Treasure Island Plan Reviewer Selected

Plans to build homes and a hotel on the oceanfront bluff known as Treasure Island have taken a first step forward, leading to the opening of a dramatic stretch of shoreline to the public for the first time.

The City Council has selected a firm to do an environmental review of the project, which would replace the existing mobile homes with a 300-room luxury hotel and 268 homes, including condominiums, single-family houses and smaller beach cottages.

City Manager Kenneth C. Frank said the project is the city’s top priority for a variety of reasons, including the fact that it will force the opening of the breathtaking expanse of sandy beach and undisturbed tide pools now hidden behind the gated Treasure Island Mobilehome Park.

“There is . . . nothing else quite like it in Orange County for sure, and I don’t know of anything like it in Southern California,” Frank said Wednesday. “For the city of Laguna Beach, it will be our No. 1 priority.”

Costa Mesa businessman Richard Hall, who along with Merrill Lynch Hubbard heads the partnership that owns the parcel, said the landowners will pay $193,000 to have the environmental report prepared. The City Council on Tuesday unanimously selected LSA, an environmental consulting firm in Irvine, to conduct the study.

While the particulars could change, the developers are imagining a heavily landscaped condominium complex, pricey oceanfront homes, a “village” of smaller, less expensive houses and a hotel, Hall said. They have not yet decided how many of each type will be built, he said.

A four-acre parcel is being set aside for the hotel. Frank said the city insisted the project include a hotel because it will draw visitors to Laguna Beach and generate sales tax revenue.

“We do hope to attract a high-end beach club-type of hotel,” Hall said. “Something different than the Ritz [Carlton] or the Four Seasons, but still something high-end.”

First, however, the park owners must resolve lingering legal problems involving 75 or 80 of the tenants who live on the property.

A bitter dispute has raged for years between the mobile home owners and their landlord over the park’s closure, the relocation of its residents and how much they should be paid for their homes.

In June, the landowners struck a deal with most of the permanent residents, guaranteeing them 27.5% of the value of their coaches and forcing them to move within a year.

But Hall said the park owners are still tangled in lawsuits with some residents over relocation benefits. Although Hall said he expects those legal issues to be resolved by June, some tenants aren’t so sure.

Susan Baker, whose parents bought a coach at Treasure Island 18 years ago, said about 80 tenants “are squarely refusing to move out” until the legal matters are settled.

Baker said a previous appraisal placed the value of her family’s coach at $150,000. The equivalent of 27.5% of that sum would be $41,250. But Baker said the park owners want to pay only $20,000. The first estimates assumed the coaches would remain at their current site. But the value of the coaches has shriveled in recent years as word of the park’s redevelopment spread.

Some residents even are clinging to a longtime dream they’ve had of finding a way to buy the park themselves.

“We’ve got many old people who don’t have the slightest idea what’s happening. We have a 95-year-old woman here in our midst,” said K. P. Rice, president of the Treasure Island Residents Owners Assn. “It’s hard to accept the concept of being displaced from a home they’ve been living in for decades.”

Hall said a firm development plan probably will be submitted to the city this summer. Public hearings on the environmental review are expected to begin about the same time.

The City Council and the California Coastal Commission both must approve the project, a process that probably will take another four to six months, Frank said. Hall said it may be up to two years before the project is finished.

“The city’s going to be looking at this thing very, very, very hard; same with the Coastal Commission,” he said. “It’s going to be a unique product, which is virtually a requirement in Laguna Beach.”