Hope Land Proposal Rejected by Panel : Development: Coastal Commission vote could jeopardize plans to turn Santa Monica Mountains property into parkland as part of swap.

In a move that could jeopardize efforts to turn thousands of acres in the Santa Monica Mountains owned by entertainer Bob Hope into parkland, the California Coastal Commission on Thursday rejected a developer’s plan to build 26 luxury homes on land that Hope owns in Malibu’s Corral Canyon.

By an 11-1 vote, the state panel, meeting here, turned down a request by Potomac Investment Associates for permission to grade 2.2 million cubic yards of earth to make way for the development. Commission members said the grading would destroy an environmentally sensitive plant and wildlife habitat.

The 339-acre Corral Canyon property is involved in a complex land swap aimed at allowing Hope to develop his 2,308-acre Jordan Ranch property in Ventura County while preserving valuable mountain land as parkland.

In April, as part of the deal, Hope conditionally agreed to turn over to the Santa Monica Mountains Conservancy 170 acres of the Corral Canyon property as part of an elaborate plan in which he would transfer a total of 5,700 acres of mountain land to public use.

In exchange, Hope would get a strip of land that would allow him the access he needs to develop Jordan Ranch. He also would be allowed to develop Corral Canyon and as well as other property he owns in the Santa Susana Mountains, between Malibu and Simi Valley.

If the deal does not go through, however, Hope retains the right to take back his Corral Canyon land and the other mountain property.

Asked whether the land swap was still likely after Thursday’s vote, an attorney for Hope was pessimistic.

“I don’t think it is reasonable to expect Mr. Hope to maintain his offer, but at this moment I wouldn’t be able to say categorically,” Payson Wolff said after the three-hour hearing.

Conservancy officials also offered a dim view of the land swap’s prospects.

“I think it’s tragic, but the land swap may be dead,” said Joseph T. Edmiston, executive director of the Conservancy, the state agency set up to purchase parkland in the Santa Monica Mountains.

But jubilant opponents of the Potomac plan, who had feared that approval might set a devastating precedent for development in the Santa Monica Mountains, hailed the panel’s decision as an important step in preserving the rugged coastal range.

“My faith in the integrity of the Coastal Commission has been reaffirmed,” said Frank Angel, an attorney for the Sierra Club.

A previous developer had received approval from Los Angeles County supervisors last year to develop the Corral Canyon property as a private resort and residential area, including an 18-hole golf course, 60 homes, six tennis courts and two restaurants.

However, the proposal was quickly beset by problems. In February, Atty Gen. John K. Van de Kamp asked a judge to overturn the approval on grounds that county planners and the supervisors had failed to adequately analyze the environmental effects. That case is pending.

Other lawsuits were filed by the Sierra Club, the Natural Resources Defense Council and a Malibu homeowners’ group.

Potomac acquired the option to develop Corral Canyon in August.

Peter Kyros, an executive with Potomac, which also has the option to develop the Jordan Ranch properties, also expressed doubts about the land swap’s prospects.

Until last week, Potomac had intended to seek Coastal Commission approval to grade more than 6 million cubic yards of earth to make way for a 48-home development in Corral Canyon. When the Coastal Commission’s staff indicated that it would urge the panel to reject the proposal, Potomac hastily scaled down its application to 2.2 million cubic yards and 26 homes.

At the same time, the conservancy, seeking to keep the land swap alive while preserving as much of Corral Canyon as possible, expressed interest in buying 320 of the 339 acres for about $9 million, while offering its support before the commission to win approval of the scaled-down project. The luxury homes would be built on the remaining 19 acres.

Negotiations between Potomac and the conservancy broke off abruptly on Monday.

At the hearing, Joseph Petrillo, attorney for Potomac, portrayed the company’s scaled-down proposal as “setting a positive precedent,” saying that despite the grading, “all but a few acres of the property would end up being used for parks.”

But several commissioners were very critical of the project, including Gary Giacomini, who also criticized the conservancy for supporting it.

“When you start with an insane project and come off of that to something that is merely absurd, that’s an insult to this commission,” he said.