . . . the good work that was done in this case by the county staff.”

Carl H. Moor, one of the plaintiffs’ attorneys, said the ruling “rewards the county for falling asleep, and it says to everyone who’s applying for a development project, ‘Go ahead and lie to us about the environmental impacts, and as long as we wake up just long enough to glance at the pieces of paper you’ve given us, we’ve complied.’ ”

The case will be appealed and “we’ll win,” Moor said. “I guarantee it.”

The suits involved the county’s practice of letting developers choose and direct consultants who prepare environmental impact reports for their projects. Many cities and counties hire report consultants themselves to guard against bias. But under state law, a planning agency may leave the developer in charge, as long as it verifies that the report is objective and thorough.

In this case, Phillips told the judge, there are “literally hundreds of pages in the record that show independent review” by the county.

The plaintiffs said evidence they obtained through depositions and internal documents in the pretrial discovery process showed that the developers concealed key information from the county.

They cited the repeated insistence of Brian Heller, a Paramount Ranch partner, that he would not negotiate with parks agencies because he was determined to develop the land. “I am not a willing seller,” Heller told the supervisors at a crowded public hearing Dec. 15, 1988.

The next day, however, Raiten’s firm completed purchase of the land for $13.5 million--a sale that had been agreed on months earlier, unknown to the county. Heller continued to pose as owner of the project until after supervisors approved it. But according to discovery documents, he was actually a part-time consultant to Raiten at a fee of $6,500 per month.

Other evidence concerned a financial analysis purporting to show that the project would not be feasible unless the developers could build all the homes they requested.

The County General Plan allowed a maximum of 103 houses on the site. Supervisors were under pressure from park advocates, including members of Southern California’s congressional delegation, to hold the line at 103 houses so the land would not be priced beyond the park agencies’ reach.

In an effort to show that he could not develop the project under the existing zoning, Heller hired a consultant to analyze the feasibility of alternative project designs. He had the consulting firm base its calculations on a land investment cost of $14 million--approximately what Raiten was about to pay. When the calculations showed that an array of designs would be profitable, Heller had the consultant redo the study using a land investment cost of $17.5 million.

The county never saw the first calculations, which did not emerge until this year in pretrial discovery. The second version, described as a “sophisticated financial study,” was submitted by Heller to the county at the Dec. 15 hearing. It was included in the environmental report as part of the justification for “upzoning” the property from 103 to 150 houses.

Lawyers for Raiten and the county said this evidence should be excluded because the court should consider only the information that was before the county when it rendered its decisions.

As part of his ruling Friday, Yaffe excluded the evidence, although he acknowledged that he had not fully reviewed it. He said he would not consider the discovery material because the plaintiffs had not properly organized it.

“You’ve given me some sort of treasure hunt that I’m supposed to embark on,” Yaffe said.

During oral arguments, the validity of the financial analysis was discussed, but it was never explained why the first calculation was not shared with the county.

Defense lawyers said the property’s value exceeded $17.5 million, so use of that figure made the study more accurate. Lawyers for the plaintiffs pointed out that the study identified the $17.5 million as the land’s cost--not its market value.

Yaffe called the issue “a technicality and not a matter of substance.”

Yaffe found one defect in the report: Its omission of a January, 1989, memo from Heller to the county discussing the financial study. The judge ordered the county to add the memo to the report, a formal process that could take a few weeks.

That will “clean up this matter and make this environmental impact report square with the law,” Yaffe said.