Dos Vientos Developer Defaulting on Payments : Thousand Oaks: Council considers revoking 136 houses. Environmental study comes as another setback for the project.

A developer of the huge Dos Vientos project in Newbury Park has defaulted on more than $806,000 in payment due Thousand Oaks, forcing the City Council to consider revoking approval of 136 homes on a portion of the rugged mountain property.

In another setback for the controversial project, a draft environmental impact report released Friday noted that Dos Vientos would significantly harm biological resources near the Santa Monica Mountains. The construction of 2,350 homes would interfere with wildlife movement and disturb habitat vital to several sensitive plant and animal species, the report indicated.

Total build-out would also gum up traffic on major intersections along Borchard, Reino and Lynn roads and Wendy and Michael drives, according to the report drafted by Envicom Corp. of Agoura Hills. To mitigate the traffic, the consultants suggested widening Lynn Road to six lanes near the freeway on-ramp and expanding Wendy Drive to four lanes north of Kimber Road.

The environmental impact report focused primarily on one tract of 220 homes within the sprawling Dos Vientos project, but also looked at overall effects of the development. It will be available at City Hall for public comment until Oct. 15.

But the president of Envicom Corp., Joseph Johns, said protesters would have little recourse to alter the final shape of Dos Vientos since the city guaranteed the developers the right to build 2,350 homes in a binding agreement.

“The density can’t really be reduced any significant amount because of the development agreement,” Johns said. “Without that, we might have suggested more clustering of homes and larger open spaces. The agreement hampers a lot of the opportunity we could have had to mitigate environmental impacts.”

Now, however, the City Council does have some wiggle room because developer Courtly Homes failed to make the latest payment.

The delinquent payment, due 2 1/2 months ago and accumulating $176 a day in interest, is part of an agreement that Councilmen Frank Schillo and Alex Fiore negotiated three years ago with developers Courtly Homes and Operating Engineers.

Under that contract, the developers agreed to pay $12.6 million to the city’s capital facility fund in regular installments, above and beyond the standard development impact fees for sewer, schools, parks and other city services.

The developers also promised combined gifts of $250,000 to the endowment fund for the Civic Arts Plaza auditoriums and $150,000 to the Under One Roof social service center. Courtly Homes and Operating Engineers have already made both of these donations.

But in August, citing the “protracted depression in the California economy,” attorney Charles Cohen wrote the city to plead, on behalf of Courtly Homes, for an indefinite delay in the payment schedule.

The City Council will consider the request in mid-September, Mayor Judy Lazar said.

Meanwhile, City Atty. Mark Sellers has written a letter to the president of Courtly Homes, notifying him that “the City Council may terminate your development agreement” for the 136 homes covered under the delinquent payment.

The council has already approved a specific plan for 2,350 homes on the Dos Vientos property, which now houses a lone equestrian center surrounded by rolling foothills, volcanic outcroppings and massive sandstone cliffs.

Both the specific plan approval and the development agreement guarantee the developer the right to build up to 2,350 homes, although the City Council must still approve individual tract designs, Lazar said.

By defaulting on the promised payment, however, Courtly Homes has broken the development agreement--and this breach of contract could allow city officials to back out of iron-clad guarantees. But because the developer has only missed one payment, which is tied to a specific tract, the city can only withdraw approval for the 136 homes in that tract.

Still, “something’s better than nothing,” said Michelle Koetke, who has fought Dos Vientos through her grass-roots group, Residents to Preserve Newbury Park. “Here’s the perfect opportunity to redesign the project and reduce the density.”

Councilwoman Elois Zeanah, who jump-started her political career as a homeowner battling Dos Vientos, said she would ask her colleagues to do just that.

“The project is so huge, and it will really impact the rural (ambience),” she said. “We should look and see if we can move the homes farther back off Potrero Road. If 136 homes were subtracted, we’d have much more flexibility.”

But other council members seemed sympathetic to the developer’s plea for more time--especially since the city has already collected nearly $4 million in cash. Courtly Homes and Operating Engineers, which own different portions of the property, anted up a combined $3.1 million “down payment” on the development agreement, and later paid the first installment of $800,000.

Instead of punishing the developers for the construction industry’s persistent slump, Councilman Frank Schillo suggested that the city use the default as a bargaining chip.

Thousand Oaks might agree to push back the payment schedule if Courtly Homes consented to speed up construction of long-promised playing fields on the Dos Vientos property, Schillo said.

Courtly Homes President Paul Miller and his attorney Cohen could not be reached for comment on Friday.

In a letter to the city attorney, however, Cohen requested an indefinite postponement of the payment schedule. “As you know, the building industry in this state and country has never encountered such a lengthy economic depression,” he wrote, “and there is no predictable promise of when change may occur.”