possible development of coastline...

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Posted by kelphead on July 23, 2001 at 19:01:05:

"in hearst land fight, old papers are new weapon"

law: obscure deeds give firm an edge in deciding scenic coastline's fate.

by kenneth r. weiss and john johnson
times staff writers

"san simeon, calif.--rolling across a golden pastureland in a shiny new suburban, stephen t. hearst talks about preserving the memory of an enchanted youth: riding horseback with his father, camping deep in the canyons behind hearst castle, hunting for deer, wild pigs and quail.

"we want to make sure our kids can enjoy this place as much as we did," said the great-grandson of william randolph hearst.

but lawyers for hearst corp. appear to be heading toward something very different from the goal of preservation that hearts's words suggest.

the lawyers have amassed a trove of obscure 19th century land records that could allow the corporation to chop the 83,000-acre ranch into 279 parcels and create oceanfront subdivisions.

a relatively new wrinkle in california land use law, the records known as certificates of compliance show evidence of long-forgotten property splits. under state law, the certificates can give modern landowners carte blanche to circumvent local zoning rules and other restrictions on development.

the certificates have provided real estate speculators with powerful leverage over coastal open space. conservationists consider their use a form of blackmail, forcing them and taxpayers to pay hugely inflated prices to protect the land from development.

yet stephen hearst swears that's not his intent.

"we have no specific development plan," he said recently.

instead, he said, the corporation simply wants to gauge the land's "potential" for development to help determine its maximum value. the key here is that propery that can be turned into building lots is worth much more than grazing land.

once he knows the value of the development rights, hearst said, he hopes to sell them to taxpayers or private foundations, which would retire the rights and preserve the land much as it is.

as hearst envisions the arrangement, the corporation would retain ownership of the ranch but give up rights to build on 99.5% of it. such a plan could still leave enough room for a version of the resort hotel complex that the hearsts have proposed in the past.

many ranch owners have used certificates of compliance very successfully, hearst said. "every one of these deals was absolutely tailored to the landowners' needs."


in recent years, developers brandishing the certificates have unlocked thousands of acres along the coast that were thought to be exempt from subdivision. conservation groups desperate to protect some of that land have paid huge premiums.

tactic gains popularity

in 1998, two conservation groups forked over $43 million--twice the price negotiated a few years earlier--for a 7,000-acre dairy farm north of santa cruz. the motivating factor: brian sweeney, a las vegas land speculator armed with certificates of compliance who was threatening to carve up the farm into 139 parcels.

in another deal involving certificates and sweeney, the trust for public land recently paid about $26 million for a smaller ranch on the big sur coast. this time sweeney made a $24-million profit on the sale after moving to subdivide the ranch into nine large home sites.

the run-up in prices in these cases and others was based on the discovery of old deeds and other records that indicate, sometimes in the vaguest ways, that the land was not always one parcel but a collection of many historical lots.

these underlying parcels might have been crude homesteads or mere well sites. yet, even if nothing was built on it, evidence that the property existed has often been enough to allow modern owners to subdivide again.

moreover, the modern owners have been able to adjust the boundaries of the old parcels so they can be moved around like pieces of a puzzle.

a 1992 california appellate court ruling gave landowners broad ability to move lot lines so long as the alterations make the lots more suitable for building and do not create any more parcels than already existed. the new location of a lot need not encompass or even touch the original one.

conceivably, that means a landowner can take an isolated, largely worthless lot on a mountainside and move it to the beach, where it will be worth a fortune.

conservationists forced to pay more

such strategies have emerged over the last three decades to thwart ever-tightening zoning rules in california communities that have become resistant to growth. developers in napa, sonoma and mendocino counties have used certificates of compliance to create nearly as many new building sites as they have through the normal planning process.

more recently, the strategy has become a way for landowners to force consevationists to pay ever higher prices for land they want to protect as open space.

"this is a new kind of environmental terrorism," said rep. sam farr (d-carmel). landowners and speculators, he said, have managed to hold the land hostage. "pay the asking price or it will be developed."

some officials worry that escalating prices will drain the accounts of government and private foundations so lss land can be preserved for wildlife and recreation.

"do an inventory of all of the land that might be subject to acquisition to preserve it for the public," said pedro nava, a california coastal commissioner. "with this kind of artificial inflation of prices, the numbers are going to be huge."

douglas wheeler, former california resources secretary, estimates that a deal for the hearst ranch development rights could cost $300 million or more. it would almost certainly need financial contributions from the federal and state governments, he said.

wheeler is associated with two of the half-dozen conservation groups intererested in preserving as much of the ranch as possible.

stephen hearst said he is getting close to picking one of the groups to help him structure a deal. at issue is how much land would be kept as open space and how mcuh would remain eligible for development. that balance may well depend on the negotiated price.

bruce babbitt, the interior secretary under president clinton who now represents the hearst interests, defended the use of certificates of compliance to maximize the value of the land.

