Bank Barred From Land Sales in Coastal Zone : Development: The Coastal Commission’s use of its new authority appears to leave property purchasers holding the bag.

In an unprecedented decision Wednesday, the California Coastal Commission permanently banned a Hollywood mortgage bank from engaging in what commission officials said are illegal land sales in the Santa Monica Mountains near Malibu.

Members of the commission characterized their action as a significant step in protecting the state’s Coastal Zone. But it also left several recent purchasers of property claiming they’d been misled by the bank, Western Land Bank of Hollywood, which sold some of the parcels at auction without disclosing to buyers that the deeds to the land carried restrictions prohibiting development.

“I know it’s not your problem, but at least you should protect the customers,” pleaded Najne Rahman of Anaheim at a Coastal Commission hearing in Huntington Beach on Wednesday.

Rahman said last year, for $60,000, he purchased four parcels of land rendered all but worthless by Wednesday’s 10-0 commission vote.

At issue are 77 parcels near Latigo Canyon Road and McReynolds Road in the Santa Monica Mountains outside the Malibu city limits.

Commission officials assert that, because development of the properties on an individual basis would be environmentally destructive and logistically unworkable, they were consolidated into four large subdivisions under the commission’s 13-year-old “transfer of development credit” program.

The program works by allowing developers to buy up development rights to mountain land the commission wants to preserve. The owner accepts the cash, places restrictions on the property, and the developer, in turn, gets credits from the commission toward approval of other coastal projects.

But according to the commission, the previous owner, Don Bochner of Los Angeles, failed to abide by the agreement when he sold 54 parcels in 1991 to nine investors, identified only by corporate names in Coastal Commission documents. In turn, the commission contends, the corporations disregarded the agreement when they put their parcels up for resale through the bank. To date, the bank has sold 23 parcels and had planned to sell another 31, commission officials said.

Before the hearing, Peter Bogart, an officer with the bank, accused the commission of a power grab, terming the commission’s contention that the current owners are bound by the development restrictions an “outrageous lie.”

“The Coastal Commission, they have one function: to steal everybody’s private property,” he said.

On Wednesday, Bogart insisted that the initial corporate investors did not know the land was restricted when they bought it from Bochner. Bogart also said the bank knew nothing of the restrictions when it auctioned the properties.

Bogart and at least one other investor, Serko Khachadourian, agreed that, if there were a problem, the Coastal Commission should have stepped in when the property changed hands in 1991 by issuing a notice of violation.

“He (Bogart) couldn’t have sold it if there was a (notice of violation),” Khachadourian said.

Commission officials agreed that it was regrettable that they had not learned of the violation sooner and expressed sympathy for the property owners left holding the deeds to essentially valueless properties. But Commissioner Gary Giacomini seemed to express a panel consensus when he urged his colleagues to use their newly vested authority to order the sales stopped permanently.

The crackdown on the land sales began when commission Executive Director Peter Douglas issued two 90-day cease-and-desist orders against further sales in May and July.

Under authority recently granted by Gov. Pete Wilson, permanent orders can be issued by a vote of the full commission.

“Thank God we have this power,” Giacomini said. “This is one time I’d like to thank the Legislature and the governor.”

The matter appears headed to civil court. Last month, Beverly Hills attorney Shelly McMillan filed a suit on behalf of the property buyers in Los Angeles Superior Court that in part accuses the commission of civil rights violations for seizing property without compensation.

“They don’t have the right to tell people you can’t sell your property just because it’s in a Coastal Zone,” she said.

She and Bogart both stressed that the 77 parcels are still taxed by the state as individual properties, appear individually under the state Subdivision Map Act and are treated separately by a variety of other governmental jurisdictions.

“It’s being portrayed (by the commission) as a terrible violation, as black and white, cut and dried--and its not,” McMillan said.