Faced with strident public opposition, state parks officials may scrap a plan to turn historic cottages dotting the beach at Crystal Cove State Park into a $35-million resort. Unraveling the deal, quietly signed under Republican former Gov. Pete Wilson, could require the state to pay a developer up to $2 million.
Developer Michael Freed said he was surprised but would consider such an offer.
State parks spokesman Roy Stearns said the reconsideration was sparked by a raucous informational meeting on the resort last month. It drew an overflow, sometimes hostile crowd of 600 opponents to a Corona del Mar elementary school.
"Our intent was to listen, which we did. We heard them loud and clear. The residents made it clear they don't want a resort," Stearns said.
However, Stearns said the cottages' current tenants will be served eviction notices Feb. 15, ordering them to leave within 30 days. He said the evictions are necessary because leaking septic tanks must be replaced with a sewer system, which could cost up to $10 million.
Al Willinger, who has rented one of the cottages since 1972, questions the timing, saying the sewer system plans have yet to be completed. He said that could take several months or longer. The tenants pay the state about $480,000 annually in rent.
"As the owner of the land, the state has every right to do what it chooses to do," he said. But "it seems prudent as a taxpayer that the rental income should continue until plans for a sewer system are designed and approved by all the appropriate agencies."
State parks officials initially planned to have Freed pay for the sewer line connection while he refurbished the ramshackle beach cottages--structures that date to the 1920s--turning them into $375-per-night cabins.
Freed signed a 60-year contract with the state in 1997. To opt out, taxpayers would have to reimburse Freed's company for project costs so far, estimated at $1 million to $2 million. The money would come from state parks funds.
Freed, managing partner of Crystal Cove Preservation Partners, is under no obligation to accept the state's offer. But he said is open to the idea if the state can ensure that the cottages are preserved.
"I've been clear from the beginning that we want to see those cottages protected," he said. "This is not a profit-motivated deal. We don't want to go forward with a project if either the state of California or . . . the community is opposed to it."
Philanthropist and heiress Joan Irvine Smith, who joined environmentalists in opposing the resort, welcomed park officials' reconsideration.
"That would be lovely. That would be wonderful," said Smith, the great-granddaughter of Orange County land baron James Irvine. Her family sold the land to the state in 1973. State parks officials "dropped the ball in the first place," she said. "They did not open it up to public review. This belongs to the people."
She and other critics say the contract was signed without adequate public meetings or environmental review.
Smith said she hopes to move forward with a plan for an environmental, educational and art center at the site, but only if the resort contract is off the table, and the public review process can begin anew. Scientists, screenwriters, painters and others could stay in the renovated cottages under such a plan.
Brenda Stouffer of the Alliance to Rescue Crystal Cove, a group of longtime resort opponents, said that if the resort plan is scrapped, she envisions working with Freed on the educational and art center. She acknowledged that Freed is known as one of the most environmentally friendly developers in the nation.
"Our argument has not been with the developer. It has never been about him. It has been about state parks," she said.
In an unusual twist, many future proposals for the park could be taken over by the Irvine Co. When the company sold the land to the state for $32.6 million, it retained "first right of refusal" on any private project for the site that will take more than 10 years, even if another investor proposes it.
The company turned down the resort proposal three years ago, said Michael Stockstill, spokesman for the Irvine Co.
He declined to say what the company would do if the Freed contract is bought out. "It's just too speculative a situation to say anything about at this point."
State parks director Rusty Areias said buying out Freed's contract is one of three options under consideration.
"State parks is contractually obligated from the Wilson administration, but we are reevaluating what our true options are," he said.
The other two options are:
"We're kicking around all the alternatives and trying to determine where the money would come from. And I will tell you, that is a big problem," Areias said.
He and other state officials say the cottages cannot be left in their current condition without eventually collapsing. The cottages are on the National Registry of Historic Places, because they are the last 1920s-era beach colony along the Southern California coast.
"As custodians of the history of the state, we are going to preserve those cottages in some form," Areias said.
But refurbishing them could cost up to $35 million, including $10 million for the new sewer system.
Stouffer of the environmental alliance questioned preparing a sewer system plan when the fate of Crystal Cove remains up in the air.
"How large of a system is that encompassing if you don't know what is going to be there in the future?" she asked.
But Areias said state water officials have ordered the replacement of septic tanks within two years, because of strong suspicions that raw sewage is seeping into the sparkling waters off Crystal Cove, a dolphin-birthing ground. Stearns said the evictions are necessary so the work can begin.
Occupancy of the cottages will depend on which proposal moves forward, Areias said. He said under no circumstances would the existing tenants, some of whose families have lived in the cottages for generations, be allowed to stay or move back in.
Willinger, spokesman for the Crystal Cove Residents Assn., said the eviction was expected.
"We know that's the reality. It's sad, but that's reality."
Willinger and his wife live in the cottage only part time because of his wife's health. But for the four years they lived there full time, "our quality of life was the greatest--fine memories, being in tune with nature. . . . A very special place in the world is very difficult to find in a metropolitan area," he said.
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