"i would advise any client who is considering alternative uses to perfect their rights," he said. "it's good, proper and correct to do that."

paper trail dates back to 1852

to perfect its bargaining position, hearst must first persuade san luis obispo county planners to apprive the certificate of compliance needed for the ranch to be cut into 279 parcels.

stuffed in five large binders at the planning department, the records date back to 1852. some are in barely legible handwriting. each shows how title was passed from one owner to the next.

one document states that "for and in consideration of the sum of $10 in gold coin of the united states," j.h. mcgovern sold 600 acres to piedmont land and cattle corp. in 1914. piedmont land and cattle became a hearst company.

the hearst ranch contains one of california's original mexican land grants, called rancho piedras blancas. documents indicate that in 1852, jose de jesus pico claimed the rancho, which then was more than 48,000 acres. from pico, a chain of ownership passed the land into the hearst family.

hearst researchers found only 24 parcels on the rancho and 12 more down the coast. but they located 243 parcels farther east in the hills and mountains.

those lots, mostly ranging from 40 to more than 500 acres, are on the steepest terrain. they would be the least desirable areas for construction--unless they could be moved toward the ocean via lotline adjustments, a perfectly legal maneuver.

under the current zoning, hearst would be entitled to build at least two dwellings on each parcel.

county planners expect most of the hearst ranch certificates to be approved within the next couple of months. as long as the records are legitimate, planners say they have no right to reject them under the state's subdivision map act.

but coastal commission officials disagree, saying that more restricitons can be placed on them. the certificates represent a direct threat to the commission's authority to regulate development under the coastal act, and the panel is not about to relinquish that power without a fight.

panel urges tightening of restrictions

the commission, fully cognizant of the hearst strategy, countered this month with recommendations that san luis obispo county tighten zoning and impose other development restrictions on the ranch and elsewhere along the county's coastline.

the commissioners also want to push for new legislation that would constrain the use of certificates of compliance.

"these certificates really tick me off," said sonoma county supervisor mike reilly, a member of the coastal commission. "why go through all the work of setting up a general plan if someone can go around it by digging up documents that date back to the 1850's?"

in a letter to the commission, hearst has opposed any "amendments to the [subdivision] map act that would strip a property owner of the existing value of underlying legal lots....these changes would have substantial negative effect on agricultural land values."

hearst said he has a fiduciary duty to make money for the corporation and the family trust that owns it.

but for the most part, his approach has been nonconfrontational, in contrast to the combative stance of his father, george randolph hearst jr., who fought unsuccessfully three years ago for the right to build an extensive resort complex on the ranch.

an affable 44-year old who favors jeans nad cowboy boots, stephen hearst has been meeting with local residents and giving tours of the sprawling ranch, which stretches from the santa lucia range to the ocean, encompassing 18 miles of coastline.

he talks a lot about conservation and attachments to land that has been in the family for 135 years. he generally sidesteps questions about specific development plans, although he acknowledges that nothing has been ruled out, including the resort complex shot down three years ago.

"some [people] were very emotionally opposed to this," he said. "i don't want to give them a target. i don't want to be that target."

if there is a clue to his intentions, it may be down the road at the central ranch in cambria.

after the owner discovered 23 underlying parcels, he negotiated a multimillion-dollar deal with the nature conservancy that allowed the ranch to continue to operate, while protecting a forest of monterey pines and permitting some home building.

"it's a template," hearst said, "that has worked for other landowners."

but hearst cautions against drawing any conclusions about his plans for the family ranch.

he intimates that he faces challenges from within the family as well as outside it. in the past, some in the family have noisily quarreled over the future of the ranch.

his father is chairman of the hearst corp. board, but that doesn't mean stephan can count on his unqualified support.

"did you always see eye to eye with your dad?" he asked. "in any large family, you have divers opinions."

sunday, july 22, 2001.


"speculator ratchets up coastal costs"

by john johnson and kenneth weiss
times staff writers

"it took a las vegas land speculator with an eye for california's coastline to recognize the value of an arcane legal document known as a certificate of compliance.

applying for these certificates, a legal mechanism to grandfather in ancient underlying parcels, has long been used by developers to subdivide their property outside of the usual local planning process.

but brian sweeney was among the first to use this legal avenue not to expedite new construction, but to boost the price of land sold for preservation as open space.

sweeney's first deal was in santa cruz county, where he took an option in 1997 to buy the 7,000-acre coast dairies property that ran along nearly seven miles of coastline.

sweeney optioned it initialy as part of a planned land swap, said sandy lydon, a retired professor who worked with him. sweeney declined to be interviewed.

when the swap fell through, sweeney tried to coax environmentalists to buy the property. his option was costing $1 million a month; he needed to do something fast.

conservation groups acknowledged the land's beauty and importance but declined to buy because they had more pressing purchases.

lydon said the experience taught sweeney a lesson: "he got the idea that to get the enviromentalists off their butts, what he needed to do was create a crisis."

so sweeney hired attorneys and surveyors to dig into old property records. they found 139 underlying parcels and filed for certificates of compliance on all of them.

he dumped his documents in the county's lap and announced, "i have 139 buyers ready to build monster homes." that, lydon said, "got everybody's attention."

conservation groups were suddenly ready to deal. the price was now double that of an earlier coastal conservancy option on the land. but the choice was to meet sweeney's price or see the gentle coastal plains and redwood forests turned into a private enclave for the wealthy.

the save the redwoods league and the turst for public land helped amass money frm non-profit foundations and taxpayers for the $43-million purchase.

sweeney's second coup came farther down the coast in big sur. he bought a 1,226-acre ranch from the estate of the late allen funt, creator of tv's "candid camera."

funt's ranch in big sur is the backdrop to one of the most photographed places in america: the graceful bridge where california 1 spans the mouth of the bixby creek, far above the pacific.

sweeney produced certificates of compliance for nine parcels and threatened to built mansions on each of them.

once again, alarm bells sounded in the environmental community. sweeney sold the bulk of the funt ranch to the trust for public land for more than $26 million--a profit of about $24 million.

environmentalists have been buzzing ever since.

"this type of land-churning for greed is totally inappropriate," thundered rep. sam farr (d-carmel), who noted that the property was purchased with a combination of private and taxpayer funds.

lydon said environmentalists must bear some responsibility for how things played out.

environmentalists aren't the only ones to take a lesson.

"obviously," lydon said, "the hearst people learned something."

sunday, july 22, 2001.

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