Councilman Calls Deed Error, Not Impropriety : Development: Krembas says he thought the 99-acre giveaway was minor adjustment to earlier transaction.

City Councilman James F. Krembas on Friday denied any impropriety in a transaction in which he signed away the public’s right to 99 acres of open space to a housing developer who three months later hired his wife.

Krembas, acknowledging his role in a 1988 action that is now under investigation by the Orange County district attorney, said he had unknowingly signed away the acreage bordering the Salt Creek Corridor Regional Park.

“There are suggestions that maybe there were improprieties,” Krembas said. “But that hasn’t been said, it’s been hinted. But I’m here to tell you there weren’t.”

Krembas said there was no relationship between his actions as a public official and his wife’s subsequent employment with the developer, Taylor Woodrow Homes California Ltd.

“I’ve got a long record of community service in Laguna Niguel,” Krembas said. “The fact that some action was taken and my wife later went to work for them are not connected. . . .” In the hands of a residential housing developer, officials say, the land is worth from $44 million to $70 million.

Krembas said he signed the deed to Taylor Woodrow under the mistaken belief that it was part of another transaction approved three weeks earlier by the Laguna Niguel Community Services District. Krembas served on the district board before Laguna Niguel incorporated as a city this year.

Krembas said he did not read the deed, dated Feb. 12, 1988, because he assumed that both the CSD attorney and its top staff director had reviewed it.

“As a board member or council member you have to operate under the premise that your staff is looking out for the best benefits of the citizens,” Krembas said. “There was no mention of the 99 acres. . . . When you talk about raw numbers like that, it’s startling and cause for concern.”

However, James Okazaki, then the CSD’s attorney, said Friday that he had no role in preparing or analyzing the deed, known as a quitclaim, which relinquished the public’s right to the 99 acres. His only involvement, he said, was to notarize the signatures of Krembas and the CSD’s general manager, James S. Mocalis.

“I knew nothing about it,” Okazaki said in an interview, adding, “To put 100 houses on open space--that’s unheard of.”

Taylor Woodrow executives did not return calls from The Times on Friday. But on Thursday, the company’s president said the land transfer was entirely proper and had been part of a development agreement approved by the County Board of Supervisors. About 100 houses now stand on the property, part of the Marina Hills subdivision, and more are planned.

On the day of the land transfer, Okazaki said, Mocalis asked him to drive to the district offices from his law firm in San Juan Capistrano.

“All I know is, (Mocalis) said, ‘I need you to come over here and notarize Jim and my signatures,’ ” Okazaki said.

The lawyer said he heard nothing further regarding the transaction until this month, when he was questioned by investigators from the district attorney’s office.

In an interview Thursday, Mocalis told The Times that he did not have a specific recollection of the property transaction in question. But Mocalis said he believed the property at issue was steep hillside land, virtually impossible to develop for homes. Mocalis did not return calls for comment Friday.

Mocalis, who left his job as general manager of the Laguna Niguel district in the spring of 1988, said he was contacted Wednesday by an investigator for the district attorney.

At the time Krembas signed the deed to Taylor Woodrow in February, 1988, he was vice president and one of five directors of the Community Services District, the governing body that oversaw parklands in Laguna Niguel before it became a city this year. Krembas said he signed “several” land documents during that period, when the district was assuming oversight of property previously controlled by the county.

Krembas noted that three weeks before he signed the quitclaim deed for the 99 acres, district directors had voted to swap three acres of steep slopes in the public’s possession in exchange for eight acres of flat land--more suitable for recreational use--from Taylor Woodrow.

After he signed a deed for the swap on Feb. 12, Krembas recalled, he signed a second deed, which he believed was a part of that transaction. In fact, it was the quitclaim to the developer for the 99 acres.

Krembas said Macolis had presented him with the deeds, which the Irvine engineering firm of Hunsaker & Associates was asking district officials to sign. Hunsaker, hired by Taylor Woodrow to draw up site plans for the property, presented the paper work as a “cleanup item” on development plans already approved by the county, Krembas said.

