O.C. Grand Jury Assails Parkland Transaction : Oversight: An inquiry into the signing away of 96 acres in Laguna Niguel won’t prompt criminal charges.

The public’s right to 96 acres of potential Laguna Niguel parkland was signed away in 1988 by inattentive, misinformed public officials and was turned over to a development company that showed “disdain for the system,” the Orange County Grand Jury concluded in a report released Wednesday.

Still, no criminal charges will be sought in the matter, which touched off a flurry of public reaction, prompted a building moratorium on the disputed land and forced some members of the Laguna Niguel City Council to battle a recall threat.

“We had conducted a rather exhaustive criminal investigation and just did not come up with enough to bring any action,” Dist. Atty. Michael R. Capizzi said. “We will not be filing anything because of lack of evidence.”

That, however, did not stop the grand jury from issuing a sharply worded review of the transaction. The panel conducted its own inquiry to determine whether there were problems with the procedures used and to suggest ways that governments might deal with similar issues in the future.

“We were not looking at whether there were criminal activities involved,” grand jury foreman Grant Baldwin said. “But what happened should not have happened, and we were interested in making suggestions to keep it from happening again.”

The grand jury made 14 recommendations to tighten the county’s oversight of land transfers and its review of development maps. The recommendations, some of which already have been implemented, included suggestions for improving public notice on future land transactions.

In its report, the grand jury criticized the county’s planning process, current and former Laguna Niguel officials and the developer, Taylor Woodrow Homes California Ltd. The criticisms were often blunt as grand jurors accused some participants of incompetence and others of skirting the law.

According to the grand jury:

County planning officials failed to notice that a 1985 area plan for the Marina Hills development, Taylor Woodrow’s project, omitted an earlier dedication of parkland and replaced it with plans for homes.

Members of the Laguna Niguel Community Services District, who administered park and recreation facilities before Laguna Niguel became a city, failed to question their staff closely about a 1988 transaction that deeded the parkland back to Taylor Woodrow.

The district manager and its counsel gave the board incomplete and misleading information and then “badly misinterpreted” its vote on the land transaction.

By signing over a quitclaim deed of the 96 acres to Taylor Woodrow while the community services district president was on vacation, James F. Krembas, the district’s vice president, “added confusion to the process.” Krembas’ wife was hired three months later by Taylor Woodrow.

Taylor Woodrow “skirted the fringes of legality” in an effort to expedite its development plans and avoid public scrutiny.

Krembas, Taylor Woodrow officials and other subjects of the grand jury report expressed relief Wednesday that the inquiry had finally been concluded without criminal charges being filed. But several vehemently disputed the grand jury’s findings.

“The grand jury’s report evidences a complete lack of understanding of the land-development process and of the legal rights and obligations of those involved,” Taylor Woodrow officials said in a statement.

Many of the panel’s findings echoed accusations leveled in recent months by community activists enraged by details of a transaction that they say cleared the way for construction of nearly 200 homes on the disputed parcel. About half those houses have already been built.

Several of the critics expressed disappointment Wednesday that there would be no criminal charges filed, but they added that the report will help fuel public demand for change or political retaliation against those responsible.

“This is a major crime,” said Greg DeSantis, a community activist who has been sharply critical of the transaction. “I’m surprised no one’s going to jail over this.”

Art Padgett, co-director of the Laguna Niguel Environmental Coalition, said he expects Krembas and the politicians who approved the deal to suffer when they face reelection next year.

“We have the same people who did this now in control of the city,” he said. “This will be a very big issue in 1992, when the next City Council elections are held.”

As part of its inquiry, the grand jury looked closely at a Jan. 20, 1988, meeting of the Laguna Niguel Community Services District.

At that meeting, the district board approved what members said they believed was a simple swap of land giving three acres to Taylor Woodrow in return for eight acres of parkland. The agenda for that meeting referred to a “boundary adjustment” but never spelled out the 96 acres in question.

“The incompleteness and misleading nature of the information . . . led the directors to conclude that they were approving minor adjustments in the boundaries and not a major land transfer,” the grand jury said.

That meeting was attended by James S. Mocalis, manager of the district, and James S. Okazaki, its counsel. Neither, according to the grand jury, did enough to inform the board directors of what they were doing.

The grand jury “finds it implausible that an experienced administrator with the advice of experienced counsel could have so badly misinterpreted the instructions of the board,” the report states.

Mocalis, who voluntarily appeared before the grand jury during its probe, would not respond to specific findings of the report, which he had not yet read. Okazaki was not available for comment.

Mocalis said, however, that district board members should have understood the item before them. “Any reasonable person attending that meeting had to know what was being proposed,” he said.

Mocalis said the public did not lose any parkland as a result of the Jan. 20, 1988, board action. The county had already approved a tract map that gave Taylor Woodrow the right to develop the property, he said, making the district’s actions and Krembas’ signature a mere formality.

“There was no loss to the public,” he said. “It’s a bunch of smoke that the public lost parkland.”

The grand jury also criticized the board’s directors.

“The Laguna Niguel Community Service District board members should have been more alert,” the grand jury concluded. “Although the board was provided material and oral presentations by district staff which were misleading, the board itself was not entirely naive on land matters. Further questioning by the board of its staff might have elicited more significant facts.”

Krembas defended the board’s action and said he signed the documents only after being assured that they were routine.

“We were acting in good faith,” Krembas said. “We were told it was a simple land swap. If someone had stood up and said, ‘You’re giving away 96 acres,’ we would have said, ‘You gotta be kidding.’ ”

The grand jury’s most pointed criticisms, however, were reserved for Taylor Woodrow, which was accused of manipulating the transaction to its advantage.

“The grand jury finds great difficulty in comprehending the developer’s methodology which, at the least, skirted the fringes of legality,” the report said. “The method used appears to have been for the purpose of expediting the building project, and suggests a disdain for the system and a mistrust of using it properly.”

In their statement, Taylor Woodrow officials angrily rejected that accusation.

“I am personally offended and angered by the suggestion that Taylor Woodrow, in any way, might have ‘skirted the fringes of legality,’ ” said Gordon Tippell, chairman of Taylor Woodrow Homes USA Housing Operations. “Taylor Woodrow has developed projects with more than 3,600 homes in Orange County. We have worked with community groups, commissions, councils and boards. Our record and our reputation . . . is one of quality and integrity.”

In Laguna Niguel, however, the company’s reputation has come under fire since details of the transaction became public last year.

Under pressure by critics of the land deal, the City Council last year adopted a building moratorium on the disputed 96 acres. Taylor Woodrow and the city have each filed suit against one another, and local environmentalists have expressed amazement at the issues documented by the grand jury.

“All that area was supposed to remain as open space,” Padgett said. “There were supposed to be wetlands and birds nesting out there. Instead, there are houses. That area is gone forever.”

Grand Jury Findings

Major criticisms listed by the Orange County Grand Jury in report on the Laguna Niguel land transaction in 1988.

* Laguna Niguel Community Services District board members should have been more alert and questioned their staff about the land swap.

* A 1985 county-approved map showed housing on the 96 acres that had previously been offered as parkland. The grand jury was unable to determine whether that was done deliberately or by accident.

* The events surrounding a Jan. 20, 1988, meeting of the community services district board raised “serious questions of procedures, actions and motives of those involved.”

* Developer Taylor Woodrow Homes California Ltd. “skirted the fringes of legality,” apparently to speed the building project along. The company’s actions suggest its disdain for and mistrust of local land-use procedures.

Source: Orange County Grand Jury