Downright Unneighborly : Residents of Rural Laguna Area, Future Homeowners Square Off

From the patio of her home high in the hills of Laguna Beach, Jessica Clark likes to snack on a juicy pear or a nut picked from her back-yard orchard and “watch the whales go by.”

Clark, 66, built the house 35 years ago for her mother and moved there herself when she retired from her job as an airline ticketing manager. She loves the area, known as the Diamond-Crestview neighborhood, for its winding dirt roads and quiet, rural atmosphere.

Clark raises peacocks, geese and chickens. She collects freshly laid, green-hued eggs for her own cooking and to give to neighbors who live down the road where coyotes roam freely.

But Clark and other residents of Diamond-Crestview are apprehensively counting the months until their cherished lifestyle will end abruptly with the rumble of bulldozers and construction crews.

For decades, say residents of the area, they believed the neighborhood’s roads, which are mostly unpaved, belonged to them. That, they explain, is why they labored to fill potholes and line the roads near their homes with ornamental trees.

They knew that the neighborhood was subdivided for many more homes, but the city assured them that the other lots would never be developed because the streets were too narrow.

But nearly two years ago a state appellate court said the community and city were wrong. The 4th District Court of Appeal ruled that the neighborhood streets belonged to the city, which had to assume responsibility of doing whatever was necessary to bring them up to standards or purchase the undeveloped lots from their owners.

The city subsequently promised to widen and pave the streets by October, 1993. After that, nothing will prevent construction of 103 more homes in the neighborhood. And with their appearance, a rural lifestyle will fade out of existence.

Nestled against steep hillsides now are 56 homes, an eclectic mix ranging from a replica of a Greek villa to large contemporary structures to 1920s vintage charmers with wood floors and fireplaces built by the Skidmore brothers, who originally subdivided the whole area in 1925. Some of the homes are in clusters, but many are separated by acres of green and brown chaparral. All have spectacular ocean views.

Those who live there range from the very affluent to schoolteachers, artists and retirees who no longer could afford to buy their homes that now would sell for between $450,000 and $2 million.

The 41-acre neighborhood is reached from Coast Highway by Diamond Street. For the uninitiated, the drive up Diamond can be harrowing. The curving, two-way street is wide enough only for a single car and, with no lights, is dark after sundown.

With the court ruling, residents say the essence and the charm of the area will change forever.

“It is changing the entire character of the neighborhood,” complained G. Ray Kerciu, an art instructor at Cal State Fullerton and vice chairman of the Upper Diamond Homeowners Assn.

On a walking tour of the area, Kerciu and Dave Schaar, a realtor and co-chairman of the homeowners group, pointed out native vegetation, including fragrant wild anise and thyme and toyon bushes with green berries that will blush bright red at Christmas.

They observed deer paths meandering through the chaparral, delicate quail tracks on a dirt road and a large hollow tree stump that each spring serves as a nursery for a family of great horned owls.

“There are deer at my front yard in the morning,” said Sally Wilde, a potter and longtime community leader. “In the 22 years I have been here I have seen more animals, not less, as they are pressed out of other developing parts of the city. It has become a refuge.”

Residents bemoan that most of the natural beauty, as well as wildlife habitat, will be lost as rows of housing pads are cut into the hillsides.

Moreover, they contend the widening of streets and addition of homes will generate an urban stream of traffic that will flow troublesomely close to existing residences.

“We don’t consider the road-widening to be an improvement because we lose our privacy,” Kerciu said. As an added insult, he added, homeowners fear that they may be required to pay the cost of the sewers, roads and other infrastructure that will pave the way for the new development.

Standing to benefit from the court decision, however, are owners of the undeveloped lots, led by a group of 14 landowners, who, in the summer of 1985, were determined to sue the city to show that laws preventing more homes from being built were unjust.

In winning the lawsuit, these landowners have dramatically increased the value of their properties, real estate experts say. According to court documents, most paid an average of $9,000 for 39 lots that are now estimated each to be worth between $300,000 and $400,000 each. Most of the plaintiffs own one or two lots; one owns 23.

