Speculator Seeks New Riches in Malibu

A Las Vegas land speculator, who was paid a fortune by conservationists after threatening to develop vacant property along the Central California coast, now has targeted the pristine hillsides and mountains above Malibu.

In recent months, investor Brian A. Sweeney has spent more than $15 million to buy nearly 2,000 acres of unspoiled property with commanding views of the Pacific. The purchases have alarmed environmentalists because most of the ruggedly beautiful properties have long been sought by park officials, who hope to complete hiking trails and to preserve wilderness for mountain lions, badgers and other creatures.

Sweeney proposes cutting through this virgin territory, with new roads and several dozen home sites, using a technique that made him huge profits to the north: digging up old property records to justify modern subdivisions.

So far he has applied for three dozen “certificates of compliance,” hoping to resurrect historic property rights and enhance his ability to build more homes--especially on his properties in Corral Canyon and in the hills above Pepperdine University.

Yet following through on construction is not part of Sweeney’s track record. Instead, he has used the tactic to drive up the price of land, which he then has sold at greatly inflated prices to conservation groups and park agencies.

The low-profile, 40-year-old investor and his unnamed partners made more than $40 million using that approach in Big Sur and along the Santa Cruz coastline--with much of the money ultimately coming from taxpayers. The model proved so effective that it has been adopted by Hearst Corp., which recently claimed subdivision rights on the sprawling San Simeon ranch that surrounds Hearst Castle.

Sweeney, meanwhile, has rolled some of his profits from his triumphs on the Central Coast into the hills and mountains above a 10-mile stretch of Malibu coastline. He has zeroed in on properties long coveted by the National Park Service and the Santa Monica Mountains Conservancy.

Sweeney has declined to comment on his acquisitions. His representatives say he’s merely a savvy investor, finding property with untapped value. The profit eventually could come by selling to a park agency or by building luxury homes, they say.

Bob Berry, a longtime Malibu-area real estate broker who is working with Sweeney, said state and federal park officials publish lists of the land they desire. “It’s no secret,” Berry said. “Everyone knows what properties are on their priority lists.”

At the same time, Sweeney has been attentive to the private market for such properties, partly expanded by celebrity home builders such as actor Nicolas Cage and director James Cameron. “Brian just has an eye for beautiful parcels,” said his attorney, Catherine Philipovitch.

Legislature Is Moving to Tighten Loopholes

Conservationists see Sweeney as a serious threat to their goals of preserving land as open space and wildlife habitat. After helping raise money to complete the purchase of a Sweeney property near Big Sur, Rep. Sam Farr (D-Carmel) accused the investor of “environmental terrorism.”

Responding to such concerns, the California Legislature has moved to tighten loopholes so that local planning ordinances cannot be circumvented. A fast-moving bill is up for final votes this week in the Assembly and Senate.

Park superintendents and environmentalists had once been confident that no one would beat them to parcels in the impossibly steep and inaccessible canyons overlooking Malibu. What the terrain didn’t foreclose, modern zoning would not permit.

But Sweeney and other attentive investors have been able to greatly expand the possibility of building on such land. Their strategy is to dig through old property records in search of deeds and other documents that indicate, sometimes in the vaguest ways, that the land is not just one parcel but a collection of many historical lots.

These underlying parcels might have been crude homesteads or merely well sites. Yet, even if nothing was built on them, evidence that multiple lots existed has often been enough to allow modern owners to subdivide again. A certificate of compliance is the document, issued by county planners, that verifies that the existence of the old lots can be used to justify modern subdivisions. The U.S. Supreme Court has ruled that owners can develop their land if they can prove that the right to do so once existed.

Moreover, California appeals courts have ruled that landowners can adjust the boundaries of the old parcels, moving the lots around like pieces of a puzzle.

That means the property lines of a tiny parcel in a steep, remote location can be shifted to a flat area next to a road, with greater potential to be a home site.

Though others have used these techniques, Sweeney has gained acclaim--and disdain--because of the sheer size of the acreage he has amassed, his mastery of the old records and the fact that nearly all his holdings are prized by conservation groups.

Technique Used Earlier in Santa Cruz, Big Sur

Sweeney learned the techniques in two earlier deals farther up the coast.

First, he and his partners had an option to buy a 7,500-acre property above Santa Cruz for a little more than $20 million. But they discovered enough old deeds to subdivide the land into 139 parcels. The partners sold the property to the Save the Redwoods League for about $43 million.

