County Ordered to Issue Bonds in Abalone Cove Landslide Work

Despite a pending lawsuit that could leave the county liable for $10 million in bonds to pay for landslide abatement work in the Abalone Cove area of Rancho Palos Verdes, a Los Angeles judge has ordered the county to move forward and issue the bonds.

The ruling by Los Angeles Superior Court Judge Eli Chernow is the latest twist in a complex, long-running legal battle over a settlement between the county, the city and a group of homeowners who alleged that excessive water runoff caused the landslide to develop in the 1970s and damage their homes.

Even though the county had agreed to issue the bonds as part of the settlement, it refused to do so after a group of property owners who were not involved in the original suit filed two lawsuits of their own against the county.

Those suits, filed four months ago, contend that the county acted improperly when it created an improvement district in the Abalone Cove area and placed liens on properties to guarantee the bonds.

Rancho Palos Verdes officials hailed the judge’s decision as a victory for the city. The ruling means that the city’s redevelopment agency will receive the bond funds without further delay and will be able to begin the landslide abatement work, they said.

“It’s the difference of the bonds getting issued in the very near future or it drags out and perhaps the bonds are not issued at all,” City Manager Paul Bussey said. “It is extremely important to the Redevelopment Agency and all the people living in the Abalone Cove landslide area.”

“I am pleased we will get the $10 million,” said Bill Griffin, who lives in the landslide area and was one of the plaintiffs in the legal settlement.

“We have to have the $10 million to be reasonably assured we will not slide in the future when the heavy rains come back,” he added.

Under Chernow’s order, which was issued last Friday, the county has 60 days to issue the bonds, according to Deputy County Counsel Frank Scott. The county can challenge the judge’s decision in an appellate court, but a decision on whether to do so has not been made, he said.

“I don’t know what the response of the county will be yet,” Scott said.

Under terms of the 1987 settlement, the county will issue the bonds and buy them itself. It will then defer payments on the principal and interest for 10 years.

Even though county and Rancho Palos Verdes officials maintain that increased property taxes, generated as properties in the area are sold, should pay off the bonds, the county also created an improvement district in the Abalone Cove area and imposed liens on about 200 properties. The liens serve to guarantee the bonds should the property tax increases fail to materialize.

After the two lawsuits were filed in January and the county refused to issue the bonds, the plaintiffs who had entered into the settlement agreement filed a motion with Chernow to force the county to issue the bonds.

“They were using the lawsuits as an excuse not to go forward with the settlement agreement,” said Ron Beck, the attorney representing the plaintiffs who entered into the agreement.

Scott said that as long as the lawsuits challenging the formation of the improvement district are pending, county officials are concerned that there is a chance the county will be unable to establish the improvement district and impose the liens.