U.S. Plan to Purchase Bolsa Chica Is Rejected : Development: Offer was less than agreed-upon price, Koll group says. Housing project, wildlife refuge at stake.

An offer by the federal government to buy the Bolsa Chica wetlands for $17.5 million--and stave off construction of nearly 900 homes--has been turned down by the Koll Real Estate Group, frustrating some environmentalists who have hailed the deal as a way to save the ecologically sensitive area.

The 11th-hour rejection, one day before a state commission was to consider the project, leaves in question the future of an ambitious plan under which the federal government would create a wildlife refuge on about 1,000 acres of the largest unprotected wetlands south of San Francisco.

“This is ridiculous,” said Marcia Hanscom, a spokeswoman for the Sierra Club’s Bolsa Chica Task Force, who accused Koll of “just trying to squeeze as much money as they can out of it.”

A Koll official acknowledged on Tuesday that the company rejected the offer, which was lower than an earlier agreed-upon purchase price. Both sides have refused to disclose that earlier price.

The California Coastal Commission, meeting today in San Diego, was poised to discuss the U.S. Department of Interior’s proposal to buy the wetlands, but both parties asked for a delay. The plan had won the approval of the commission’s regulatory staff.

“We were asked to postpone it until November,” said Jack Liebster, a commission spokesman. “My understanding is that they are continuing to negotiate.”

The future of the Bolsa Chica wetlands, home to many rare species on about 1,000 acres along Pacific Coast Highway near Huntington Beach, has been the subject of heated debate for years.

The Coastal Commission was set to consider two plans for the wetlands this fall. One plan, developed by the Koll group and approved by the Orange County Board of Supervisors late last year, calls for the company to build 3,300 homes in the wetlands and on the mesa surrounding it. In exchange for permission to build the homes, the developer would agree to spend $48 million to restore all of the wetlands, except about 200 acres on which 900 of the homes would be built.

Under the alternative plan developed by the federal government this year, the Interior Department would buy and restore the entire wetlands area and Koll would build 2,500 homes, but only on the mesa. The restoration, which initially would cover 384 acres, would be paid for, in part, by $62 million contributed by the Ports of Los Angeles and Long Beach, which, in return for their contributions, would be allowed to expand port operations at their current sites.

Federal officials involved in the negotiations were not available for comment Tuesday.

In an Oct. 6 letter to Koll group President Richard M. Ortwein, George T. Frampton, assistant secretary for Fish and Wildlife and Parks, said the government’s offer was the result of “strenuous good-faith efforts over the past several weeks to arrive at a best and final offer.”

On Tuesday, a senior Interior Department official also described the government’s offer as “our best and final” but did not rule out future talks if Koll came up with an alternative.

Lucy Dunn, senior vice president of the Koll group, said the company is willing to sell the wetlands, but rejected the government’s offer as significantly lower than the price agreed on five months ago. “This is not the agreement we have,” she said of the latest offer. “We read this as meaning that they are unable to meet the terms of their agreement.”

In a letter dated Monday to Frampton, Ortwein described the $17.5-million offer as only 37% of the property’s appraised value and unacceptable.

“We are most disappointed to learn at this late date that you believe the Department of the Interior is unable to honor the terms agreed to in our May 8 Bargain Purchase and Sale Agreement,” Ortwein wrote.

Environmentalists and local government officials Tuesday scrambled to make sense of Koll’s rejection.

“I don’t think this is the end of the deal,” said Connie Boardman, president of the Bolsa Chica Land Trust, which opposes all development in or around the wetlands. “Who else is going to purchase these wetlands? [Koll] is holding the wetlands hostage. When it suits them, they will sell.”

Others expressed optimism that the plan will survive.

“I think we still want to see them pursue this. I would hope the [Interior] Department would continue to search for the funds that are needed, and that Koll would be willing to bend to make this a reality,” said Adrianne Morrison, executive director of Amigos de Bolsa Chica.

Some government officials expressed surprise.

“For Koll to turn down the federal offer is very, very disappointing,” Huntington Beach Mayor Victor Leipzig said. He called the federal purchase of the wetlands “certainly the best resolution.”

Huntington Beach City Councilman David Sullivan said he suspects that rejecting the offer is simply a negotiating strategy by Koll.

“I think Koll should consider themselves extremely lucky to get $17 million,” said Sullivan, who said he believes the federal plan will survive.

At the Port of Los Angeles, Ralph Appy, assistant director of environmental management, heard about the delay from federal officials.

“It’s pretty serious, from our standpoint,” Appy said. “We have to sit here and regroup ourselves.”

He characterized the federal plan as benefiting everyone. “It was a real good win-win situation,” he said. “A wetland gets restored, and we get some development at the port.”

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Sale Stalled

The Koll Real Estate Group has rejected an offer by the federal government to buy the Bolsa Chica wetlands for $17.5 million. Under the deal, the government would maintain the wetlands as a national wildlife refuge while the Koll group would build 2,500 homes on the surrounding mesa.