An agreement reached in court will allow the owners of a Laguna Beach waterfront home to appeal a ruling that upheld the California Coastal Commission’s order that they remove a long-disputed seawall, though the agreement drops the couple’s efforts to make the state pay $25 million for the property and compensate them for lost rental income.
“This stipulation allows the case to move to the Court of Appeal without further delay so that we can achieve final resolution of this matter as quickly as possible and hopefully open up the beach once and for all,” Coastal Commission spokeswoman Noaki Schwartz said in a statement.
The property in dispute, 11 Lagunita Drive, features an 11-foot-tall, 80-foot-long concrete seawall, an exception among the sandy embankments rooted by vegetation above Victoria Beach.
The roughly 5,000-square-foot house was built in 1952. Previous owners built the seawall in 2005 as an emergency measure. It was meant to be temporary and its permit lapsed. The home went into foreclosure.
Another owner backed away from major remodeling plans in 2014 after the Coastal Commission pushed back, partly because of the seawall. Seawalls can interrupt natural sand flow, leading to erosion and the eventual disappearance of stretches of public beaches, according to the commission.
In 2015, shortly before the Katzes bought the house as an investment, the commission ruled the seawall could be reinforced as long as the house — which was built before the California Coastal Act set standards for coastal development — was generally unchanged. If the owners wanted a major remodel, the wall would have to come down, the commission said.
Laguna Beach approved plans and granted permits for the Katzes, who also own property next door, to make changes to siding, roofing, walls, patio, a bench, steps, fencing, gates, walkways, landscaping, deck surfaces, air conditioning units and an outdoor shower at 11 Lagunita and assured the owners they did not need Coastal Commission approval, according to court documents.
In April 2017, three months after permits were issued, the Coastal Commission demanded that the Katzes halt work on the home.
After a public hearing in August 2018, the commission unanimously issued a cease-and-desist order that required the Katzes to remove the seawall within 60 days and pay a $1-million penalty.
The Katzes and their attorney claim the remodel was “minor” because the framing of the house remained unchanged. The Coastal Commission disagreed.
The Katzes sued in an attempt to overturn the commission’s order. Last month, Orange County Superior Court Judge Randall Sherman said the Katzes must remove the seawall, though he dropped the seven-figure fine.
Sherman ruled Thursday that the cease-and-desist order be stayed while the case is appealed. Also, no unpermitted development or interference with public access is allowed during the appeal process.
The Katzes say the battle with the Coastal Commission has hamstrung them from selling or renting out the house, which they say is worth about $25 million, or $70,000 per month in rent.
“We appreciate that the judge struck the fine, but my clients, 11 Lagunita, followed the law, the city’s careful review and the commission’s past decisions, so the agreement we’ve reached with the commission has allowed us now to appeal the court’s ruling, and we believe it is the best result for all parties,” said Steven Kaufmann, attorney for the property owners.
Daily Pilot staff writer Hillary Davis contributed to this report.