Koll to Offer Bolsa Chica for Sale to State

Koll Real Estate Group signaled Friday that it is altering the development strategy for its controversial Bolsa Chica holdings and wants to sell the environmentally sensitive wetlands portion to the state.

Koll said it has taken a $100-million loss for its fourth quarter in anticipation of selling the land. The company and the State Lands Commission signed a complex letter of intent Wednesday, the developer disclosed. A similar agreement with the federal government was disclosed in July, but it has been stalemated by a dispute over liability for cleaning up the former oil field that occupies much of the property.

If a sale progresses, Koll would be closing out a decades-long dispute over development of one of the largest unprotected coastal wetlands south of San Francisco. Bolsa Chica stretches south along Pacific Coast Highway for about two miles from Sunset Beach to Huntington Beach.

Environmentalists have fought to restore the property to its natural state as a marshy area that would be home to thousands of birds and other small animals. Various landowners have insisted on their right to develop the property. In the early 1970s, Signal Cos. proposed building as many as 14,000 homes on the 1,600 acres.

In January, Koll and the state Coastal Commission agreed on a plan that would allow the Newport Beach-based developer to build 3,300 houses there. Koll’s plan called for 900 homes on a small section of the wetlands area of Bolsa Chica and 2,400 additional homes on the bluffs overlooking the wetlands.

Now the company has abandoned the idea of a high-density development on the edge of the wetlands and will concentrate on developing the bluffs.

Whether Koll can really conclude a deal to sell the wetlands to a government agency remains to be seen. The idea of a public purchase surfaced last year when federal and state officials unveiled a plan for the wetlands to be purchased and restored by the Interior Department.

State and federal officials reacted cautiously Friday to Koll’s announcement. “It’s certainly not a done deal,” said Andy McLeod, state deputy secretary for resources.

The company said Friday it will reduce the value of its Bolsa Chica holdings by 34% to $220 million because of its decision to pursue sale of the wetlands. The $114-million devaluation resulted in huge losses for the company.

Koll Real Estate on Friday reported a loss of $116.9 million, or $2.11 a share, for 1995, following an $18-million loss, or 11 cents a share, for 1994. Revenue last year was $34 million, up from $21.4 million.

Development industry analysts say, however, that Koll would gain from selling the wetlands.

“They will be getting rid of an albatross,” said Irvine real estate consultant Ken Agid. “Perhaps this [agreement] will deflect some of the political concerns about development of the rest of the property.”

The wetlands sale price has not been disclosed, but Koll reportedly turned down a $17.5-million offer from the federal government.

The developer’s top money manager said Friday that proceeds from a sale would offset the fourth-quarter loss--which was based on estimated revenue from the parcel if it were kept by Koll and fully developed over five to 10 years.

Times staff writer Deborah Schoch contributed to this report.