Babbitt Aiding Hearst With Land Deal

Former Interior Secretary Bruce Babbitt, in his first prominent role since leaving government, is helping the Hearst Corp. broker a deal worth $200 million or more that will determine the fate of Hearst’s fabled seaside ranch at San Simeon.

Babbitt also has been hired by a developer hoping to jump-start stalled plans to build a mini-city of 3,050 homes on Ahmanson Ranch in rural Ventura County, just northwest of Calabasas.

At issue for Hearst is 83,000 acres of salt-sprayed tablelands that step down from Hearst Castle and span 18 miles of mostly wild, undeveloped coast that forms the southern gateway to Big Sur. At Ahmanson Ranch, the proposed development would spread across one of Southern California’s last expanses of hillsides not yet crowded by urban sprawl.

As a trouble-shooter for wealthy developers, Babbitt would seem to have made a dramatic about-face from his years as an Interior secretary who reintroduced wolves to the Rocky Mountains, protected the countryside around Yellowstone National Park from the ravages of mining and saved giant redwoods from loggers.

Babbitt declined to be interviewed for this story.

But the Hearsts say that he is helping forge an environmentally friendly strategy that would preserve the vast majority of their ranch as open space and represent a substantial reduction of the corporation’s previous plans for hotels, golf courses and a dude ranch.

Indeed, the Hearsts say, if the price is right, they might be willing to give up all development plans for the ranch.

“We are offering to conserve 99 1/2% of the property,” said Stephen T. Hearst, who has taken charge of the project. “If someone wants to advance a proposal that is 100% conservation, we would review it.”

The Hearsts’ strategy, involving consultation with neighbors and negotiations with nonprofit land conservancies, stands in marked contrast to their aggressive, closed-mouth attempt just three years ago to build a multi-phased resort. Those plans, which enraged environmentalists and many local residents, were rejected by the California Coastal Commission.

Even with a modified development plan, however, Babbitt, hired through the law firm Latham & Watkins, and others on the Hearst team have their work cut out for them.

Their challenge is to avoid an epic battle that would pit the property rights of a famous, powerful family against the public’s claim to a treasure of the California coast.

Both nature and the Hearsts are responsible for the scene that has entranced generations of passersby who have visited the fog-shrouded castle, watched the Hearsts’ menagerie of zebras and other exotic animals loping across the plain and walked along the sculpted coastline with its sonorous elephant seals lounging on the beach.

Public Money Key to Deal

For the latest plan to work, Babbitt will have to draw on his own credit with environmentalists, long suspicious of the Hearst agenda. He also must satisfy his client, the Hearst Corp., which has wanted income-generating development to supplement the money-losing cattle ranch.

The hardest part of the deal, however, could be to come up with enough public money to make it work at a time when California’s surplus is being drained by energy needs and federal sources are being shrunk by tax cuts.

Douglas Wheeler, former California resources secretary, believes that it will take a joint state-federal project on the scale of one that saved more than 7,000 acres of old-growth redwoods in Northern California’s Headwaters Forest. Babbitt oversaw the Headwaters deal, but as part of the Clinton administration, which was more inclined than the current White House toward government acquisitions of open space.

“The numbers are huge--$200 [million] to $300 million,” said Wheeler, who is associated with two land conservation groups talking with Hearst. “That is what has been estimated by the conservation organizations. . . . Hearst has said, if the public is adamant against [any] development, it will be even more costly.”

Hearst, with Babbitt’s help, is reviewing proposals by the Nature Conservancy, the American Land Conservancy, the Conservation Fund and other nonprofit groups that specialize in putting together complex deals to preserve land.

Although some environmentalists have been stunned by Babbitt’s association with Hearst, others welcome his involvement in any effort to preserve one of California’s last stretches of open, nearly pristine coastline.

“Babbitt has had a number of different roles in the conservation world,” said Mary Nichols, Gov. Gray Davis’ secretary of resources. “For him to continue on in public-private partnership seems like a logical extension of his career.”

Commenting on Babbitt’s silence, Stephen Hearst said Babbitt is constrained from speaking publicly by an attorney-client relationship.

Hearst said the corporation hired Latham & Watkins, a global firm with a renowned environmental practice, before Babbitt joined the firm in January. Babbitt’s experience as a former Interior secretary, Arizona governor and presidential candidate seemed like a natural fit.

