LAGUNA BEACH : Street Improvement Ruling Criticized

Officials and some homeowners Friday assailed a court decision that holds the city responsible for what could amount to millions of dollars in improvements to six hillside streets above Woods Cove.

City Manager Ken Frank called the ruling by the 4th District Court of Appeal “absolutely crazy” and said it will be appealed.

The decision was a victory for a group of 15 landowners with undeveloped property at the top of the Crestview-Diamond-Gainsborough neighborhood, whose plans to build had been blocked by the city’s demand that streets leading to the lots be widened first.

The city claimed it has no obligation to improve the narrow streets, which it contended were private, and nearby homeowners, who joined the city in the case, also opposed widening.

The landowners had sued the city after being told their 43 lots were unbuildable and could not be sold until six streets were widened at their own expense.

The appellate court last week reversed a Superior Court ruling in April, 1987, by Judge Jerrold S. Oliver that rejected the landowners’ contention that the city should either approve their building plans or buy the property. The landowners had asked for $6 million, which they contended was the value of the land without building restrictions.

Oliver ruled that the roads running up the hill are public city streets but that Laguna Beach had no obligation to maintain or improve them. They include Diamond Street, Crestview Place, Crestview Drive, Gainsborough Place, Gainsborough Drive and Gainsborough Way.

But the appeals court ruled that the city accepted the streets into its system in the 1940s and that they have been used and improved by the city for almost half a century. The city also named them, negotiated agreements for utility lines and contracted for installation of a sewer system. Therefore, “the city has a common law duty to improve, repair and maintain its own streets,” the court ruled.

“This flies in the face of what’s taken place in that neighborhood in the past 40 to 50 years,” Frank said. “Everybody knows they are private streets.”

Frank said the landowners suing the city were speculating on the land. “I think they just took a flier figuring if they could get the court to rule in their favor they’d make a big profit,” Frank said. “Those lots are unbuildable.”

Court records show the lots were purchased between 1959 and 1982 for prices ranging from $901 to $42,000. An attorney for the landowners claimed each lot would be worth from $100,000 to $175,000 if they were buildable.

The property is part of a subdivision approved by the county in 1925 and annexed to the city in 1927. Court records show the streets in the tract had been built in 1924. They range from 16 feet wide in some cases to no more than nine feet. Current city standards require roads to be 40 feet wide.