R.P.V. Hopes to Stop Landslide for Good : Redevelopment: City wants to issue $10 million in revenue bonds to fund abatement projects in the Portuguese Bend area.

In 1987, Mike Biele bought the ultimate fixer-upper in the Portuguese Bend area of Rancho Palos Verdes--a modest ranch-style house with a foundation that had been severely undermined by a landslide.

For a year and half, the 33-year-old window salesman worked on the house before moving in, elevating it three feet off the ground on steel beams and installing a system to keep the house level if the earth below it should move again.

He has no regrets.

“You really can’t find anything around here comparable for a million bucks,” said Biele, who declined to say how much he had paid for the house. “I’ve got an ocean view, half an acre, horse property, and I can only see one house from mine when I look out.”

Biele is one of dozens of residents in the area who live in homes that were damaged in the 1970s and early ‘80s by the Abalone Cove landslide--a slide that city officials say has now stabilized as a result of various abatement efforts, including the installation of wells that suck water out of the unstable ground.

The city’s redevelopment agency, with the backing of Biele and some of the other residents, is now pursuing a plan that calls for $10 million in revenue bonds to be issued to pay for a host of other abatement projects. The goal is to stop the slide once and for all.

Although the bonds would be guaranteed by hefty liens placed on each property owner in the slide area, many city officials and residents say they are confident that property owners will not be out any money. Under the plan, the bonds will be paid off through property tax increases generated as properties are resold in the future.

But a vocal group of Abalone Cove residents is denouncing the plan, saying homeowners could be stuck paying off liens that in some instances will amount to tens of thousands of dollars.

They also contend that the liens will make it difficult for owners to sell their properties and that the city is abusing the state’s redevelopment law, which was designed to tackle urban blight.

“I think very few of us want this kind of assessment against our property,” said Jack Downhill, who owns just under eight acres in the slide area. He said he has calculated his lien, which would be based on the size of his property as well as on the structures he has built on it, at $88,000.

The proposal to issue the bonds came about because of a lawsuit brought against Los Angeles County and Rancho Palos Verdes by a group of property owners in the slide area. The 48 owners had alleged that excessive water runoff in the area caused the landslide.

As part of a $3.6-million settlement reached in October, 1987, the county agreed to issue the bonds and defer payments for 10 years. Last Tuesday, the Board of Supervisors voted to hold a public hearing Nov. 29 in downtown Los Angeles to take public testimony on the proposal.

Rancho Palos Verdes officials say the proposal calls for liens to be levied on about 105 property owners within an area of about 724 acres. The area is roughly bounded by Portuguese Canyon on the east, Sea Cove Drive extending north to Crest Road on the west, Abalone Cove Beach on the south and to the ridgeline below Crest Road on the north.

When any property is sold and the assessed value is adjusted upward to reflect its current market value, the redevelopment agency will receive the additional property taxes generated to pay off the bonds, city officials said. The agency will also collect the additional property taxes generated by sales within another 275 acres included in the agency’s jurisdiction, but no liens will be placed against those properties, which are outside the area of the Abalone Cove slide.

Bill Griffin, one of the plaintiffs in the lawsuit against the county and city and a staunch supporter of the bond proposal, said the liens placed against the Abalone Cove property owners will probably mean that anyone selling property will have to deduct the lien amount from his sale price.

But Griffin said he is convinced that the additional property taxes generated by sales will pay off the bonds. He estimated that the typical property tax bill for residents, many of whom have lived in the area for years, is $500 annually. A home damaged by the slide and not yet repaired recently sold for more than $500,000, he said. Under Proposition 13, the house would be assessed at approximately 1% of its appraisal, so the tax would be $5,000.

“That’s a tremendous boost” in property tax revenues, Griffin said.

Councilwoman Jacki Bacharach said that, based on studies done by the city, she also believes the bonds can be repaid with property tax revenues. “We have gone through those numbers over and over and over again,” she said. “The only mistake we have found is that we have been too conservative.”

Bacharach also said she does not believe the city is abusing redevelopment law, which was designed to identify blighted areas that could not be improved without government intervention.

“It won’t get improved without some government assistance,” she said of the landslide area.

Critics of the revenue bond plan disagree. An informal group called Friends of the Bend has filed a lawsuit against the city, arguing that the city should never have been allowed to form a redevelopment zone because the area selected is largely undeveloped, open space.

“This is not the right area for redevelopment here and they should not have redevelopment here,” said Alyce Snell, who has lived in the Abalone Cove area about 15 years. “This is not a slum area.”

Snell said the group is appealing a Superior Court decision handed down about three months ago that upheld the city’s view that the slide area is appropriate for redevelopment.

Opponents of the bond plan say that for years they have contributed to an assessment district formed to pay for the dewatering wells and other stabilization work. They also contend that it is unfair to force homeowners who were not plaintiffs in the lawsuit settled in 1987 to abide by its terms, which include the bond sale.

“Most of us were not part of the lawsuit,” Snell said. “When we tried to get into the lawsuit, we were told it was closed and (we) could not get in. And yet our lives are being governed by the lawsuit. . . . It is taxation without representation.”

But it is the idea of having liens placed against their properties--and the possibility that they may have to pay off the lien--that appears to most anger critics of the bond plan. To add insult to injury, owners of vacant property who will have liens levied against them are prohibited from building in the Abalone Cove area because of a city moratorium imposed after the landslide.

“They’re being assessed for benefits that they will never receive,” Downhill said.

Supporters of the plan say that if the work that will be paid for by the bonds stabilizes the slide once and for all, property values should increase. Indeed, Biele said he is willing to take the risk that he may have to ante up $30,000--the amount he calculates his lien would be.

“If they do this stuff and the slide stops, is it worth $30,000?” he asked. “Of course it is.”

Rancho Palos Verdes Landslide Area New property tax revenue generated within the moratorium boundary would pay off $10 million in proposed revenue bonds.