High Fees Cited as Murdock Drops Plan to Sell Lake

Billionaire David H. Murdock, developer of the posh new Lake Sherwood Country Club, has abandoned plans to sell the lake to longtime area homeowners, apparently ending a dispute that has divided the picturesque community for months and which prompted a grand jury investigation last spring.

Murdock announced his decision at a meeting with lake-area property owners Wednesday evening. It was endorsed Friday by an association representing owners of 121 houses and 47 vacant lots around the lake but outside the boundaries of the Murdock development.

“Mr. Murdock has brought back a solution that is acceptable to all of us,” said Carl Price, a Lake Sherwood Community Assn. official. “It does end the controversy.”

Murdock had wanted existing homeowners to buy Lake Sherwood from him for $2.6 million or to join a new community-service district into which they would pay lake maintenance fees. He dropped the plan because the fees were higher than he anticipated and unreasonable, said a spokeswoman for the developer.

County estimates released last week show that service-district fees would have been $1,500 to $2,200 a year for current homeowners, Murdock spokeswoman Elaine Freeman said.

The fees were higher than expected, Freeman said, because only 140 of 600 lots at the new country club--far fewer than anticipated by Murdock--have been recorded for sale and subject to the fee. That means that there are fewer lots among which service fees can be divided.

So for now, Murdock will keep the lake and pay to maintain it, Freeman said. Owners of the 600 luxury homes planned at the 1,900-acre country club will take over that responsibility once sales begin to close, she said. Twelve of the 20 houses under construction are in escrow, having sold for about $1 million each, she said.

Murdock also has begun negotiations with the Conejo Recreation and Parks District about the possibility of giving the lake away and making it public, Freeman said.

In either case, existing residents would not have to share in the purchase of the lake or pay new fees for its maintenance, she said. They currently pay lake-use fees of about $550 a year.

This week’s decision by Murdock is the latest twist in his up-and-down relationship with lake residents. It follows by just a month a push by the developer to create a special district to buy the lake from him with a $4,000 levy against each property owner.

The county Public Works Agency endorsed Murdock’s proposal in September as a way to force longtime homeowners to assume their fair share of lake-maintenance costs.

Indeed, the developer agreed to reimburse the $4,000 lake assessments if existing home and lot owners agreed to join his new community-service district for the country club.

The County Board of Supervisors delayed action on the proposal after angry homeowners protested, claiming that Murdock was reneging on promises he made in 1987 to give Lake Sherwood to the public.

The supervisors were cool to the developer’s lake-purchase proposal, since the county was embroiled last spring in its own dispute with Murdock over whether he had agreed to give the lake to the community as a condition of the supervisors’ 1987 approval of his development.

County lawyers concluded that while Murdock pledged to “dedicate” the lake to the community, dedication was too vague a term to lock the developer legally into giving it away.

Murdock’s proposal to sell the lake led to a county grand jury investigation last spring into whether the developer was breaking promises made to the Lake Sherwood community.

The grand jury, in a June report, faulted county officials for an alleged lack of communication with the developer over whether he could sell the lake.

The grand jury said that Murdock first mentioned selling the lake in early 1988. But it was not until May, 1990, that county officials sought to clarify his legal position.

The grand jury also strongly questioned why county officials would support Murdock’s proposal for a special tax district to assess existing residents for Lake Sherwood. Such a district would benefit only Murdock and could be used to pressure homeowners outside his development into joining a community-service district controlled by buyers of his new homes, the grand jury said.