A Cliffhanger Above Playa Vista Project

Though many are familiar with the struggle over the giant Playa Vista project, relatively few are aware that the bluffs above the development are the focus of an equally contentious real estate saga that has involved many of the same players.

San Francisco-based Catellus Development Corp., one of California’s largest real estate firms, and previous landowners have tried for more than a decade to develop what they consider one of the Los Angeles area’s prime residential sites, a 32-acre parcel in Westchester called West Bluffs.

The 114 home lots--many with striking city and ocean views--planned for the property each could fetch $400,000 or more if Catellus had been able to build the necessary streets, utility hookups and other improvements. Instead, the developer is locked in a legal standoff with environmentalists and nearby homeowners who want the land preserved as open space.

“If you can build houses there, you are going to hit a home run,” land broker Chris Atkins said. But litigation “could stop you for two months to 10 years. That could wipe out a small developer or hurt the bottom line of a big developer.”

A coalition of environmentalists and residents, many of whom have battled Playa Vista, has delayed the project by challenging in court previous approvals granted by the city of Los Angeles and the California Coastal Commission.

Catellus has won most of the lawsuits, but opponents, which include the Spirit of the Sage Council and the Coalition of Concerned Communities, have filed for appeals and court orders that continue to block work. Attorneys for the groups said they plan to file another appeal today that effectively would extend a court order blocking construction on portions of the bluffs that fall under the jurisdiction of the Coastal Commission.

West Bluffs, which sits about 100 feet above the Ballona Wetlands where Lincoln Boulevard climbs up into Westchester, once shared a common owner with Playa Vista: Howard Hughes Realty Co.

The real estate arm of Howard Hughes’ business empire spent many years planning and winning government approvals to build a residential development atop the bluffs before it sold the property to Catellus in December 1997. (Howard Hughes Realty also sold off its interest in Playa Vista.)

With Hughes having secured most of the necessary government approvals, Catellus executives said they had planned initially on selling homes by the middle of 2000.

“It was entitled and it was being approved, and there was a reasonable expectation that we could accomplish a difficult process,” said Bill Dennis, senior vice president of Catellus Commercial Group, a division of Catellus Development. “But here we are. We are basically dealing with the exact same group of environmentalists and obstructionists that Playa Vista has dealt with for years.”

But what developers consider valuable and scarce residential real estate, environmentalists view as one of the last remaining bits of a complex coastal ecosystem. The north-facing bluffs complement the wetlands below by providing the birds, insects and other animals from the coastal lowlands a dry place for nesting, said Kathy Knight, wetlands coordinator for the Spirit of the Sage Council, an environmental group.

“It is the only bluff left in a natural state that supports the Ballona Wetlands,” Knight said. “We want to use it as an educational area for students to learn how to restore that particular ecosystem.”

In addition to waging a legal battle, Knight and other environmentalists have offered to buy the property from Catellus if they can raise the necessary funds from public and private sources.

“I just hope that Catellus can work with us so we can come up with a win-win situation to save this last bluff,” she said.

Catellus is “not philosophically opposed” to selling the property for open space, but there is no evidence that environmentalists can raise the tens of millions of dollars necessary to acquire the land any time soon, Dennis said.

“The key to getting our attention is to have a very thoughtful plan backed by a demonstration of committed funds,” Dennis said. “Those two things we have not yet seen. We are not going to stop the project waiting around for something to happen.”