Laguna Must Pay All Street Costs for Development

LAGUNA BEACH — A bitter, seven-year battle over development in a rural Laguna Beach community has culminated with a judge’s ruling that the city pay all costs--which could reach $2.7 million--for new roads in the area.

Orange County Superior Court Judge David H. Brickner ruled that the city must build and pay for new streets in the Diamond-Crestview neighborhood, which ultimately could accommodate up to 100 new homes.

The legal battle has been waged against the city by a group of about 19 property owners who want to build on empty lots in the hilly community, where poor road conditions have thus far limited development to about 56 homes.

But current residents, fiercely protective of their rustic lifestyle, have resisted additional construction and balked at the prospect that new roads could triple the population in their neighborhood.

Owners of the empty lots sued in 1985 and three years ago won a court order requiring the city to either bring the neighborhood’s mostly unpaved roads up to par or buy the empty lots from their owners. The order required the city to have a plan in place by July 31.

Missing the deadline, the City Council approved a plan for the area on Sept. 1 after dozens of city hearings. The plan, which ultimately could accommodate about 100 more homes, allowed for piecemeal installation of streets as new homes are built. The plan called for lot owners to pay for the portion of the streets in front of their property.

Brickner’s ruling gave city officials 45 days to submit a plan to install or repair roads.

Assistant City Atty. Hans Van Ligten said that while the city may be able to save money by building asphalt roads, which are less expensive than cement, whatever money is spent must be drawn from other city projects.

“There isn’t any more money,” Van Ligten said Friday after reading the ruling. “If this decision stands the way it is, the streets ultimately will be improved at the cost of other programs including, potentially, anything from the Police Department to (the purchase of) Laguna Canyon.”

The judge did rule in the city’s favor in one aspect of the lawsuit, however. Brickner refused to impose jail sentences or to order the city to reimburse the plaintiffs for legal costs.

“It’s sort of like adding insult to injury to say we want you to go to jail because you didn’t do it in the time period we wanted you to,” City Atty. Philip Kohn said. “Obviously, we didn’t complete it in time but, nevertheless, we believe we have been acting in good faith.”

Joe Gughemetti, a San Mateo attorney who represents the Laguna Beach lot owners, expressed satisfaction with the judge’s decision to force the city to improve and pay for the roads.

“The city has made a joke of this process. . . ,” Gughemetti said. “What the judge has done now is given them a drop-dead date.”

If the road plan is not submitted within the required 45 days, he said, the city could be liable for damages “as high as $12 million.”

“The consensus (among the lot owners) was that this thing has finally been brought to a head and the city can’t screw around with my clients anymore,” he said. “They either put in the streets or they pay a lot of money.”

City officials have also considered setting up an assessment district in the area to help pay for the street improvements. However, since the court has ruled that the plaintiffs are not responsible for paying for any part of the roads, Van Ligten said it would be “politically and legally” difficult to ask other residents in the area to help pick up the tab.

“You’d essentially be saying you have to pay for your neighbors’ streets,” he said. “We haven’t looked at it in great detail, but it doesn’t seem to be very fair.’

City officials also have indicated a willingness to consider buying at least some of the more environmentally sensitive lots in the area to preserve as open space.

On Tuesday, the City Council agreed unanimously to move forward with a plan to poll 300 Laguna Beach households to determine whether residents are willing to spend more money to buy undeveloped parcels in several areas of the city, including the Diamond-Crestview neighborhood.