Hillside Project Faces Uphill Battle Near Calabasas

The steep green hillsides are dotted with hundreds of oak trees and are ablaze with spring fields of yellow mustard--a pastoral delight that has greeted Ventura Freeway motorists for decades.

But the future of one 207-acre parcel, adjacent to Calabasas and now populated only by occasional grazing cattle, is uncertain.

The property on the north side of the freeway between Las Virgenes and Lost Hills roads was slated for 136 condominiums and a 281,000-square-foot shopping center that would include a 3,600-seat movie theater complex.

In an unusual move, the Los Angeles County Board of Supervisors unanimously rejected the project last week. Supervisors for decades had allowed intensive development in the area, a trend that largely motivated the incorporation of Agoura Hills in an effort to slow that growth.

The Times disclosed last year that the county bent its own rules to allow heavy development in the mountains.

Los Angeles County Supervisor Zev Yaroslavsky, citing The Times stories, called the action an important milestone.

“The rejection by the board was very significant because it’s the first time since development out in that part of the county began 20 to 25 years ago that a zone change and plan amendment were rejected,” said Yaroslavsky, who represents the area. “I wanted to put a dagger through this application.”

The landowner plans to reapply for permission to construct just the retail center. But even without the condos, a large shopping center will likely face a barrage of opponents from neighboring communities such as Agoura Hills and Calabasas.

“We don’t owe [Robert] Zuckerman a commercial property,” said Yaroslavsky, referring to the president of the landowner, Continental Communities Group of Woodland Hills. “He bought it when it was agriculturally zoned, as it still is. And he rolled the dice.”

The county’s planning staff recommended the parcel of unincorporated land would be appropriate for a smaller retail zone, perhaps 20,000 to 40,000 square feet, that would serve the neighborhood and not be a regional draw, Yaroslavsky said.

“A regional entertainment center with movie theaters? I won’t support it,” he said.

Hundreds of angry residents have packed hearings on the project, worried that it would lead to more traffic and cause significant environmental and wildlife damage. Supporters, however, want the access to convenient shopping and entertainment.

The Board of Supervisors’ vote dealt a serious blow to Continental Communities Group, which now could be hard-pressed to recoup its investment.

It now faces foreclosure on the parcel because its project financing debt was due in January, said William Mark Levinson, a lawyer for a trustee representing bondholders who have helped finance planning for the project.

Jerry Neuman, an attorney for Continental Communities, said he wasn’t aware of the foreclosure action, but it wasn’t unexpected.

“We will move as quickly as possible with the new project and work with the lenders in that they have been very cooperative so far,” Neuman said.

Zuckerman could not be reached for comment.

In 1990, when Zuckerman purchased the hilly parcel from Bob Hope for $10 million, the developer planned to construct La Strada Calabasas Center--a development of homes, offices and a shopping center.

Six years later, Continental secured funding for its proposed project through an unorthodox bond financing plan offered by Pacific Genesis Group, a San Francisco underwriting firm.

By creating what was then known as “roving JPAs,” or joint powers authorities, Pacific Genesis sought out Central Valley towns--and some Native American tribes--to in effect “rent” their tax-free borrowing privileges.

Pacific Genesis wooed the tiny Central Valley farming town of Mendota for a new joint powers authority that would issue bonds on a project far from its jurisdiction--in this case, La Strada Calabasas Center.

In return, Mendota received $80,000 for lending its name to two bond deals--for the Calabasas project and a housing development near Fresno.

Pacific Genesis was then able to underwrite $6.1 million in tax-exempt bonds for a newly formed authority--the Malibu Canyon Public Financing Authority--to pay for the La Strada project.

In 1998, those bonds were refinanced in a $10.5-million bond issue under another joint powers authority based in the Central Valley, this time, the Sierra Nevada Public Financing Authority, which includes the city of San Joaquin.

But the clock was ticking on Continental Communities.

It intended to repay the Sierra Nevada bonds with revenues from the Calabasas project. But when the bond obligation was due in January, Continental Communities had not broken ground or even received county approval for its project.

As a result, Dai--Ichi Kangyo Trust Co. of New York, the trustee for Sierra Nevada Public Financing Authority, demanded that the authority begin foreclosure against Continental Communities, said Levinson, an attorney for Dai-Ichi.

Although Los Angeles County and the Sierra Nevada authority have no obligation to repay those funds, “there are legitimate concerns” because the project is happening here, said Rick Weiss, principal deputy counsel for Los Angeles County.

The roving joint powers authorities--involving property not within the geographic boundaries of the agency--were of enough concern that then-Atty. Gen. Dan Lungren questioned the legality of those agencies in 1998, and the Legislature later moved to sharply restrict them.

While many area residents continue to fight development on the hillsides here, much of this county area is preserved under the Santa Monica Mountains Conservancy and other state parklands.

But stopping Zuckerman’s project would not put an end to development in the area.

Just north of Zuckerman’s land on Las Virgenes Road, for example, bulldozers are grading the hillsides for the Malibu Terrace 110-home project.

And close to the freeway, several newer commercial buildings now line the corridor.

If the Continental Communities proposal was revised to a retail center only, several environmental issues would be addressed, county officials said.

The plan denied by the Board of Supervisors would have required the removal of 129 oak trees and 23 acres of a county-designated Significant Ecological Area.

But if no residential units are built, most, if not all, of the site’s 400 oak trees could be left undisturbed, said Donald Culbertson, acting administrator for the current planning division of the county Department of Regional Planning.

And because the property has steep hillsides, eliminating the condos will also reduce the amount of grading needed, Culbertson said. That would leave much of the picturesque hillside vistas intact.

“Everyone who drives north on the 101 Freeway, has seen this sight,” said Rorie Skei of the Santa Monica Mountains Conservancy. “As you come over the Calabasas grade, down into Las Virgenes Road, it’s the very prominent oak-studded hillside on the right . . . . It’s been on our wish list for many years.”

But a new retail zone will need a new road, Culbertson said, one that would parallel the Ventura Freeway, between Las Virgenes and Lost Hills roads.

“We’re looking at potentially some large volumes of traffic,” said Dave Brown, a Calabasas planning commissioner who said Zuckerman’s proposal is much larger than The Commons retail center in Calabasas. Brown who has lived in the area for eight years, said a scaled-down proposal is more appropriate for the property. “That shopping center is huge.”