New Contours in a Malibu Land Dispute : Development: The California Coastal Commission is expected to consider Wednesday a new plan for Sheldon Gordon’s excessively graded site.

A developer, whose permit to build four luxury homes was revoked by the California Coastal Commission after he was accused of grading 14 times the amount of earth his permit allowed, has revealed a new plan for his Malibu property.

Developer Sheldon Gordon now wants to build three mansions in the exclusive Sweetwater Mesa area, including a 20,000-square-foot home with two guest houses, three swimming pools, two tennis courts, a two-story horse stable and a barn.

A spokesman for the Coastal Commission hinted last week that the commission’s staff is likely to recommend against the latest proposal to develop the 184-acre property.

The state panel, which meets this week in Monterey, is scheduled to consider the matter on Wednesday.

“I doubt that the recommendation will differ radically from what it has been in the past,” planner Diane Landry said, of the commission’s tough stand against Gordon as a result of the grading.

Gordon, who owns the Ma Maison Sofitel Hotel, in West Hollywood, was accused of grading 560,000 cubic yards of earth, despite a permit that was to have limited the grading to 40,000 cubic yards.

In revoking his permit in June, several commissioners angrily accused Gordon of misleading them about the amount of grading involved and said they would have never approved the work had they known.

The case has become a cause celebre for environmentalists, who hailed the revocation as a stern message to developers in the state’s coastal zone that the panel was ready to clamp down on accused violators of the state’s 1976 Coastal Act.

Wednesday’s hearing is widely viewed as a test of the commission’s will to deal with developers accused of illegal grading within the five-mile coastal zone.

In a lawsuit against Gordon filed in Los Angeles Superior Court, the coastal panel is seeking $1 million in civil penalties against Gordon, and has asked that he be barred from developing the property and that he repair the damage caused by the grading.

Meanwhile, Gordon has filed a lawsuit against the commission asking that the permit be reinstated. He contends that the commissioners acted unlawfully in revoking the permit without proof that he intentionally misled them.

Although the revocation halted future development of the rugged hill property, the action has, until now, left unresolved what is to be done to restore the damage.

Many residents whose homes are near the property and who had opposed the revocation have said that the $1 million Gordon says he has spent to restore some of the damage is not enough. They say that unless he is allowed to finish the project, heavy rains are likely to cause landslides in the exposed hills.

Observers say that in deciding how to treat Gordon’s latest proposal, the coastal panel’s biggest challenge may be in balancing the punishment a majority believe he deserves with the unpleasant possibility that, if future landslides occur, the commission itself may be the target of lawsuits by nearby homeowners.

Gordon’s lawyers and representatives of the Coastal Commission have been trying to negotiate a compromise for several weeks.

According to sources familiar with the negotiations, each side wants the other to drop its lawsuit as a condition to Gordon’s being allowed to move ahead with his project. But the two sides are said to be far apart on the sanctions and the project’s size.

Gordon’s application to reinstate the permit was to have been heard by the commission last month. But its consideration was postponed at the last minute after the two sides agreed to try to settle the lawsuits before the commission considered the matter.

In an interview last month, Joseph Petrillo, an attorney for Gordon, complained that the coastal panel was “trying to squeeze all the profit” out of his client’s proposal as punishment for the grading.

Petrillo said that, by recommending that Gordon be allowed to build homes on only a small portion of the property, the commission staff “seems bent on assuring that there is no way he can come out financially on the project.” He said that his client has invested more than $10 million in the property, including the purchase price.

Petrillo did not return phone calls last week, and Coastal Commission officials declined to comment on the negotiations.

Gordon, who has lived in Malibu for 15 years, bought the property five years ago intending to build a new home there and devote most of the acreage to pasture land for some of his prize-winning jumping horses.

In 1986, the commission approved the project enabling him to subdivide the property into four estates, each with at least 40 acres, but imposed several conditions, including the grading limit.

After investigators for the Coastal Commission discovered the grading violations early last year, the panel immediately issued a stop-work order and later directed Gordon to correct the damage.

The developer said that he has spent more than $1 million to recontour some of the damaged slopes in the hope that the commission would ultimately approve his request to go forward with the work.

Although acknowledging that there was excessive grading on the property, Gordon has said it was done without his knowledge, and he never intentionally misled the commission about the matter.

Last December, the commission staff recommended against revocation. The staff said that, although Gordon had supplied information about the grading that was inaccurate and incomplete, there was no evidence that he had done so intentionally.

However, several weeks before the panel voted 8 to 3 to revoke the permit, the staff reversed itself, saying that Gordon had intentionally misled it. The staff then recommended that the permit be revoked. Gordon’s lawsuit contends that the staff was pressured to change its recommendation by several commissioners who were not in favor of the developer’s plans.