Council, Developers Tentatively OK Truce Over Zoning : Growth: Landowners agree to drop suit over controversial interim law as officials promise to weigh plan for civic center and reconsider restrictions.

Malibu has tentatively agreed to settle a nagging dispute with a group of real estate developers over the city’s controversial interim zoning law, city officials and the developers disclosed this week.

As part of the compromise--the details of which have yet to be worked out--the Malibu Village Civic Assn. would drop its lawsuit challenging the law in exchange for assurances that the city will consider an ambitious plan to develop Malibu’s main commercial area.

In addition, the settlement calls for the City Council to reconsider development restrictions that the new law imposed on several parcels in western Malibu owned by the Malibu Bay Co., the community’s largest commercial landholder.

Malibu Bay Co., along with Pepperdine University, is the driving force behind the association, which consists of 16 civic center-area property owners.

“We’re quite pleased,” said Allan J. Abshez, an attorney for the developers. “Up until now, the owners felt they were being ignored, and now it appears we will be able to move forward.”

Malibu officials were similarly optimistic.

“An open community discussion will be much more productive than the litigation,” Mayor Carolyn Van Horn said in a written statement.

The two sides agreed to iron out the details of the agreement over the next few weeks with a view toward the City Council formally approving the pact in October.

The developers sued the city in April to overturn the interim law. A Los Angeles Superior Court judge has scheduled a trial to start Nov. 12.

Sources said the impetus for announcing the agreement in advance of settling the details was to curtail legal expenses, which would have soon escalated as preparations for the trial began in earnest.

Malibu spent an estimated $650,000 of its $8-million budget for legal expenses for the fiscal year that ended in June. Officials expressed concern that if the costly lawsuit went to trial, the city could end up with a $1-million legal bill for the current fiscal year.

“The prospect of spending so much money was really unacceptable,” said Councilman Jeff Kramer, who is an attorney.

Besides ending the litigation, Kramer said, the settlement also “will give the community the chance to focus on the real issues.”

The developers have waged a sophisticated public relations campaign against Malibu’s elected officials for nearly a year, accusing the council of wasting tax money for defense against developers’ suits while adding to the expense by pressing their own claims.

“I believe we are entering a calmer period,” Kramer said. “I certainly hope so.”

The interim zoning law, enacted in February, placed strict limits on a wide range of development and outlawed all new multifamily housing in the city.

By state law, new cities normally have up to 2 1/2 years to adopt a general plan to serve as a blueprint for development. Malibu’s time limit expires this month. Although city officials have asked for a year’s extension, they have said they hope to complete work on the document by early 1994.

Earlier this year, a 23-member task force appointed to formulate the general plan recommended that the interim law include a ban on residential development in the civic center, but the council rejected the idea.

Instead, the elected officials chose to treat the civic center as a distinct area--known as a specific plan area in the parlance of municipal planning.

However, the action did little to satisfy civic center landowners who fear that Malibu officials still preferred that there be no residential development there.

The developers, led by Malibu Bay Co. partners Lyn Konheim and John Perenchio, view the civic center area as the perfect place for a town center for up to 1,500 residents.

They envision a European-style mix of bungalows, estate homes, apartments and condominiums alongside retail shops and offices and built around a sprawling village green.

The village concept designed by San Francisco planner Peter Calthorpe suggests a community drawn together by trails, promenades and a creek linking restored wetlands that would double as an outlet for an innovative waste-water treatment system.

Thus far, however, Malibu’s elected officials have appeared to be cool to the idea. Opponents have attacked the plan as out of keeping with the community’s semirural character and say it will create traffic congestion, noise and air pollution.

Under the compromise announced this week, the City Council would appoint an advisory panel to consider a wide variety of potential uses for the civic center area, including residential development.

In exchange for being able to participate in the process, the developers would pay for most if not all of the cost of hiring professional consultants to propose various options. However, the city would retain control over the process, including having the final say on how the advisory panel is constituted.

Once the City Council signs off on a settlement, the developers will dismiss the lawsuit.

Malibu Bay Co. owns 21 acres on Point Dume and another 28 acres in Trancas Canyon that were substantially downzoned by the interim zoning ordinance. The agreement calls for the City Council to hold public hearings to consider whether to modify the restrictions on the property.