Sun Set a Long Time Ago on Ex-Beach Oasis : Redevelopment: Improvements have languished because of red tape and concerns that the property may be endangered by landslides.

For more than 50 years, the sleek building has been a Pacific Coast Highway landmark.

When it opened in 1938, Carl’s Sea Air was a one-stop oasis for food, gas and a motel room--a monument to Southern California’s emerging car culture.

By the mid-1970s, the property at the foot of the Pacific Palisades bluffs had evolved into the Sunspot, a bar and mecca for the disco dance craze.

But for the last 5 1/2 years, since the Sunspot closed its doors, the property has been renowned for all the wrong reasons: Dust covers the fine Streamline Moderne architecture; graffiti spot the walls; windows are shattered, and nearby palms and banana plants are dying.

The old Sunspot, north of Chautauqua Boulevard, has become an eyesore for thousands of commuters who drive by each day on the Pacific Coast Highway. And it has been a heartache for the Los Angeles Department of Recreation and Parks, which expected the building to be renovated by now as a bar and restaurant that would be a major moneymaker for the financially strapped city.

Instead, improvements have languished because of red tape and concerns that the property may be endangered by landslides. Los Angeles, which has owned the site since the 1960s, has lost as much as $1.7 million in rent over five years. And a new revenue-producing establishment is not expected to open for another year, or more.

Despite the problems, city officials remain committed to refurbishing the property and turning it into a moneymaker. Plans call for a private operator, restaurateur Andy Camacho, to open a family-oriented restaurant and adjoining bar. The rent that Camacho pays will be used by the city to help pay for a massive public works project--the landfill and construction of a park in Potrero Canyon, immediately behind the property.

“I still see the possibility of this thing being realized and becoming a very valuable asset to Potrero Canyon and to the city,” said Keith Fitzgerald, the analyst for the Department of Recreation and Parks who manages the property for the city.

Camacho, who first submitted his renovation plans in 1986, has said he will remain on the project despite the delays. “I think there is potential there,” Camacho said. “My accountants and my lawyers say I’m crazy, but I just have to have some faith. . . . I think it’s a tremendous project.”

Camacho plans to decorate the restaurant, tentatively called the Tides Inn, in a “beach-surfer” theme, complete with sand and a volleyball court out front. Food will be casual, with entrees priced at “$10 or $11, at most,” Camacho said.

But some Pacific Palisades residents would just as soon see the building torn down.

“It should be abandoned and destroyed,” said Jack Allen, president of the Pacific Palisades Residents Assn. “At one time it was a landmark, but they have destroyed it so much now. And we are not interested in having any commercial activity in that area, right next to the park and the beach.”

Many residents remain opposed to redevelopment of the property, but say they have seen little chance of stopping the project since Camacho’s plans were initially approved five years ago.

And city officials remain committed to what they see as a crucial link in one of the city’s most ambitious park projects. Recreation and Parks planners describe the property, and Potrero Canyon behind it, as a bridge between the Pacific Palisades Recreation Center, atop the bluffs, and Will Rogers State Beach.

The land was acquired in a swap with Occidental Petroleum Corp., which got an adjacent property where it hoped to drill for oil. That plan has since been abandoned.

City officials also expected to make money from their new acquisition by renting the historic motel and restaurant to concessionaires.

But by the mid-1980s they had become disillusioned with the Sunspot. The bar and disco did not fit the family entertainment orientation of a recreation department. And Sunspot operator Edward Andrews had failed to improve the property as he promised, Fitzgerald said.

The city evicted Andrews in 1986 and requested proposals for a new operator to run the property for three to six years, the time it would take to complete the massive landfill in the canyon that will create the base for the new park.

Businessman and attorney Camacho made the only offer, to rehabilitate the Sunspot as a restaurant, lounge and motel to be called the Tides Inn.

City officials said other business people may have been discouraged because the short term of the lease would leave them less time to recoup their investment. The officials added that they were happy with the lone proposal because Camacho already operated a successful concession for the city--El Paseo restaurant on Olvera Street.

But problems cropped up from the very beginning.

The success of the property had always been hamstrung by its lack of parking--only 20 spaces. But city officials say they had been assured by state Department of Parks and Recreation that an adjoining property could be made available for a sizable parking lot.

As it turned out, Caltrans also had a claim to the land, using it to store heavy equipment for repairs on the Coast Highway.

It took three years for the Department of Recreation and Parks and Caltrans to negotiate a lease for the adjoining property, as talks bogged down on the issues of how much the city should have to pay and whether it should assume liability for all lawsuits stemming from use of the land.

The matter was finally resolved in 1989 and was creeping through the city bureaucracy last year, only to have two other dilemmas sidetrack matters.

In October, a city zoning official rejected plans for construction of a 1 1/2-acre, 131-space parking lot. Associate Zoning Administrator Albert Landini said studies for the parking lot did not adequately assess the danger of landslides.

“Should a mudslide occur when the parking lot is full of people and automobiles,” Landini wrote, “it could cause a major catastrophe.”

He said the plans also lacked an adequate assessment of environmental impacts of the parking lot and failed to describe how cars would enter and exit busy Pacific Coast Highway, where only a temporary traffic signal slows a torrent of cars.

At the same time, another City Hall official raised concerns that the restaurant building could also be in danger from landslides. Gerald Takaki of the Department of Building and Safety said last October that, because of known instability in the area, the Sunspot was at “moderate to high risk” of suffering landslide damage.

Recreation and Parks officials had never anticipated such problems, despite a history of landslides in neighboring Potrero Canyon dating back at least 50 years. No one had ever raised the possibility that the Sunspot property might be unsafe, they said.

“It just never came up,” Fitzgerald said.

Landslide fears have sent city planners back to the drawing board to reconstruct plans for a parking lot. Planning could take a year or more, including obtaining construction approval from the State Coastal Commission.

Assuring that the restaurant is safe will also be a major undertaking. City officials now estimate it will cost $800,000 to grade and reinforce the Pacific Palisades bluffs, so they don’t come rolling down on top of the old Sunspot.

Until that project is complete, no work on the interior of the restaurant can begin, Fitzgerald said.

The delays have left Camacho’s plans hanging, nearly five years after he was awarded the contract for the operation.

Negotiations are under way to help make the long wait more palatable financially for the restaurateur. Under one proposal, Camacho might be offered a reduction in future rental payments if he pays to stabilize the hillside.

Fitzgerald praised the businessman for remaining with the project. “He has a big investment hanging out there,” Fitzgerald said. “He has been very patient.”