CRYSTAL COVE -- A developer and the state parks department are pinning their hopes for reaching consensus on the long-stalled renovation of Crystal Cove's historic bungalows on an idea hatched in one of the rustic cottages: Downscale the luxury resort, and instead create a more modest retreat.
The catch: As much as $35 million would have to be raised to cover costs of renovating the structures.
The idea gained momentum during a meeting involving environmental activists, project investors, parks officials, lawyers and a Laguna Beach councilwoman last week in one of the historic cottages.
Laura Ann Davick -- a member of the Alliance to Rescue Crystal Cove, which hosted the meeting -- said the idea is in its "infancy" and the concessionaire and environmentalists have differences about how the proposal would take shape.
San Francisco-based developer Michael Freed and his fellow investors are under contract with the state to build a luxury resort on the state park land with rooms likely averaging at least $375 a night. The plan enraged environmentalists and others who feared it would make the state park an exclusive enclave for the rich.
After the plans for Crystal Cove became known in 1997, environmental groups lined up to oppose them, including the Sierra Club, the League for Coastal Protection and Orange County Coastkeepers.
State officials, stung by criticism of the plan they inherited from then-Gov. Pete Wilson's administration, now say they are willing to entertain other methods of funding renovation of the bungalows. Those include establishing a foundation or a public-private partnership to obtain low-interest loans and raise money from individuals and corporations.
Parks director Rusty Areias, who attended the meeting at Crystal Cove last week, said a compromise "would bring consensus where it has been elusive. It would bring a light to the end of the tunnel."
Freed said money could be raised by forming a partnership with a nonprofit, which would be able to get low-interest loans to help finance the project, thus bringing down the room rates. "We will know within 90 days how strong the interest is with the foundations out there," said Freed. "If we give it a good response, we will take the time to play it out. The only possible way they'll raise money is if I'm behind it and the state's behind it.
"If everyone is serious, I'm happy to go that route and see how serious everyone else is."
The state has scheduled an informational meeting on the Crystal Cove renovation plan for Jan. 18 at a location to be determined.
Susan Jordan of the League for Coastal Protection is one of biggest critics of the current renovation plan. She also attended the meeting last week.
"It all depends on whether the appropriate time and effort is put into it," she said. "It's only going to happen if everyone rises up and realizes how special this place is."
Areias said the parks department is interested in the alternatives if its concessionaire is. But he expects a quid pro quo for the investors.
"If we can be successful in what the others have proposed and there is consensus and sweetness and light and everyone is happy, that is my fondest wish," Areias said. "If we are not, then I would be very surprised if Freed doesn't demand everyone sign up and go arm and arm with him to the (California) Coastal Commission (to win approvals)."
Crystal Cove state park is made up of 2,791 acres of state-owned coastal land, 46 cottages built between 1921 and 1940 and a marine reserve. The park is a well-known dolphin breeding ground. In 1979, the cottages were placed on the National Register of Historic Places as the area's last "intact example of vernacular beach architecture."
The historic designation, won by residents who were trying to avoid eviction from the cottages at the time, sends renovation costs into the millions of dollars, Areias said. The cottages can't be torn down and reconstructed; they must be renovated with historic accuracy. Many have poor foundations, and all are on septic systems that must be replaced with sewer lines.
"The cost is staggering," Areias said. "And because it's on the national register, it straps us. We have to pay $9 million for the infrastructure. I've had that verified. If it was reconstruction, it would be a third of that."
Freed develops resorts that are also learning centers and considered by many to be environmentally friendly, though financed with high-end pricing. Freed's group developed the Post Ranch Inn in Big Sur and the Jean-Michel Cousteau Resort in the Fiji islands.
Though many questions remain, Davick said it is "really exciting that we are all sitting down at a table agreeing to look at some alternatives. We need to determine what the revised plan might be. It should not be done like the previous agreements - behind closed doors."
Chris Bradley, a Newport Beach architect who did fund raising for the Newport Beach Central Library, said the alliance of environmental groups is looking at establishing educational and research centers at Crystal Cove to study such things as the effects of urban runoff on fragile ecosystems.
"The next 30 days will be really critical to determine if this will work," Davick said.
The sides say the challenge of raising the money could be tough but feasible given the economic climate.
"There are a lot of foundations with a lot of money, and this is a gilded time," Areias said. "If Mr. Freed is willing to hold me harmless, I'm willing to give it my best shot."
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