Next, Sweeney purchased 1,226 acres--straddling Bixby Creek in Big Sur--for about $9 million from the estate of TV figure Allen Funt. When lawyer Philipovitch found 11 old homesteading deeds, Sweeney told the San Francisco Chronicle, “It was something like winning the lottery.”

He sold the Funt house and surrounding 10 acres for $7.3 million and got nearly $30 million more for the remaining acreage from the Trust for Public Land.

The precise terms of these deals are shrouded by confidentiality agreements, and Sweeney’s agents declined to detail his costs. But sources close to the deals say he and his partners have cleared more than $40 million, much of it subsidized by taxpayer-supported agencies.

Sweeney’s allies say he is an intensely private man who does not welcome the attention the land deals have brought him. He previously listed Las Vegas as his business address but now lives in a $1.2-million oceanfront condominium near the Manhattan Beach Pier. He and his brother David competed in the 1984 Olympics on the Canadian sailing team. Both Sweeneys now hold dual U.S.-Canadian citizenship, friends said.

Brian Sweeney’s associates said the investor was drawn to the Malibu-area properties by many things, including the spectacular ocean views. He was impressed by how much celebrities Cage and Cameron spent for similar properties, Philipovitch said, and believes others might be willing to do the same.

Sweeney’s biggest purchases were in Corral Canyon, where 953 acres have the potential to yield up to 20 home sites. In the hills sandwiched between Pepperdine and Malibu Creek State Park, he bought another 610 acres, where a maximum of 18 homes might one day be built. That’s the most Sweeney could build under current applications, if approved by county planners.

Each of those areas is an unblemished stretch of coastal sagebrush. In nearly every direction, scenic vistas reveal the blue ocean or mountainsides thick with willows, bay trees and stands of California live oaks.

Sweeney has made it clear he is serious about developing the land. A series of different companies, all controlled by Sweeney, hold the land under varying names. Three consultants work to resolve building issues. Applications already have been filed for 36 certificates of compliance to subdivide the land. And a backhoe has begun testing soil in the hills above Pepperdine.

Don Schmitz, a Sweeney consultant, recently told homeowners in the Serra Retreat area, a neighborhood across Pacific Coast Highway from the Malibu Pier, that his client wants to build five homes on his hillside property above their exclusive community.

Neighbors fear that Sweeney will despoil the 147 acres that rise above their community--acreage long designated to become parkland. It is extraordinarily steep terrain, and the road that Sweeney is seeking would need to make deep cuts into the hillside.

As some gnash their teeth over such developments, Sweeney’s allies say that preservationists have only themselves to blame. On the 570 acres above Pepperdine, once known as Francisco’s Ranch, the owner has been waiting for years to sell, but the Santa Monica Mountains Conservancy has been slow to act, said Berry, the Malibu-area real estate broker.

“Now it’s going to cost the taxpayers a lot more money to buy it,” he said. Berry doesn’t blame Sweeney, who is exercising his property rights. He blames park agencies that try to squeeze property owners with low-ball offers.

“Sweeney bought it for $5.5 million, but he’s not going to sell it for $5.5 million,” Berry said. “He’s figuring if he can break it into 10 or 15 or 20 parcels, worth a million [dollars] apiece, you are talking about $20 million.”

Philipovitch said previous news accounts about Sweeney’s land deals “make him look like a con artist.” But, she said, “He has not done anything illegal or immoral. He has done what other property owners do to maximize the value of their land.”

Joe Edmiston, executive director of the Santa Monica Mountains Conservancy, said he has seen this kind of behavior before.

“He probably realizes that the way to an environmentalist’s heart is to threaten to despoil the land and move up on the priority list,” Edmiston said. “The more dastardly you make your proposal, the faster the environmental community runs to have it acquired.”

As fearful as environmentalists are, Los Angeles County has planning restrictions in place that could make Sweeney’s development plans more problematic than in his earlier ventures. An ordinance allows owners in hillside areas to adjust the lines between only two parcels. Adjustments to three or more parcels require environmental reviews and permits that can be denied.

“We are watching him and we have the planning department watching him,” said county Supervisor Zev Yaroslavsky. “We want to make sure there aren’t sequential applications to get around the law.”

That gives preservationists at least a measure of solace, but they are well aware of how effective Sweeney has been in the past.

“While these properties have extreme environmental importance, he’s not going to be able to make the threats he did in Big Sur and demand premium payment,” said Edmiston, the conservancy director, who is known as a wily real estate negotiator himself. “And I hope I don’t have to eat those words.”

*

Times staff writer John Johnson contributed to this story.