Open-Space Decision: Cause for Celebration : Laguna Canyon: Opposing parties shed bitter feelings of long battle to toast the preservation agreement.

The private celebration at the posh Center Club in Costa Mesa a week before last Tuesday’s election demonstrated how far they had come.

After dining on exotic foods and toasting the historic agreement to preserve Laguna Canyon--one of the last undeveloped coastal canyons in Southern California--the motley group of environmentalists, government officials and Irvine Co. executives were entertained by company Vice President Carol Hoffman.

She shed her conservative corporate image to perform a rap song--a satire that included a spoof of Irvine Co. Chairman Donald L. Bren.

“Save the canyon, buy the canyon, save the canyon, buy,” she said rhythmically.

The relaxed atmosphere that evening was in stark contrast to the bitter feelings of a year ago today when environmentalists and city officials led almost 8,000 people in a march through the canyon to protest the company’s plans for a residential and commercial complex on the pristine countryside.

But after approaching each other at the negotiating table earlier this year with caution and trepidation, the bargainers at the table grew to respect each other. So eager were they to strike a deal as talks reached fever pitch in September that they were admonished at one point by those they represented not to give in so easily.

The outcome was a plan that made most everyone happy and won overwhelming approval by the voters in Tuesday’s election.

There was not much hope of such a satisfying deal at the beginning.

The battle to “save the canyon” had dragged on for more than 10 years and citizens had failed to persuade the Orange County Board of Supervisors to reject the development.

Feeling frustrated, Lida Lenney, a Laguna Beach City Council member,wrote a letter to Bren three years ago.

“If you cannot give it to us, help us buy it,” she remembered asking.

As she waited for a response to her request for a meeting with the usually inaccessible Bren, Lenney launched the Laguna Canyon Conservancy to fight for preservation of the canyon. A few months later, that group joined Laguna Greenbelt Inc. in a lawsuit challenging the development agreement between the county and the company.

Lenney, now the Laguna Beach mayor, said Hoffman and other corporate executives scoffed at her idea to buy the land, and so did her colleagues on the council.

“People would say Lida was nuts. This was never going to work,” City Councilman Dan Kenney said recently.

But soon after picketing Bren’s Newport Beach neighborhood last year, Lenney said, she received word that Bren would meet with city officials.

To prepare, she called her brother, Ralph Nichols, a self-made millionaire in Detroit. His advice was, “Remember that every dollar is as important to him as it is to you.”

As expected, Bren did not agree to give up the land, but at least a relationship had been established, she said.

Looking back over those early days of talks between the city and the company, Councilman Robert F. Gentry said both sides were learning that they had to be willing to change their minds about each other.

“I am sure he (Bren) must have had some crazy thoughts walking into that room and knowing he had to meet with Bob Gentry, environmentalist, gay man, advocate for all the things he probably doesn’t stand for.”

“I had felt the same way about him and (Senior Vice President) Gary Hunt. I had never met Gary Hunt before, this slick lawyer who is a hatchet man for the county’s wealthiest man,” he said laughingly.

For its part, the politically influential company already had in hand the development agreement and was not interested in selling the 2,150-acre site--part of which would be used for the San Joaquin Transportation Corridor toll road.

“We felt we had a very good project, and we felt very comfortable with it,” Hunt said of the 3,200-unit Laguna Laurel project, which would have left one-third of the site as open space.

But then came the event that environmentalists believe was what forced Bren to take them seriously--the walk through the canyon that showed how deeply citizens felt about this natural resource.

“I was struck with that--the number of people who turned out,” Bren said in an interview last month. “I believe the number and the sincerity of the people impressed me, and we moved forward with our discussions and our negotiations.”

Proposals were made and rejected during the next few months, and the Laguna Laurel Advisory group--representing environmental groups, the county, city, and the Irvine Co.--was created to find areas of compromise.

The Irvine Co. declared a November deadline to “buy it or build it,” so the committee last summer commissioned a public opinion poll to determine whether Orange County voters would be willing to tax themselves to buy Laguna Canyon land.

Although the poll indicated less than the two-thirds support needed for the bond’s passage, it did convince officials that a solid 55% majority supported preservation of the canyon.

All of a sudden, the city and environmentalists watched county officials warm up to the idea of donating money to land acquisition. Since then, the county has tentatively approved a $10-million contribution--a key element of the final $78-million financing plan.

