Panel OKs Record Penalties Against Developer : Environment: Coastal Commission requires Sheldon Gordon to buy 80 acres in Escondido Canyon and donate it as parkland in exchange for building four mansions in Sweetwater Mesa.

MALIBU — The California Coastal Commission has approved a settlement that calls for developer Sheldon Gordon to buy 80 acres of Malibu’s pristine Escondido Canyon and donate it as parkland in exchange for being allowed to build four luxury mansions in Malibu’s exclusive Sweetwater Mesa area.

The complicated arrangement, which some observers speculate could end up costing the wealthy developer millions of dollars, represents the stiffest penalties ever for a violator of the state’s coastal protection law.

The state panel, meeting in Marina del Rey, unanimously approved the settlement last week, ending nearly two years of often bitter negotiations resulting from its having revoked Gordon’s development permit in 1990.

But because the arrangement depends on the approval of Malibu officials, the matter may yet be a ways from resolution.

Malibu’s City Council, whose members have pitched themselves as the true believers in the fight against overdevelopment of the community, must now decide whether placing Escondido Canyon in the public domain is worth approving construction of the mansions, each nearly 10,000 square feet in size, and including guest houses, swimming pools and tennis courts. Two of the estates would have 4,000-square-foot horse barns.

For these officials, the settlement could scarcely have come at a more inconvenient time.

Three of the council members swept to victory in last month’s election on a platform that emphasized the protection of Malibu as a semirural enclave and opposing the kind of ostentatious development that, in many eyes, the Gordon proposal represents.

The City Council has just begun to consider new building restrictions for residential properties. Among the draft proposals to be considered at a workshop scheduled for tomorrow night is one by Mayor Walt Keller that would limit the size of new homes to 4,500 square feet.

Some observers have suggested that, barring dramatic new concessions by Gordon, the City Council is in a no-win situation.

If it goes along with the commission arrangement to allow Gordon to develop his 184-acre Sweetwater Mesa property, critics will accuse the council members of acquiescing to the same pro-development policies that they accused their election opponents of promoting.

And if the council were to refuse to go along, observers say, it will almost certainly invite criticism from environmentalists who see the settlement as a once-in-a-lifetime chance to preserve Escondido Canyon as parkland.

Escondido Canyon, in western Malibu, is one of the few remaining pristine coastal canyons in Southern California. It is known to be rich with archeological remnants of the Chumash Indian culture. Its main attraction, Escondido Falls, is widely regarded as the most spectacular waterfall in the Santa Monica Mountains.

The canyon has long been coveted by local environmentalists and parks officials for acquisition as parkland.

The Santa Monica Mountains Conservancy bought 24.6 acres of the canyon in 1990 for $1 million, but it remains almost entirely in the hands of a few private landowners, most of whom have expressed a willingness to sell for the right price.

In addition to agreeing to deed 80 acres of the canyon to the conservancy, Gordon last week agreed to sell another 34 acres he has optioned in the canyon--where he had hoped to build another estate--to a nonprofit group actor Edward Albert is attempting to organize.

Gordon has an option to buy 114 acres of the canyon owned by Fairfax Savings & Loan of Fairfax, Va.

Albert, who spent much of the day Wednesday trying to persuade the developer to relinquish the 34 acres, said Gordon had agreed to sell the acreage for $800,000, which he said was the price Gordon agreed to pay for it. Albert said the group’s aim would be to turn over the property to the conservancy as parkland.

“He has agreed to give us six months to come up with the money, require no down payment and charge no interest,” Albert said. “Those of us who want to see all of the canyon preserved have got to be extremely pleased with that.”

Besides allowing Gordon to proceed with construction on his Sweetwater Mesa property, the deal calls for the state to drop its demand that Gordon pay $1 million in civil penalties for illegal grading in 1989. He is required to restore vegetation and do other remedial work to the damaged areas, leave much of the property in open space and provide for public trail easements across other parts.

The commission revoked his development permit in 1990, accusing Gordon of grading 560,000 cubic yards of earth on the property--more than 14 times the amount the permit allowed.

But a judge later declared the revocation invalid, saying the commission had violated its own procedures, and ordered that the state panel reconsider the matter.

Commissioner Madelyn Glickfeld, who lives in Malibu, called last week’s settlement “a very good violation agreement,” and said that Gordon’s last-minute concession to sell the 34 additional acres at his cost was the turning point in her decision to support the arrangement.

“He seemed to have thought up to the last few minutes that he could turn that mountaintop (Sweetwater Mesa) into a facsimile of the rolling hills of Virginia, and we wouldn’t let him,” she said.

Gordon remained outside the meeting hall in the marina park where the commission met for the 2 1/2-hour session, often pacing back and forth and talking on a portable telephone.

Upon being informed that the vote was unanimous, Gordon, visibly angry, told an associate, “After I dropped my pants, why should I care if it was unanimous.”

“I’m displeased totally because I think that I was levered into a position that I feel very, very upset about,” he said.

Gordon, who owns the Ma Maison Sofitel Hotel in West Los Angeles, had filed a lawsuit against the commission--which he has since dropped--in an effort to pursue his plans, contending that the panel violated his property rights.

Not counting legal fees, which observers say could easily climb into the hundreds of thousands of dollars, Gordon contends that he has already spent more than $1 million to restore some of the Sweetwater Mesa damage in the hope that the commission would ultimately allow the work to go forward. His attorneys have said he has $10 million invested in the Sweetwater Mesa property, including the purchase price.

But if the response of several Malibu City Council members to the commission decision was an indication, he may not be able to expect much sympathy from Malibu officials.

“I’m going to come to the table with a sense of outrage over what Sheldon Gordon has done,” new Councilman Jeff Kramer said. “I’ll need to be satisfied that whatever action we take is the best thing possible for the community.”

Councilwoman Carolyn Van Horn said the council “has a responsibility here outside whether or not he buys Escondido Canyon,” adding that Gordon’s Sweetwater Mesa projects “do not sound compatible” with building criteria the council is considering.

Keller echoed a similar theme, saying of the settlement, “I certainly don’t like the sound of it.”

Joan House, another new member of the council, was out of town and could not be reached for comment. John Harlow was chosen last week to serve the remaining two years of former Mayor Larry Wan, who resigned after the election. Harlow takes office on Tuesday.

The Murphy Family Trust, which owns 35 acres in Escondido Canyon next to the Fairfax property, including most of the land immediately surrounding the falls, has said it would consider selling its property for $1.3 million.

Gordon has declined to say how much he has agreed to pay for the 114-acre Fairfax property. However, a task force appointed by the Malibu City Council reported in January that Fairfax Savings & Loan was trying to sell it for $3 million. Sources say the conservancy last year was negotiating to buy 80 acres of the property for about $2 million but could not raise the funds.

Gordon, who has lived in Malibu for 17 years, bought the Sweetwater Mesa property in 1985 intending to build a new home there and devote most of the acreage to pasture for some of his prize-winning jumping horses.

In 1986, the commission approved the project, enabling him to subdivide the property into four estates, each with at least 40 acres, but imposed several conditions, including the grading limit.

After investigators for the commission discovered the grading violations in early 1989, the panel immediately issued a stop-work order and later ordered Gordon to take steps to correct the damage.