Developer Withdraws Plan for Mansions : Malibu: The Coastal Commission had earlier revoked Sheldon Gordon’s permit because of excessive grading on the site, a penalty hailed by environmentalists.

Developer Sheldon Gordon last week abruptly withdrew his latest plan to build three mansions in Malibu’s exclusive Sweetwater Mesa area before the California Coastal Commission could consider the matter.

“Emotions are simply running too high. We’re going to litigate for a while,” said Joseph Petrillo, an attorney for Gordon, after the commission met privately in this Central Coast city for more than an hour Wednesday to discuss how to deal with the matter.

In June, the panel revoked Gordon’s permit to build four luxury homes after he was accused of grading 14 times the amount of earth his permit allowed.

Gordon, who owns the Ma Maison Sofitel Hotel in West Los Angeles, was accused of grading 560,000 cubic yards of earth at his 184-acre property overlooking the Pacific Ocean, exceeding a permit that limited the grading to 40,000 cubic yards.

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

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

Local environmentalists have called it the worst violation of its kind that they can remember in the Malibu area.

Gordon’s latest maneuver means that it may now be up to the courts to decide the fate of the rugged hill property.

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

Gordon’s attempt to renew his plans for the property had been scheduled to be heard last month, but the hearing was postponed after the commission staff and Gordon expressed the hope of settling the lawsuits.

However, commission sources said that the panel remains sharply divided over how the matter should be resolved, with several commissioners favoring tough sanctions against Gordon for the violations but others eager to settle the lawsuits.

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

According to sources familiar with the negotiations, each side wanted the other to drop its lawsuit as a condition to Gordon’s being allowed to move ahead with his project.

With Gordon having withdrawn his application and the talks having broken off, however, the issue of what to do to restore the damage caused by the grading remains unresolved.

Many residents whose homes are near the property and who had opposed the revocation have said that unless Gordon is allowed to finish the project, or unless substantially more restoration work is done, heavy rains are likely to cause landslides in the exposed hills.

Although they have not said so publicly, some officials of the Coastal Commission are concerned that, if the matter remains unresolved and landslides do occur, the panel may become the target of lawsuits from nearby property owners.

Commissioner Madelyn Glickfeld, who lives in Malibu, has been among Gordon’s harshest critics, calling the grading “an environmental crime” and a “project of obscene proportions.”

“I think both sides would have liked to have settled the matter, but speaking personally, I’m most disappointed that Mr. Gordon chose not to have the matter heard,” Glickfeld said.

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 pastureland for some of his prize-winning jumping horses.

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

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

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

In his latest bid to renew the project, Gordon had proposed to build three mansions, including one of nearly 18,000 square feet that would have included two guest houses, three swimming pools, two tennis courts, a two-story horse stable, a riding arena, a hay barn, a bathhouse and a children’s playhouse.

The commission staff estimated that Gordon’s plan, as proposed, would require a total of 730,000 cubic yards of grading, including that necessary to restore the earlier damage, and would include more than 70,000 square feet of building space.

The staff had recommended changes that would have substantially reduced both the grading and the level of development Gordon had proposed for the property. The changes included clustering the homes in a single area of the property, which Gordon insists would prevent him from earning a profit on the project.

The staff had recommended that Gordon post a $1.2-million performance bond to guarantee that vegetation removed by the grading be replaced and that he be required to provide annual progress reports to the commission for the next five years.

The staff also had recommended that Gordon pay to have an independent monitor present at the site whenever future grading occurred. The monitor would have had the authority to stop the work at any time.