San Clemente Settles, Will Fix Hillside

A crumbling hillside in San Clemente will get a top-to-bottom fix, thanks to a $10-million settlement between the city and 20 families whose homes were damaged or threatened by a slow-moving landslide.

Unlike most landslide settlements in which homeowners are paid, the money will be funneled into a trust fund, most of which will pay for hillside repairs.

The city and homeowners’ attorneys are calling it a creative resolution to a long-running dispute.

“If you prosecute a lawsuit and you win, the best you can do is win money,” said Karen Walter, an attorney for the city. “But if you can reach a collaborative settlement, you can repair a hillside.”

According to the settlement, three homeowners, whose properties on Via Bellota slid and cracked beyond repair, will have their lots restored and get $500,000 to rebuild their homes.

The remaining money will be used to rebuild the hillside. The work includes stabilizing four vacant ocean-view lots on Via Bellota -- three of which will belong to the city -- and creating 14 mobile home lots. Ten existing mobile home lots also will be repaired.

The city will sell the new lots to help recoup repair costs.

San Clemente is contributing $6.4 million to the fund; several other defendants, including the nearby Shorecliff Golf Course, the adjacent mobile home park and the homeowners association, will pay a total of $3 million to the fund.

The homeowners had alleged that a broken city water main and over-irrigation by neighboring property owners contributed to the slow-moving slide. Three homes began cracking in October 1999 and were deemed uninhabitable in February 2001, said Michael Hearn, an attorney for the homeowners.

Hearn, who specializes in landslide cases, said he had never seen a settlement like this, in which the repairs generate funds to help pay back the defendants.

“I think this will become a model for future settlements because it helps the people who are funding the repair,” Hearn said. “It motivates them because they can get their money back.”

The city and homeowners decided to pursue the settlement because geologists said the homes would continue to slide unless the entire hill was repaired. A different area of the same hill slid more than 10 years ago.

To stabilize the hillside, engineers will have to regrade the slope and haul in fill dirt to shore it up.

A plan will be developed later this year.

City officials in nearby Laguna Beach are wrestling with how to pay for repairs to a hillside in Bluebird Canyon, where 20 homes were destroyed or severely damaged in the June 1 landslide.

Though the city and residents so far have pledged cooperation in putting the hillside back together, Laguna Beach officials have not determined how to pay for the repair work.