Group Gets a 2nd Chance to Buy Canyon : Land: Neighbors have a month to win approval for a special assessment district to fund the purchase.

Despite being short of money and unable to meet a critical deadline, neighbors who want to buy 5 1/2 acres of open land in Pacific Palisades’ Marquez Canyon to keep it from being developed have won a last-minute reprieve from the Santa Monica Mountains Conservancy.

The conservancy’s board of directors this week unanimously rejected the neighbors’ $1.8-million bid for the property but said it will reconsider next month if enough property owners near the canyon are willing to tax themselves to pay for it.

“Considering everything, I think it was the best outcome we could have hoped for,” said Alan Tippie, a spokesman for the Marquez Canyon Preservation Assn.

But he acknowledged that the group may have an uphill fight to persuade enough residents near the canyon to support a special tax assessment district, assuming that Los Angeles officials would be willing to initiate one.

If the effort succeeds, the property will become a public park administered by the Los Angeles Department of Parks and Recreation.

“We may be hard-pressed to make it happen,” Tippie said. “But at least we now have the opportunity to go to the community and make our case.”

On Monday, the group agreed to spend $5,000 to have an engineer draw up plans for the proposed tax district--which may include between 7,000 to 10,000 households--and to poll residents as to whether they are willing to pay for the canyon.

Conservancy officials plan a Dec. 18 meeting in Pacific Palisades to answer questions about the property. A location has not been selected.

Meanwhile, conservancy officials said they plan to reopen the bidding on the property this week and allow prospective buyers 14 days to make alternative offers.

Joseph T. Edmiston, the conservancy’s executive director, said that if the open space proposal fails to gain community support by Jan. 13, when the board is scheduled to meet in Malibu, conservancy officials will sell the property to the highest bidder.

At least two schools and a real estate developer who wants to build homes on the property have expressed interest. In the round of bids canceled by the board this week, Village School of Pacific Palisades offered more than $2 million.

The conservancy got the land in March from the Los Angeles Department of Water and Power as part of a complicated arrangement to help finance the purchase of Fryman Canyon in the hills above Studio City.

To help raise funds for the Fryman purchase, the conservancy took $2 million from a trust fund earmarked for park improvements in Temescal Gateway Park, which is also in Pacific Palisades. As part of the deal, DWP transferred the Marquez property to the conservancy with the understanding that proceeds from the sale would reimburse the trust fund.

But some Marquez residents cried foul, insisting that the canyon in their neighborhood of million-dollar homes is being sacrificed to preserve another canyon 11 miles away.

Not wanting to be cast as the villain in a struggle between the neighbors and would-be developers, the conservancy bent over backward to accommodate a last-minute bid by the group’s president, who offered the $1.8 million for the property in August.

The president, Lucy Bailey, acknowledged that she didn’t have the money, but her offer triggered a grass-roots effort by her neighbors to raise the funds.

On Monday, the group’s leaders said they had raised $25,000, far short of the $350,000 deposit the conservancy said would be necessary to keep the group’s hopes alive.

However, at least half the board members were unwilling to close the door on the neighbors’ efforts and, at Edmiston’s suggestion, approved the plan to give the group a final chance while not delaying other bids.

Conservancy officials said they will delay selling the property to another bidder if at least 60% of property owners in an assessment district yet to be defined agreed to pay for the acquisition.

If so, the conservancy board at its Jan. 13 meeting will allow Los Angeles officials 30 days to begin the process of setting up the tax district.

A professional polling organization, paid with funds provided by the neighborhood group, will survey Marquez area residents before Jan. 13. Assuming that 60% respond favorably and Los Angeles officials agree to initiate the so-called benefit assessment district, the effort would fail if a majority of property owners were later to formally protest the assessment.