Krembas said he believed the documents authorized minor adjustments to the border between the Marina Hills subdivision and the Salt Creek Corridor Regional Park.

“That’s what we believed we were dealing with--not 99 acres,” Krembas said. The deed “was brought in by Hunsaker, representing Taylor Woodrow. They said they had a condition that needed to be resolved . . . in order for them to develop the property.”

Hunsaker did not return calls from The Times on Friday.

Krembas said he was acting in February, 1988, on behalf of then-district president, and now mayor, Patricia C. Bates.

“If something needed to be signed, then I signed it,” Krembas said. “That’s really routine. . . . Pat went out of town. She went on a ski trip and as next in line I was called, you know, ‘Do you want to get these things recorded?’. . . . I was overseeing the office at that time and fell heir to signing them.”

Bates and other members of the CSD, however, said they were not aware of the land transfer until this spring when questions arose because of the district attorney’s investigation.

Laguna Niguel Councilman Paul Christiansen, who also served on the CSD, disputed Krembas’ portrayal of the land transfers as routine.

Christiansen said that on one occasion when both Bates and Krembas were out of town he had been asked to sign a deed transfering oversight of a coastal park to the city of Dana Point. He did so in the presence of several representatives of the CSD staff, Christiansen said.

“Those documents had been discussed over and over at (public) meetings,” he said. “I virtually memorized the transactions.”

Another former CSD director, James W. Smith, defended Krembas’ actions, saying Friday that it would be unfair to have expected Krembas to grasp the significance of the deeds he signed that day.

“I would support him totally in his statement that he relied on staff to check the document,” Smith said. “Not a single one of us was elected to be technically proficient at legalese.”

Also Friday, Krembas said he was perplexed by reports that records detailing the zoning history of the 99 acres could not be found. Officials at Laguna Niguel City Hall and at the county Planning Department said Friday that those records still had not been located.

“We’re going to put the troops to work to try to locate (them),” Krembas said. “ . . . We need to trace it back. Now it’s inherent to do what we can.”

The district attorney’s investigation into Krembas’ actions was prompted by a written complaint filed in February by a group of slow-growth advocates. The complaint alleged that Krembas acted improperly when he cast a vote this year helping to open up a scenic ridge between Laguna Niguel and Laguna Beach to development.

The complaint alleged that Taylor Woodrow intended to develop homes on the property, which is owned by Las Vegas casino proprietor Jack Binion. Krembas should have abstained, the complaint alleged, because of his wife’s position with Taylor Woodrow.

Krembas, for his part, said that he abstained from any city decision-making affecting Taylor Woodrow after his wife, Jeanette, began working for the firm.

“We understand the conflict-of-interest law,” said Krembas, who also is principal of San Clemente High School, “and I think we are dogged in our determination to avoid even the inference of impropriety.”

Jeanette Krembas was hired as a sales agent in charge of the Laguna Niguel office in May, 1988, earning commissions on the resale of homes in Marina Hills and other Taylor Woodrow developments. She has since been promoted to regional sales manager.

Jeanette Krembas did not return calls from The Times.

The latest public financial disclosure documents filed by James Krembas with the Laguna Niguel City Clerk’s office show that his wife received more than $10,000 in commission income from Taylor Woodrow in 1988. State law does not require public officials to categorize income from spouses with more precision.

Krembas acknowledged that Taylor Woodrow employees were active in his campaign for City Council last year. But he said the employees are longtime personal friends.

City records show that two Taylor Woodrow employees gave a total of $350 to Krembas’ 1989 council campaign. Another Taylor Woodrow employee, whom Krembas identified as his campaign manager, donated $225 worth of election buttons, according to records.

Krembas said Taylor Woodrow hired his wife strictly because of her expertise from 25 years experience in the real estate business.

Noting that his wife is a past president of the local Chamber of Commerce, Krembas said: “You’re talking about somebody who was extremely active, very high-profile in the community on her own. . . . She’s not operating on my coattails.”