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Crystal Cove's Sea Change

Cost-Benefit Ratio a Sticking Point in O.C. Resort Plans


CRYSTAL COVE — The planners and dreamers who hope to remake the seaside historic district of Crystal Cove State Park into a boutique resort can expect to face a skeptical public as they take the wraps off their long-secret plans.

Environmentalists and legislators already have voiced concerns about the effects of construction on marine life and about the state's role to rehabilitate the only 1920s and '30s cottages on the Pacific coast.

Now, hospitality industry experts wonder how anyone can recoup the renovation expenses without turning the state-owned land into an exclusive enclave for the rich.

Indeed, the estimated $20 million to $25 million in construction costs to renovate or rebuild 46 bungalows and add up to 44 more units scared away major operators.

"It was just not economically viable for us," said Brenda Follmer, a spokeswoman for Delaware North Parks Services, which operates Yosemite National Park. "It was going to cost a lot more to do it right than the revenue would cover."

The state Department of Parks and Recreation estimates that the average nightly room rate will be $225, and those planning to renovate the district expect it will go a little higher. But hotel experts figure rooms will have to average more than $300 a night to pay off debts.

Those kinds of prices are out of the average wage-earner's league, though a small number of the units are expected to go for $100 a night.

Undaunted, state parks officials and a consortium led by the Post Ranch Inn, the wildly successful and exclusive private resort in Big Sur, are poised to sign a contract to create a resort that they say will be available to everyone--rich and poor.

"I don't think there's any question it'll work," said Michael Freed, a general partner of Post Ranch, on which the Orange County project is modeled. "Nowhere on the coast is there a group of cottages from the '20s and '30s era. It's a special place."

Some in the hospitality industry agree, saying the resort would be so different and so unusual that it won't compete with its high-end neighbor, the Ritz-Carlton hotel in Dana Point.

More important, they say, Freed's track record would ensure that Crystal Cove would capture the imagination of wealthier patrons who would pay $400 a night to rent one of the bungalows for weeklong family vacations. Those customers, Freed acknowledges, will be paying the lion's share of the costs.

But even Freed concedes that the state will have to wait five to seven years, at least, before its cut--5% of gross receipts--gives it the $1 million a year that it wants from the project. The state already is collecting $500,000 a year from the current tenants.

But ultimately, the question is whether the posh, modernistic Post Ranch concept can be transplanted to Crystal Cove, where the ragtag collection of homey, family-oriented cottages is listed on the National Register of Historic Places.

Freed has not done any marketing or feasibility studies on the Crystal Cove concept. The only one done, by state parks, is 4 years old.

"Post Ranch is a very, very exclusive, high-dollar operation, not a mom-and-pop tourist area," said James Erlacher, a vice president for development at Marriott International. "I'm surprised the state would be making comparisons between the two."

On the Crystal Cove beach, at the end of a summer-dry creek bed, the old general store that Vivian Falzetti uses as her art studio bears a faded sign that reads: "Crystal Cove Standard Time. Please set your clocks back to 1930."

Falzetti, her husband and others in the 46 bungalows--six of which are vacant--are spiritual heirs of those who first built shacks on the secluded beach in the late 1920s on land owned by the Irvine Co., the county's biggest landowner.

The shacks expanded into houses, with jerry-built utilities, and typified the funky beach hamlets along the coast. People came not so much to swim but to draw, to read, to write, to commune with nature--the ocean on one side, sheer cliffs on the other.

Crystal Cove is the only community left, "the last intact example of vernacular beach architecture," according to the National Register. It is also the only stretch between Newport Beach and Laguna Beach that has road access to the sand from Coast Highway.

The Irvine Co. sold the 12.3-acre historic district to the state in 1979 as part of the 2,791-acre tract that became Crystal Cove State Park.

The state since has been trying to figure out what to do with the property, finally gaining the right several years ago to evict residents on a month's notice. Residents, meantime, have made only the most necessary repairs, and some homes are so dilapidated that they can only be torn down and rebuilt.

"We don't know how long we're going to be allowed to stay," Doug Falzetti said. "Some people already have been evicted."

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