A follow-up survey showed an even greater margin of support in Laguna Beach, leading the City Council to schedule the $20-million bond election for November without knowing what the final purchase price would be.

Not until late September, when the committee received a land appraisal setting the fair market value of the land at $105 million--did the intense bargaining sessions begin.

Those final three weeks of talks were difficult for the committee, which had to balance what was a fair asking price for the company against what the city could afford. The deal would also have to satisfy the citizens at the table who wanted assurances that the most environmentally sensitive land would be protected.

Another factor, negotiating team members recalled recently, was the obvious pressure the Irvine Co. representatives were feeling from the “Attila the builders” within the company who were opposed to the idea of negotiating.

The company’s first formal offer was $90 million, plus an agreement to pick up the $30.2 million in transportation and sewer improvement costs that the county would still require under the development agreement.

Angered by the proposal, tears filled Lenney’s eyes. The city had hoped to pay only $50 million to $65 million.

“I learned a lot in the course of these negotiations,” Lenney said recently about her emotional outburst, which made some of her negotiating partners uncomfortable. “I have had to give on things I previously would not have given in to.”

Acting as go-between in the negotiations was Paul Freeman, a former legislative aide to one-time Democratic presidential candidate Gary Hart and a sometime lobbyist and public relations consultant. He was hired by the committee to work on the polling and manage the bond campaign.

“Paul was the absolute, indispensable leak through which information would flow,” Laguna Greenbelt President Elisabeth Brown said. Hunt called Freeman’s role “Kissinger-esque style shuttle diplomacy.” Others said he was equally distrusted by all parties, making him an essential tool.

But time was running out for Freeman. He wanted an agreement before an Oct. 9 fund-raiser for the bond campaign.

Ten days before the event, he flew to Arizona to meet with Irvine Co. officials and then caucused with environmentalists in Brown’s living room the next evening to work out a compromise.

Two days later, a tentative agreement was reached by the negotiating committee--or so everyone except the City Council believed.

Although Gentry had expressed a couple of reservations before leaving that session, Lenney endorsed the “agreement in principle” and so did the environmentalists. Freeman and Hunt announced to the news media the details of the tentative pact.

But in a council executive session immediately after the committee meeting, council members who had not participated in the talks questioned the deal--including the proposed $78-million purchase--and the authority of the advisory group to be making the decisions on a financing plan that would ultimately be the city’s responsibility.

This response almost killed any hopes of compromise. The council circumvented the advisory group and ordered City Manager Kenneth C. Frank to ask the Irvine Co. for more concessions, including a $3-million reduction in the purchase price.

While the council considers Frank the best, toughest negotiator on their side, his “take it or leave it” approach on routine city matters has made him a controversial figure, and particularly among environmentalists.

The Irvine Co.’s Hunt and Hoffman heard Frank’s proposal but refused to negotiate with him. They asked for a private session with the entire council, but when that was overruled because it would have violated open meetings law, Gentry asked to take over.

“My gut told me--it was just gut--that Carol (Hoffman) and Gary (Hunt) probably had more trust around me than they did about the bad guy.”

It worked. Between Oct. 5 and 7, when the final agreement was reached, Gentry met with Hunt and Hoffman and then convinced his side that this was the best deal the city and environmentalists would be able to get. Hunt, meanwhile, drove to Los Angeles to update Bren.

Why did the company give in on its earlier commitment not to sell below fair market value?

“Donald (Bren) felt that this was one of those issues and this was one of those times that the company really needed to make the extra effort, to go the extra mile to find a way where the community and the company had won,” Hunt said.

There was also, Freeman said, an acknowledgment of “what the political consequences would be if they did not have the deal.”

Environmentalist Norm Grossman, considered by many to be a key player at the negotiating table, said that while the company is known for wanting to work issues out with the communities where it does business, it also wants a good public relations image.

“This was a project that little old ladies would lie down in front of bulldozers for, and they knew it,” Grossman said.

But the spirit of goodwill may be tested as a new round of talks begins soon over the proposed toll road.

Supervisor Thomas F. Riley said the board’s upcoming vote on the county’s $10-million contribution will be conditioned on the city’s promise not to sue the county to block the toll-road project.

Lenney has signaled that she is not ready to give up that fight, although others may be willing to compromise.

Greenbelt President Brown said the issue will be discussed by her board this week.

“I’ll find out Tuesday how sanguine they are and what are they willing to do.”