LAGUNA BEACH : Treasure Island Plan OKd; Lawsuit Likely

The City Council has approved a plan that allows the owners of Treasure Island Mobilehome Park to close the park, and the plan defines how tenants must be reimbursed when they move.

The 3-2 vote closes one chapter in a bitter and lengthy battle between park owners and tenants at the city’s largest mobile home park, a sprawling, oceanfront complex in South Laguna.

Park owners, who maintain that the relocation plan favors their tenants and places an unreasonable burden on them, said a new chapter will be played out in court.

“We’re just going to go to court, that’s all I can tell you,” said Costa Mesa businessman Richard Hall, who along with Merrill Lynch Hubbard heads the partnership that bought the park five years ago for $43 million. “This is just another unreasonable, illegal land use decision by the city of Laguna Beach.”

The controversy has centered in large part on how much the landowners can reasonably be expected to pay the tenants when they are forced to move. Park owners have said they will probably close the park within two years.

The landowners have maintained that state law requires only that they pay “reasonable costs of relocation,” while residents say they should be reimbursed according to the “fair market value” of the homes at their current prime location.

According to the plan approved Tuesday, the park owners could choose from the following options:

* Allow mobile home owners to stay in their homes for 10 years if they forgo relocation benefits.

* Pay to have coaches moved to other parks at mutually agreeable locations, or buy residents mobile homes at mutually agreeable parks.

* Pay a cash benefit based roughly upon the price of coaches sold in comparable parks, or upon the appraised value of the Treasure Island coaches at their current location. A city appraiser has placed the overall value of the more than 180 coaches in the park at $25 million.

Tenants and park owners also have the option of working out any other agreeable solution.

K.P. Rice, president of Treasure Island Resident Owners Assn., said Thursday that the council took “a substantial step” toward easing what is bound to be “a very traumatic closing” of the 29-acre park, which has been a fixture in Laguna Beach for 35 years.

“We’re closing the community we love,” he said. “We don’t regard this as a victory in any sense whatsoever. We think it’s purely the justice that’s appropriate in the situation.”

But Councilman Wayne L. Peterson, who along with Kathleen Blackburn cast an opposing vote, said the action did “absolutely nothing” to resolve the dilemma because the park owners will not accept it.

“This ordinance goes so far beyond what the state law requires to be paid that the property owner has no incentive to participate in it,” Peterson said.