Trailer Park Residents’ Future Is Topic of 5-Hour Discussion : Planning: Laguna Beach council delays decision on aid to Treasure Island residents in way of development.

Addressing one of the city’s most agonizing problems, the City Council heard five hours of testimony on how much--or little--it should do to help Treasure Island Mobilehome Park residents as the landowners prepare to close the park.

While some speakers urged the council to support relocation benefits for tenants, including having the landowner pay full market value for the coaches based on their worth at the oceanfront location, others said the city should not impose restrictions that would lead to a lawsuit.

“I know we’re not the sentimental favorite in this dispute, and that may be an understatement, but we’re right on the law,” Charles Black, an attorney for the property owners, said during the Tuesday night meeting. “Treasure Island is going to close. Its useful life as a mobile home park is about over.”

The 29-acre park, located at the city’s south end, was purchased for $43 million in 1989 by an investment group formed by Merrill Lynch Hubbard and headed by Costa Mesa businessman Richard Hall. The owners want to develop the property.

Grieving at the prospect of losing their tightknit, 57-year-old community, where neighbors share potluck dinners and pancake breakfasts, residents and their supporters pleaded for the council’s support.

“Before this place is destroyed, you have to realize it’s an irreplaceable piece of Laguna Beach’s ambience and history,” one said.

Weary as the emotional debate continued, the council postponed its final decisions while guiding the city staff in crafting a resolution on what park owners must pay to relocate tenants, some of whom have lived there for decades.

A final vote on that resolution and on a conditional use permit needed to close the park is expected on Feb. 1.

In 3-2 votes, the council made tentative decisions to allow the landowner to choose from the following options when closing the park:

* Avoid paying relocation benefits by allowing the coaches to stay on the property for 10 years, with a proviso that would provide “stability” of rents. In the past, the council sought to impose rent control at the city’s three mobile home parks, but voters rejected that plan.

* Pay to relocate the coaches to another mobile home park deemed suitable by the city and the tenants, or buy tenants comparable replacement coaches at a similarly suitable park.

* Pay 60% of the coaches’ fair market value, as determined at the present location, to owners who relocate their homes within two years.

Council members Ann Christoph, Robert F. Gentry and Lida Lenney favored the motions; members Wayne L. Peterson and Kathleen Blackburn voted against all of them.

“It’s a very unrealistic proposal that could lead to litigation and false expectations by the tenants,” Blackburn said.