Some of the undeveloped lots were purchased as long ago as 1959, but six lots were bought in 1983 by organizers of the lawsuit against the city, who were betting that their interpretation of the law would win out.

While leaders of the Diamond-Crestview neighborhood contend that organizers of the lawsuit were motivated by “greed,” the plaintiffs respond that over the years they have paid mortgages and taxes on land that a privileged few have used for free as their private park.

David Spangenberg, now a San Francisco attorney, said he was a realtor in Laguna Beach when he became incensed by the city’s treatment of lot owners in Diamond-Crestview. So about 10 years ago, he said, he bought several lots in foreclosure for $20,000 to $45,000 each and organized a group of plaintiffs to take on the city.

“I feel I did something I wanted to do and I was right. I guess it was validating,” Spangenberg said of his legal victory.

But the lot owners’ battle with the city may not be over, said the plaintiffs’ attorney, Joseph Gughemetti, who is threatening to take Laguna Beach back to court to collect millions in damages if the city does not speed up the process of putting in streets and allowing further home building.

Concerned that the city was not moving fast enough, the plaintiffs took their complaint back to Orange County Superior Court earlier this year to force the city to adopt a timetable for completion of the street improvements.

City officials say they sympathize with the worries of current Diamond-Crestview residents.

“The city is as upset and aggravated as anyone else about the court’s decision,” said Laguna Beach City Atty. Philip Kohn.

Before letting development go forward, the city has begun to hold workshops on creating a “specific” plan to address such issues as preserving important natural habitats and endangered species as well as the area’s rural character.

“I think the objective of the plan will be to maintain the rustic atmosphere that exists in the neighborhood,” said Kyle Butterwick, the city’s director of community development.

This goal will be difficult, he acknowledged, because the area is “already subdivided into relatively small lots.” In an attempt to reduce the density of development, the city earlier this year merged adjacent lots belonging to the same landowners.

In an effort to promote a rural feeling in the area, Butterwick said, streets will probably be built narrower than the standard 20-foot width and with rolled curbs. Special development guidelines will be adopted to limit the size of new homes that are built and to “try to keep the scale of the development in character with the neighborhood,” he added.

The city also has hired a consultant to make a detailed environmental assessment of the area. Butterwick said there is speculation that the area’s coastal sage may be home to the California gnatcatcher, the tiny songbird recently recommended for protection by placement on the federal endangered species list.

Butterwick said it is already known that Diamond-Crestview contains some sensitive plant species as well as important deer-migration corridors.

If the city determines that some natural resources should be preserved, he said, certain lots might be purchased by the area’s residents and maintained as open space or parks. Another option, he said, might be to require that important natural habitats on particular lots be spared from construction.

All of this talk angers Gughemetti, who said on behalf of the lot owners: “If (city officials) do not put in the streets in a timely manner and let everyone build conventional, regular-sized homes like everyone else in the neighborhood, we will go back to the court and make them pay for 39 lots,” which he estimated would cost about $15 million.

Moreover, Gughemetti said he believes the lot owners could win a second lawsuit for damages that might force the city into bankruptcy if it does not deal fairly with them.

“There is going to be a day of reckoning and you will be able to put the City Hall up for sale,” he said.

Spangenberg said that because of the animosity between the lot owners and the city, he believes that many people who once planned to build on the properties will instead sell them.

“I think all the fun has gone out of the thought of building,” he said. “I think there is a general fear among single lot owners that if they tried to build a house there they wouldn’t get through the city’s design review, that the city would retaliate.”

Wilde criticized the litigant lot owners for their impatience with the city planning process, which she said must deal with the especially sticky geologic, traffic and other problems that the subdivision poses.

“I am very saddened that a few people, the plaintiffs in the lawsuit, who have been motivated by greed, are rushing the planning,” she complained.

Kerciu said that homeowners are most upset about the prospect of having to foot the bill for the street and sewer improvements that will allow the new construction. A local assessment district is one of the financing options that the city is considering.

Kerciu said some of the residents, especially those on fixed incomes, “are terrified” that they may not be able to afford such an additional tax.

Clark is unhappily resigned to putting up with the noise of construction and the six houses planned to be built near to her own. “I guess I will have to plant more trees to try to block everything out,” she said.