Parkland Deal Falls Through : Malibu: The 1,600 acres would have been turned into a public park. Federal funds for the $25-million property appear to be unavailable.

A potential transaction in which the investment group that owns the Los Angeles Athletic Club had agreed to sell 1,600 acres of rugged mountain land in Malibu for use as a public park has collapsed.

“It is disappointing, but the financing simply wasn’t there,” said Ruth Kilday, executive director of the Mountains Conservancy Foundation, which had agreed to pay Laaco Ltd., the investment group, $25 million for the property.

The deal, negotiated last spring, was contingent on Congress’ appropriating at least $20 million for the National Park Service to acquire land in the Santa Monica Mountains. Although the lawmakers have yet to decide on the amount, it is certain to be well below $20 million.

A spokesman for Laaco said this week that the group had no immediate plans for the property.

“That’s obviously something that will be decided in due course, but there’s really nothing to report at this time,” spokesman Alex Auerbach said.

Environmentalists and others, who had hailed the potential acquisition as extremely significant, have expressed concern that since the deal has fallen through, Laaco may now attempt to sell the property to a private developer.

The property, which overlooks the Pacific Ocean, stretches from Pacific Coast Highway about four miles into Topanga Canyon on both sides of Topanga Canyon Boulevard.

When the foundation announced the potential acquisition in May, environmentalists called the property, which links the mountains to the sea, “the last piece of a puzzle” in the Santa Monica Mountains.

The property includes a narrow strip along Pacific Coast Highway where there are several businesses and dozens of small homes, whose residents had expressed concern about their future had the foundation acquired it. The property is just outside the boundary of the future city of Malibu.

The foundation is a private, nonprofit land trust set up in 1983 to buy property and hold it until a state or federal agency is able to acquire it. The Santa Monica Mountains Conservancy had agreed to give the foundation $140,000 to help arrange the acquisition, and the Sierra Club had said it was prepared to donate another $100,000.

Had the foundation succeeded in acquiring it, the land would have probably been added to Topanga State Park, which borders it on the north and east, or the Santa Monica Mountains National Recreation Area, depending on whether the state or federal government had taken the lead in acquiring it, sources involved in the negotiation said.

The state has often expressed interest in the property.

Once part of a Spanish land grant known as the Rancho Boca de Santa Monica, the property was involved in a boundary dispute resolved by a land patent signed by President James Garfield in 1881, a month before he was fatally wounded by an assassin’s bullet.

The Athletic Club, founded in 1880, bought the land in the 1930s from newspaper publisher William Randolph Hearst. It has long resisted overtures from the state and private developers to acquire it.

Laaco was formed in 1986, and is majority-owned by the Hathaway family of Los Angeles, which for years has had controlling interest in the Athletic Club. Laaco owns extensive property in downtown Los Angeles, as well as several thousand acres in Kern County that it uses as a duck-hunting preserve for club members. In 1988, it sold the Riviera Country Club in Pacific Palisades to Japanese investors.

The foundation became involved in negotiating for the Malibu property in April after talks between Laaco and a private developer broke off.

At that time, Laaco officials declined to say who may have expressed interest in the property or what kind of use for it they may have had in mind.

However, sources familiar with the negotiation with the foundation speculated that, while Laaco may have obtained a better price from a private developer, any such deal would have likely been contingent on the uncertain prospect of the developer’s plans being approved by the California Coastal Commission.

Despite the setback, Kilday said the foundation is still interested in the land. “We intend to keep our eye on it,” she said. “We hope that in the future we may have another chance at it.”

COLLAPSED DEAL

Shaded area marks 1,600 acres of Malibu land, part of fizzled deal between the Los Angeles Athletic Club and the Mountains Conservancy Foundation. The agreement was contingent on Congress’ appropriating at least $20 million for the National Park Service to acquire parkland. Lawmakers have yet to decide on amount, but it is certain to be well below $20 million.