House of Hope Rises From Laguna Ashes : Rebuild: Community celebrates first home to be completed since the fall firestorm, but the event is bittersweet. Out of 400 destroyed homes, only 7 permits have been issued.

With a picture perfect day for a backdrop, dozens of well-wishers gathered at 838 Manzanita Drive on Wednesday to celebrate the completion of the first house to be rebuilt since last fall’s firestorm.

Flanked by television crews and encouraged by old friends, owner Louise Benton and tenant Patricia Powers labored to describe their feelings.

“They’re mixed,” said Powers, who will move back into the house next weekend. “It’s like I’m the only one. I’ll really be happy when my other neighbors start building and get in as well.”

For some, the wood, brick and stucco house with the fire-retardant roof and a shiny plaque bragging, “First Rebuilt Home 1993 Firestorm” could be a symbol that this beleaguered city can rebuild itself someday. And around here, fresh hope has been in short supply in recent months.

More than 400 homes were destroyed in and around Laguna Beach--286 within the city limits. Seven months later, the city has issued seven rebuilding permits.

“It’s always slow to start and then things pick up,” said Rick Bennett, a building inspector who signed off on Benton’s house Wednesday.

The rebuilding process has been hampered by news that an ancient landslide lies under 13 burned lots in the Mystic Hills neighborhood just above Powers’ house and that similar conditions might exist in the fire-scarred Temple Hills community visible from her back yard.

Still, some displaced residents--including several who munched stuffed grape leaves and sipped Snapple and Perrier during the party Wednesday--are moving forward with building plans. City officials say that, as of Friday, 119 people have submitted rebuilding applications to the Planning Department.

Community Development Director Kyle Butterwick said one trend is becoming evident: Most property owners want new houses that are 10% to 50% larger than their previous houses.

Larger projects prompt closer scrutiny by the city and neighbors than did Benton’s 2,400-square-foot house, which fell within 10% of the original building footprint.

Generally, plans for homes 10% to 50% larger than the original structure require staff review. Projects involving houses more than 50% larger must be approved by the city’s Design Review Board.

But the most stubborn wrinkle to surface in the rebuilding process revolves around the city’s geological concerns.

Fire victims--like other residents in hillside areas--must first get clearance from their own geologist and then approval from the city’s reviewing geologist. So far, Butterwick said, of the 71 geology reports filed by residents, 23 have been rejected.

“We are not in a position to release any building permits until we have received clearance with respect to the site’s geology,” he said.

Such problems, however, were shelved for the day on Manzanita Drive, where Benton, wearing a straw hat and, coincidentally, celebrating her 79th birthday, greeted friends as Powers began to consider how she will arrange her furniture.

“I’m very happy with this house and it’s very much like it was before,” said Benton, who lived with her family in the Manzanita house for 30 years before renting it out five years ago. She now lives up the hill from her rental in a house that survived the fire.

But like others at the noontime celebration, Benton’s emotions teetered. What she really misses, she said, is her weaving studio and 35 years of artwork she kept at the old Manzanita house that burned in the fire.

Eventually, Benton plans to design a new studio and start again.

“When that gets built and I get back to weaving,” she said, “then I’ll be happy.”