“We believe that having Bruce’s input is a very good thing,” Stephen Hearst said.

Babbitt, a Harvard-educated lawyer, had indicated in interviews that he did not intend to practice law after stepping down from eight years as Interior secretary.

Later, Babbitt, who is 62, said he needed to make money to cover his considerable legal defense bills arising from an independent counsel investigation. Before he left office, Babbitt was cleared of allegations that he lied to a Senate panel about his role in rejecting an Indian casino in Wisconsin five years ago.

Babbitt joined Latham & Watkins at the same time as his former deputy at Interior, David J. Hayes.

“He and I are both very interested in continuing to do conservation-related activities,” Hayes said earlier this year when asked if Babbitt would be working on private-public partnerships to save endangered wildlife--a strategy that Babbitt championed as Interior secretary.

“I think both of us think the experience we had may be useful in helping to craft future [partnerships],” Hayes said. “He, of course, and I are big believers that negotiated solutions are the best.”

Ahmanson Ranch’s developer, Seattle-based Washington Mutual Inc., also hired Latham & Watkins long before Babbitt joined the firm, to help advance a plan to build 3,050 homes.

Ahmanson spokesman Tim McGarry said Babbitt’s job is to serve as an intermediary between the company and critics who have helped stall the project since it was approved by Ventura County in 1992 by filing more than a dozen lawsuits.

Its critics say the project will spawn traffic jams, contribute to air and water pollution, and destroy rare plants and animals.

“He’s a guy with terrific credentials and a national reputation as an environmentalist,” McGarry said of Babbitt. “We brought him in to strengthen our ability to have an open and fruitful dialogue with the environmental community.”

Babbitt “has looked closely and objectively at this project and believes it’s a good one and a responsible one,” McGarry said. He insisted that Babbitt’s role is not to exert political muscle with regulators. “At this point, he has had no contact with any elected officials or any government agency people and that’s not expected to be his role,” McGarry said.

Some critics say Babbitt’s involvement in the development may present a conflict, because as Interior secretary he oversaw the U.S. Fish and Wildlife Service, which has jurisdiction over endangered species designations and conservation plans for wildlife at the project site.

Hayes, in an interview in March, said he and Babbitt understand that there are ethical constraints on retired government officials lobbying their former colleagues.

“For one year, neither of us can talk to anyone from Interior to influence any policy issue,” Hayes said. “The restrictions all make perfect sense. We’re going to be very, very careful that we conform with them to a T.”

Effects on Habitat

Ahmanson opponents fear the project will destroy habitats of the San Fernando Valley spineflower, once thought extinct, and the threatened California red-legged frog.

Mary Wiesbrock, executive director of Save Open Space, said Babbitt’s role raises questions about why the federal government failed late last year to list the spineflower as an endangered species.

“If he’s helping Ahmanson Ranch be destroyed, this is the ultimate insult to the environment,” she said. “It really means America is for sale.”

Furthermore, environmentalists have been stirred up by an April 15 commentary Babbitt wrote for the New York Times, questioning the wisdom of a federal court ordering the Fish and Wildlife Service to design critical habit for red-legged frogs across 4 million acres of California.

Both the Hearst and Ahmanson ranches are part of this designed critical habitat, which was so massive in size it “enraged landowners and developers,” Babbitt wrote.

Kim Delfino, director of the California program for Defenders of Wildlife, asks why Babbitt didn’t disclose that he is now consulting for corporations wrestling with red-legged frog habitat.

Ahmanson Ranch, before construction begins, must still receive a number of environmental permits from local, state and federal officials regarding conservation plans and filling of wetlands.

Wiesbrock believes Babbitt has been misinformed by Ahmanson’s developers. She believes he will alter his views when better informed.

“If he is the person that I believe he is, a man of integrity who supports the environment, then he can’t believe in the project,” she said.

Rep. Brad Sherman (D-Sherman Oaks), who opposes the project, spoke with Babbitt on Monday.

“He’s assured me his focus is not selling this project but assessing and understanding [it],” Sherman said. “He starts with credibility, as much credibility as you can have if you’re working for the other side and on a bad project. I think the best we can do is wait and see: Babbitt is as Babbitt does.”

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Times staff writer Deborah Schoch contributed to this story.