Coastal Agency Rejects Plan for Pebble Beach : * Real estate: Opponents said the agreement to sell golf memberships would have limited public access.

Asserting its power over the state’s shoreline, the California Coastal Commission on Thursday shot down a controversial agreement that would have allowed Pebble Beach Co. to sell memberships at its prestigious golf links on the Monterey coast.

When the 10-1 vote was made official after more than two hours of discussion, applause erupted among scores of Monterey County residents and environmentalists who had spilled over from a packed meeting room onto an adjoining patio at the Monterey Conference Center.

Many of them had spoken out against the plan, saying they feared that it would set a dangerous precedent and could lead to creeping privatization along the entire 1,100-mile stretch of California coastline.

“I’m ecstatic,” Commissioner Lily Cervantes said. “The message to Pebble Beach Co. and to any other company thinking of doing the same thing is that they must follow set procedures.” Under the state’s 1976 Coastal Act, any proposed “change in use” at a coastal property requires a permit and an amendment to the local land use plan, steps that would include a public hearing.

If the company opts not to seek a permit in order to go through with its plan, its other option appears to be to challenge the commission’s jurisdiction in court. Pebble Beach Co. President Tom Oliver said it’s too soon to say what the company will do. “We firmly believe that the Pebble Beach reservations plan is fair and equitable to all parties. It is unfortunate that misinformation and innuendo seem to have clouded what should have been a relatively simple matter.”

The vote handed the company another in a string of setbacks on the membership issue. The Japanese investors who bought the legendary course last year, led by golf course tycoon Minoru Isutani, had counted on membership sales to raise funds to pay back the hefty debt incurred in the $830-million purchase. Last month, the company was forced to negotiate a one-year extension on a key loan that was coming due.

An uproar over the membership plan broke out early this year after speculation began circulating in Japan that Isutani planned to market hundreds of memberships to Japanese executives, possibly for as much as $740,000 each. Suggestions that exclusive contingents of members would monopolize the Pebble Beach course and speculation tying Isutani to organized crime in Japan helped mobilize a vocal opposition.

Since then, the company has attempted vainly to placate opponents by reiterating that it has no intention of shutting out the public from the course, where greens fees run as high as $200 per golfer.

The agreement voted down by the commission was a settlement worked out in July by its own staff members who recommended approval of the plan, Monterey County representatives and lawyers for Pebble Beach. It was designed to allow the company to proceed with membership sales in return for dropping a lawsuit challenging the commission’s jurisdiction in the matter. However, Commissioner Gary Giacomini argued that the panel “would have been selling off parts of the coast every time a big company threatened to sue us.”

Under the agreement, which already had won the approval of the Monterey County Board of Supervisors, Pebble Beach Co. planned to set aside hotel rooms and tee times for members of a new Pebble Beach National Club. The company also agreed to set aside an hour’s worth of tee times for use by the general public. The current policy has no such guaranteed time for “outsiders.”

Among those who spoke in favor of the settlement was Frank A. Iwama, a Sacramento lawyer and third-generation Japanese-American.

Iwama decried the “racism, xenophobia, hysteria, hatred and hyperbole” that he said have characterized the dispute. As a toddler, Iwama said, he spent 2 1/2 years in an Arizona internment camp during World War II.