Hills Are Alive With the Sound of Discord : Environment: Plans to build 40 luxury homes near the Hollywood Reservoir stir up partisans on both sides. Some fear loss of wildlife. Others say it could have been worse.

On the steep hillsides, fiery partisans nurse their grudges and keep their eyes peeled for the enemy. They pore over maps and hoard scraps of intelligence. Mixed in among the majority population, small communities cling to dissident views. Refugees seek new homes. Entreaties go out to the powers that be, including Madonna. Not the Madonna, just Madonna.

Yugoslavia? No. This struggle is unfolding in the hills surrounding the Hollywood Reservoir.

Madonna Ciccone, the author, just bought a castle overlooking the scene of battle, where a developer, defying the recession, wants to scrape 1.728 million cubic yards from hillsides covered with sage, mugwort, buckwheat, goldenbush, live oaks, laurel sumac, western sycamores and wild grasses. The hillsides are home to frogs, toads, lizards, rattlesnakes, owls, vultures, scrub jays, hummingbirds, deer, coyotes, raccoons, opossums and bobcats.

Privately owned, the 116-acre site has been a development target for decades. But no developer has gotten as far as Jefferson Development Corp., financed by Japanese capital, which spelled out its plans for 40 luxury homes, selling for about $3 million each, in an environmental impact plan released late last month.

“We think our timing is pretty good,” said Tom Sullivan, president of the firm. “By the time we get houses up there, it’ll be a couple of years and the economy up and running.”

Purchased for $4.5 million four years ago, the site is owned by five investors who have since spent $2.5 million in development costs, he said.

“They invested in this project during the go-go days of the late ‘80s and they don’t want to quit,” Sullivan said.

With major studios nearby and downtown minutes away on the Hollywood Freeway, Sullivan said he is confident of selling all 40 lots in the gated community.

“I hope so--I bet my wad on it,” he said. “If we had 500 lots, it’d be something else, but 40 lots is not a big market play.”

The plans call for homes ranging in size from 4,000 to 7,000 square feet, featuring five or six bedrooms, swimming pools and tennis courts, he said.

“In terms of flora and fauna, that’s all going to be saved,” he said. “We’re taking off the first foot of soil and putting it back to plant it in native seed.”

He vowed to be sensitive to neighborhood concerns as well as the environment--but the environmental impact report made it clear that drastic changes are afoot.

“Ridges would be altered and canyons filled,” concluded the draft, prepared by a private firm but supervised by city planners. “Implementation of the project would result in a significant topographic impact that could not be substantially mitigated.”

Plant and animal life would be disrupted or eliminated and a wildlife corridor linking Griffith Park with habitats to the west and north would be cut off, with drastic consequences for the gene pool of wide-ranging mammals.

It was this prospect, and a perceived threat of limited access to the jogging path around nearby Hollywood Reservoir, that made local activist Frank De Fazio call on Madonna.

“We hope that she recognizes that Jefferson is serious about developing this area,” he said, “and we hope that she joins neighbors, joggers and walkers in the battle to preserve this pristine recreational region.”

While De Fazio, a 15-year resident, couched his appeal in environmental terms, his friends and neighbors indicated that more is at stake in Lake Hollywood Estates, just east of the proposed development, where passions have risen to such a point that the local homeowners association has virtually fallen apart.

If the project goes ahead as planned, De Fazio’s quiet cul-de-sac, Lake Hollywood Drive, would become a thoroughfare linking the new development with the Hollywood Freeway to the west and Beachwood Canyon to the southeast.

“This is something whose time should never have come,” said Wayne King, another 15-year resident, who is active with De Fazio in a new, loosely organized group called the Lake Hollywood Preservation Society.

“It’s a violation of the environment, the wildlife and the serenity of the neighborhood,” King said.

But others in Lake Hollywood Estates feel differently. In fact, said Terry Canfield, a real estate agent who is about to move to the Sacramento area, local sentiment has been splintered.

“We’ve had really bizarre proposals before, like a project with 500 condos, so from that vantage point this was one of the best,” said Canfield, an eight-year resident.

Although she came down on Jefferson’s side in the bitter arguments that preceded the collapse of the Lake Hollywood Homeowners Assn., she now has second thoughts because of the dismal state of the real estate market.

“People felt we needed to work with (Sullivan) because his proposal was more palatable,” she said. “But we’re now . . . in a real downward spiral, and empty lots would be extremely difficult for the neighborhood to absorb.”

Across the valley in the Hollywood Knolls development, Zilla Clinton shares the concerns of project foes. A resident of Lake Hollywood Drive’s western extension, she too, would find her house located on a busy street after eight years of living on a quiet byway.

“The development would mean unbearable traffic and the ruination of a neighborhood, as far as I’m concerned,” she said.

But Dan Riffe, former president and now chairman of the board of directors of the Hollywood Knolls Community Club, said that while questions remain to be answered, “My personal opinion is that this development is essentially not going to be harmful to us.”

After many meetings, he said, “We kind of helped the developer to design something that’s more compatible to the surroundings than when he originally came in.”

Questions about wildlife, access to the lake and the routing of the new thoroughfare remain to be addressed.

There is also the divisive question of gating the thoroughfare. Houses in the new development will be on cul de sacs that Sullivan said will be gated no matter what. Sullivan also has offered to contribute $250,000 toward a gating system for the through road as well, but there appears to be no consensus on whether that would be good.

If the thoroughfare is gated, it would limit access from Beachwood Canyon and block a shortcut for travelers between Hollywood and Studio City.

“Ninety percent of the residents up here would be in favor of gating if we knew what all the answers were and it could be done and done well,” said Lake Hollywood Estates resident Richard Klein.

But if Lake Hollywood Estates is gated, he asked, will Beachwood Canyon be far behind? “We would each have our own little fortresses and no one could get through anywhere.”

The entire issue is also complicated by the Department of Water and Power’s need to build a filtration plant for the reservoir by 1996 to meet federal and state clean water standards.

Although the DWP has yet to decide where the unsightly tanks, pumping stations and pipes will go, somebody’s view is sure to be ruined.

“If can reach a consensus we’ll proceed with the regular (environmental review) process, and if not, we’ll pick (a site) and proceed without consensus,” said Julie Spacht, waterworks engineer for the DWP, which has identified 11 possible sites.

With the issuance of the draft environmental report, there will now be a period of six to eight months for public comment, followed by hearings, recommendations by city planners and debate at the Los Angeles City Planning Commission and, most likely, the City Council.

An important voice in the decisions will be that of City Councilman John Ferraro, who gained the hillside neighborhood from Councilman Mike Woo in redistricting earlier this year.

“I’ll be happy to meet with anyone and everybody,” said Renee Weitzer, a Ferraro deputy. “They can just call me and I’ll be the psychiatrist and listen to everything and figure out something that’ll make everybody happy.”