Guidelines OKd for Treasure Island Site

Eight years of wrangling might seem like a lot over an abandoned mobile home park--except when the land offers some of the most enchanting coastal scenery in Orange County.

The Laguna Beach City Council took a step Tuesday toward revamping the former Treasure Island Mobile Home Park when it approved broad development guidelines for the site in south Laguna.

“We’re laying out raw parameters within which any project must fit,” Councilman Paul Freeman said. “My vision for this project is still a resort and a park.”

The guidelines would allow the development planned by the property’s owner, Merrill Lynch Hubbard Inc. That proposal calls for a 100-room hotel on the 30-acre tract, along with 37 homes, 25 villas and a bluff-top park with access to the beach. Officials expect the hotel to generate $1.5 million a year in taxes for the city treasury.

The real estate subsidiary of the New York investment giant bought the land in 1989 and has haggled ever since over what would go there.

Project opponents have fought the development, saying it was too dense, too commercial and would decrease access to stunning views that Hollywood has borrowed for more than 60 years. In fact, the Treasure Island park got its name from a 1937 film version of Robert Louis Stevenson’s classic tale, shot at the beach.

Though Mayor Steve Dicterow said most people he has spoken with support the plan, all but a handful of the 22 residents who spoke at Tuesday’s council session argued for fewer homes and more parkland.

“This is a beautiful plate, and all we have to deliver on it is a rotten fish,” resident Mary Lou Ripley said. “I want to see an alternate plan.”

The city, residents and the California Coastal Commission quashed Merrill Lynch’s original plan for a gated, high-priced housing development because it would have closed the site to the public.

City officials persuaded Merrill Lynch to reduce the number of homes from 268 to 37 on 6 acres, and the council reached an informal consensus a month ago on the final plan.

The Coastal Commission must approve the guidelines passed Tuesday. After that, a detailed development plan must win city approval.

The last residents of the mobile home park left in August 1997. The City Council approved buyouts of $130,000 for each of the 60 residents in 1994, but Merrill Lynch sued and won, saying that figure exaggerated the homes’ value. A new council approved minimum payments of $20,000 each.