State Parks Agency Acquires Title to Paramount Ranch : Development: The deal may be first use of foreclosure to create parkland, officials say.

The former Renaissance Pleasure Faire site in Agoura, long threatened by development, became parkland Thursday in a deal officials said may mark the first use of foreclosure to create a public preserve.

Officials with the Santa Monica Mountains Conservancy, a state parks agency, said they acquired formal title Thursday to the hilly, 314-acre swath of oaks and grassland, which is expected to be combined with adjacent holdings of the National Park Service.

The acquisition followed foreclosure proceedings between the conservancy and Paramount Ranch Estates, a development firm that three years ago rejected the conservancy’s offer of $19.3 million for the land just north of Mulholland Highway and west of Cornell Road.

However, after the 1990 death in a plane crash of the firm’s president, Ezra Raiten, it was disclosed that the company was millions of dollars in arrears in loan payments to Union Federal Savings Bank, an Orange County savings and loan.

The bank and the conservancy, which buys land in the Santa Monicas and other local mountains, worked out a deal under which the conservancy bought the delinquent loans and foreclosed on the development firm.

The deal with the bank requires the conservancy to pay $17.6 million--$1.7 million less than the agency once offered for the land.

“It’s the first time, to our knowledge, in the country that parkland has been acquired in this way, through the foreclosure process,” said Joseph T. Edmiston, executive director of the conservancy.

However, the agency still faces a daunting task: paying off the loans and avoiding foreclosure itself.

The agency has only made a $500,000 down payment--and has until next fall to raise the balance.

Officials said they hope to get much, if not all, of the balance from congressional funding of the Park Service, which wants to acquire and manage the property as part of the Santa Monica Mountains National Recreation Area. State and county park bond issues, which are expected to appear on next November’s ballot, are another potential funding source.

The new park holdings, and an adjacent 436 acres already owned by the Park Service, were carved from the historic Paramount movie ranch, the setting for many Western films.

Ann Rushton, staff attorney for the conservancy, said a recent court ruling made Thursday’s acquisition especially significant.

In that ruling, a state Court of Appeal upheld Los Angeles County’s approval of 150 luxury homes on the former fair site. Environmental and homeowner groups had filed a lawsuit contending the approval was invalid.

The decision means that the property is still covered by an approved tract map, Rushton said. And that means that without the conservancy deal, a new developer, working with the bank, could have taken over the project once the economy improved, she said.

Even now, according to Rushton, the development threat will be revived if the loans are not paid off.