Bluff Tops Require $25-Million Down Payment : Newport Beach: Irvine Co. says it will develop the two parcels unless conservancy makes initial payment by February, meaning voters will have to approve tax plan in November if land is to be preserved.

NEWPORT BEACH —  Local conservationists must make an initial payment of nearly $25 million by February if they are to buy two large bluff-top parcels at Upper Newport Bay from the Irvine Co., according to an agreement signed Friday.

The Irvine Co. has given a local conservation group an exclusive option to buy two bay-front properties for $55.8 million. Under the agreement, at least one of the two must be purchased by Feb. 1 or the Irvine Co. will proceed with its plan to build housing on both parcels of land.

The rapid turnaround means that the fate of the Newport Conservancy’s effort will probably rise or fall with Newport Beach voters this November. The group will have to persuade city residents to agree to creation of a special assessment district.

“As a practical matter, voters need to understand that this is a one-time opportunity,” said Paul Freeman, who is leading the Newport Conservancy’s campaign. “With a yes vote, they are voting to preserve this land. With a no vote, they are voting to develop it.”

The conservancy has asked the City Council to create a citywide assessment district that would charge each Newport Beach property owner a fixed rate no higher than $10 a month for 30 years. The tax would cover all costs, including restoration of the land, construction of recreational trails and athletic fields and maintenance.

While the council has the power to create a special district without voter approval, a majority of council members said Friday they want to place an advisory measure on the November ballot asking residents if they favor it.

The council will begin debating details of the ballot measure at an afternoon session on Monday. For example, they must decide whether to impose the tax based on approval by a simple majority of voters, or require a stronger endorsement.

“I will urge my colleagues on the City Council to put it on the ballot,” Mayor Clarence J. Turner said. “I have always believed that if we wanted to preserve open space, we should be ready to purchase it.”

The bluff-top parcels, known as the Newporter North and Upper Castaways properties, overlook the state-owned Upper Newport Bay Ecological Reserve.

Home to several species of endangered and rare birds, the back bay and its adjacent bluffs comprise one of the best and largest coastal wetland systems in Southern California. The property is also extremely popular with hikers, joggers and others who now trespass to enjoy its sweeping views of the bay and ocean.

The signing of the agreement, held at the grassy ridge of the Upper Castaways site, was a landmark event for local environmentalists, who have been striving for nearly 30 years to find a way to protect the bluffs from Irvine Co. development.

“A few short years ago, people would not have believed this would happen,” Turner said.

Councilwoman Jean H. Watt, president and founder of the 2,000-member Newport Conservancy, said her motto during long negotiations with the Irvine Co. was “never, never give up,” even when the company originally said the land was worth as much as $120 million.

The 133.8 acres were appraised in February at about $69 million, and after intense negotiations, the Irvine Co. agreed to a 20% discount.

“This agreement signals the end of one phase and the start of another,” Watt said. “The conservancy has long been working hard to preserve these lands from development and now I’m delighted to say there may be a way to do just that.”

Watt stressed that buying the land will benefit both people and wildlife.

The larger, 77.2-acre Newporter North property is sensitive habitat that would mostly be reserved and restored for native animals, including the threatened California gnatcatcher. But most of the 56.6-acre Upper Castaways parcel would be used for recreation, including 12 acres for soccer and baseball fields.

The Upper Castaways is the cheaper parcel, with a price tag of $24.6 million. The purchase price of the other property is $31.2 million.

If the effort succeeds, it would be one of the largest land conservation purchases in Orange County history, eclipsed in price only by Laguna Beach’s purchase of 2,200 acres of Irvine Co. land in Laguna Canyon for $78 million.

The negotiations with the Irvine Co. were “protracted and difficult” but culminated in a good deal, said Scott Parker of the Trust for Public Land, a San Francisco-based conservation group that handled the negotiations on behalf of the Newport Conservancy.

Tom Redwitz, the Irvine Co.’s vice president of land development, said the company was persuaded to discount the price of its land because it was “very impressed” by the “effort, the dedication and the determination” of Newport Beach community leaders to conserve it.

“If it is the desire of the community to preserve it as open space, then the Irvine Co. is a willing seller,” he said.

Redwitz said the company would “absolutely” go ahead with its plans to build 363 homes on the two properties if the purchase falls through in February. The projects are already approved by the city and state Coastal Commission, so the company could break ground at any time after that, he said.

Despite the recession, Redwitz said, development of Newport Beach land remains extremely lucrative. For example, lots are currently selling for $1 million apiece in the Irvine Co.’s nearby Newport Coast development.

“Property in Newport Beach in close proximity to the ocean like this clearly has high demand,” Redwitz said. “Location means a lot in this business, and the location here is a 10.”

He said the price of the bay properties is steep--$417,000 per acre compared to $35,000 per acre for Laguna Canyon--because they are situated on rare, ocean-view coastline. Development would be fairly inexpensive since roads and other services already exist.

The agreement states that all $55.8 million must be collected in less than two years. “If and only if” the conservation group purchases one of the parcels by February, 1994, can it buy the second one, the agreement says. The second purchase can occur no later than February, 1995.

Raising the necessary funds by then would be almost impossible without a citywide assessment district. Watt said the conservancy could probably raise no more than $10 million from private donations and other sources, and it would take much longer than seven months to raise such a sum.

If the special district is approved, the $10 monthly assessment would be the same for each property owner, regardless of the land value. Conservancy officials said early surveys indicated that a fixed price was important to residents.

The negotiations were modeled after the historic Laguna Canyon purchase. In 1990, the Irvine Co. decided to sell land earmarked for a large housing development to the city of Laguna Beach and local environmentalists. Much of the money came from a special tax approved by Laguna Beach residents. Other funds came from the county and the state. The city and environmentalists are still trying to collect funds for a final $33-million payment due in 1995.

About 1,000 acres of the back bay have already been protected in the state reserve, and preserving the two adjacent bluffs would keep much of its ecosystem intact by giving animals room to roam, federal wildlife experts say.

Times correspondent Bob Elston contributed to this report.