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Deal conserves land, perhaps not tax dollars

Some worry the state may have overpaid for Corral Canyon parcels.

April 08, 2008|Tami Abdollah | Times Staff Writer

Eight years ago, Brian A. Sweeney, a Manhattan Beach real estate investor and developer, began buying land in the Santa Monica Mountains.

As environmentalists watched, he persuaded owners to sell him 26 parcels of prime coastal real estate. Piece by piece, he got L.A. County permission to alter boundaries that added road access and filed plans to develop homes. When he was done, Sweeney had quadrupled the market value of the land, without hammering a single stick into the ground.

In December, Sweeney sold 626 acres of that real estate in Corral Canyon to a conservation group, and he plans to sell 199 more acres by late summer, for a profit of about $12 million and a $7.4-million tax write-off.

Conservationists have hailed the deals, involving $17.2 million in public money, as a rare opportunity to link protected mountain land with the coast without negotiating parcel by parcel and without lengthy legal battles. Sandwiched on nearly all sides by local, state or federal property, the canyon fits like a missing puzzle piece in the patchwork effort to preserve wildlife corridors in the Santa Monica Mountains.

But the deals have left some pondering whether state agencies paid a premium for land that was in no imminent danger of development.

"People all day long threaten development, but a threat doesn't mean anything if there's no way of actually getting a development on a property," said David Myers, executive director of the Wildlands Conservancy.

Good investor

Sweeney said he was doing what any good real estate investor would do with property. "When I buy a piece of land, I see what the law allows you to do with it," he said. "I'm really trying to add something of value to the property and getting it in a position where you can sell it -- because you don't know if the state's going to buy it. Who knows if the money is going to run out tomorrow? You'd be waiting forever."

Sweeney bought much of the rugged canyon land through his Denver-based company, Malibu Ocean Ranches LLC, and transferred parcels among four other limited liability companies that he helps manage.

Because no two adjacent lots belonged to the same owner, each was treated separately and did not get the scrutiny that would come with a multi-parcel development.

Los Angeles County Planning Department and California Coastal Commission records show Sweeney made four lot-line adjustments and acquired a 60-foot-wide easement for road access. He also obtained certificates of compliance, required before development, and was given the go-ahead to build five single-family residences. Sweeney received permits to remove at least 30 oak trees.

What looked like a canyon divided among various owners, upon closer scrutiny, started to look like a major development.

"The issue is: can you build in such a pattern that is really environmentally destructive, putting these paths in, roads every which way, without taking a look at the whole thing?" said Joseph T. Edmiston, executive director of the Santa Monica Mountains Conservancy, which will help preserve the southern property. "You can't do bits and pieces and put it all together and say, 'Voila!' you have this big project. Well, under state law you can now."

Sweeney is well-known among conservationists and government officials. Legislators in 2001 tightened rules governing lot-line adjustments partly in response to his activities on coastal land farther north. Environmentalists thought he could not do anything similar this time around.

"Well, it turns out that it was, unfortunately, easier than anyone thought," Edmiston said.

The Corral Canyon properties, located in a coastal zone, require Coastal Commission review before bulldozers can break ground. The task of processing and approving so many parcels for residential development takes years and can lead to protracted legal battles.

"The dirty work is not getting the certificate of compliance or lot-line adjustments; that's the easy part of it," said Gina Natoli, a supervising regional planner at the county's Department of Regional Planning. "The hard part is developing, that's what takes a lot of time."

A private firm last summer appraised Sweeney's re-jiggered parcels at $24.6 million, based on comparable property sales.

The Trust for Public Land, a nonprofit land conservation organization, helped broker the deal and contracted the appraisal. It optioned the property, then approached the Mountains Recreation and Conservation Authority, which applied for state funds.

On Dec. 28, Sweeney sold the lower 626 acres to the Trust for Public Land for about $12.6 million, according to the trust, more than double what he paid for it but well under the appraised value. The difference can be claimed as a tax write-off.

State law does not require the trust or Sweeney to reveal the option price of the transaction.

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