Builder Wants Out of Deal for Low-Cost Homes in Palisades

SACRAMENTO —  A Los Angeles development firm, which has appealed to the Legislature several times for help in fights with the Coastal Commission, now wants lawmakers to set aside a 1980 agreement requiring the firm to build low- and moderate-income housing near its controversial subdivision above Pacific Palisades.

Assemblywoman Cathie Wright (R-Simi Valley) on July 3 added an amendment sought by Headland Properties Inc. to a bill that would increase the membership of the Santa Monica Mountains Conservancy Board.

In the words of the amendment, Headland would be willing to provide “substantially equivalent public benefits” instead of 100 units of moderately priced housing at the gateway to its Palisades Highlands development on Sunset Boulevard.

Headland tried several times in 1979 to get the Legislature to delete its development from Coastal Commission control.

Homes Valued to $2 Million

The 1,100-unit hillside housing complex, with homes valued at up to $2 million, is located in a steep, scenic canyon just north of the intersection of Pacific Coast Highway and Sunset Boulevard.

The amended version of the Wright bill is scheduled to be heard Wednesday by the Senate Natural Resources and Wildlife Committee.

It has triggered opposition from the Coastal Commission, Sierra Club and Western Center on Law and Poverty, which contend that the bill could undermine other coastal housing agreements.

It also has revived the debate over the state’s role in requiring low- and moderate-income housing along the coast. That fight was widely regarded as being resolved in 1982 when the Legislature took the commission out of the business of requiring builders to set aside “affordable housing” in their developments.

To determine a suitable price for “affordable housing,” the commission used a formula tied to the median income and the average home price in the area. No specific price range has been set for the 100 proposed moderately priced Headland homes.

The sole supporter of the bill listed by the Natural Resources Committee is Headland Properties Inc.

Charles Chastain, the firm’s executive vice president, said that he had no intention of reviving the affordable housing debate. He said he was merely trying to modify the conditions for his own project.

Would Force Reviews

Chastain argued that low-income housing in the area is not feasible, because the land is too far from adequate public transportation and other services needed by lower-income residents.

“I think it would be almost criminal to stick people in an area like this without looking at the job market, which is 20 or 30 miles away,” Chastain said in a telephone interview with The Times.

He insisted that Headland is not attempting to “renege or trying to get out of that permit” with the Coastal Commission.

If he succeeds, Chastain said that he would like to build 75 higher-priced condominiums where the affordable housing is now planned. In turn, he said, he would either buy land for affordable housing or build the housing elsewhere.

Before doing so, however, the bill would require Chastain to receive approval of the Coastal Commission or the City of Los Angeles.

Peter Douglas, the commission’s newly appointed executive director, said that Wright’s bill would force the commission to “open up all those permits that had affordable housing” requirements. Moreover, he said, because of budget cutbacks he does not have the staff to conduct the reviews.

Roy Gorman, the commission’s chief counsel, said that his preliminary opinion is that Wright’s bill would “affect a lot of projects, not just one or two.” But he could not pinpoint any in addition to Palisades Highlands.

He estimated that the commission signed between 100 and 150 housing agreements before 1982, affecting between 3,000 and 4,000 units. Gorman said that at least 1,300 units have been built.

In 1980, the commission gave Headland approval to build 740 housing units in its subdivision. In exchange, Headland pledged to dedicate 1,000 acres to the public and build at least 100 units of low- and moderate-income housing.

So far, neither condition has been met.

State Balks at Plan

The land donation still is being negotiated, because the state Department of Parks and Recreation has balked at accepting all of the hillside land. Department officials say that because landslides are prevalent in the canyon, they do not want to be held liable if homes are damaged by slides.

Meanwhile, Chastain has persisted in trying to modify the housing condition attached to his permit.

Saying that “we need some creative thinking,” Chastain said he has considered several alternate suggestions.

At one point in the last two years, he considered a complex arrangement to build housing and donate a portion of his revenues from rentals to the Santa Monica Mountains Conservancy which, in exchange, would transport inner-city children to the seashore for outings.

Surprised by Amendments

Douglas said that he was surprised by the Wright bill amendments, because he thought an alternate plan could have been worked out.

Other critics complain that passage of the bill and its signing by Gov. George Deukmejian would further weaken the coastal planning process.

“To come back and get out from under those conditions makes a mockery of the entire process” of coastal planning, Paula M. Carrell, a Sierra Club lobbyist, said.

But Wright said: “My main interest is in getting Westlake Valley and Agoura Hills on the (Santa Monica Mountains) Conservancy” Board, which buys open space for the state.

“If the committee doesn’t agree to (the Chastain amendment), then I’ll just take it out.”