Tide Turning in Favor of Saving Wetlands : Development: Debate over fate of Bolsa Chica salt marshes illustrates the delicate balance between environmental protection and property rights.

This year, two dramas are unfolding along the Huntington Beach shoreline that will test the limits of laws that safeguard wetlands and could affect a scarce natural resource.

Each illustrates the intense economic pressures that inflame the debate over wetlands and the struggle to balance conservation with the need to tread lightly on a landowner’s property rights under the 5th Amendment.

At the Bolsa Chica Ecological Reserve near Huntington Beach, a developer wants to make a deal that even some environmentalists cannot resist. The Koll Co. has offered to arrange a $102-million restoration of Bolsa Chica--considered a jewel among Southern California’s salt marshes--as long as it can build on 25% of the land.

A few miles away, landowners have resorted to the courts in their effort to determine the future of a 66-acre marsh that stretches along Pacific Coast Highway. The investors have sued state and city officials, claiming that they unfairly stripped their land of value by prohibiting development there.

Perhaps no marsh other than Bolsa Chica better illustrates the difficulty of figuring out what to do with privately owned wetlands.

For more than 20 years, developers have tried and failed to build at the 1,700-acre Bolsa Chica site. Now, the Koll Co., which manages 1,400 acres for the owners, Bolsa Chica Properties, is trying to break that logjam with an ambitious proposal to enhance and restore nearly 850 acres of wetlands.

In return, the Koll Co. wants permission to build nearly 5,000 homes, mostly on the Bolsa Chica mesa but also on 100 acres of wetlands. The owners have agreed to pay for $35 million of the restoration and are trying to line up others to pay the remainder of the $102-million price tag.

Environmentalists have mixed reactions to the Koll Co. offer. Amigos de Bolsa Chica, a local group that has spent 20 years staving off development proposals there, recognizes the benefits of the guaranteed protection and paid restoration and has agreed to remain neutral on the plan.

“You have to kind of bite your tongue on these things,” said Adrianne Morrison, executive director of Amigos de Bolsa Chica. “On one hand, California has lost 91% of its (coastal and inland) wetlands and we shouldn’t lose any more, but there are procedures to go through, and landowner rights, and you have to balance that.”

Most environmentalists have serious reservations about the Koll plan. Gary Gorman of the Huntington Beach Wetlands Conservancy, a local group that successfully restored the 25-acre Talbert Marsh in Huntington Beach, calls it “a crapshoot.”

“What you’re losing may be more valuable than what you’re gaining,” Gorman said. “I’m not a big advocate of mitigation. You’re destroying a known historical quantity and going elsewhere and digging a hole and trying to re-create it.”

Lucy Dunn, Koll’s senior vice president of development, said the plan is a good compromise. “Without the development, you don’t get restoration,” she said. “If you have to choose between the risk of failing and the choice of doing nothing and letting the area further degrade, I’ll take the risk. It’s worth it.”

State and federal officials have raised red flags, saying they want Koll to avoid the low-lying wetlands and build only on the mesa. The Koll Co. needs the approval of the Huntington Beach City Council, the California Coastal Commission, the state Department of Fish and Game and three federal agencies--the Army Corps of Engineers, the Fish and Wildlife Service and the Environmental Protection Agency.

Koll is expected to start seeking governmental approval in early 1993, starting with the Huntington Beach City Council. Dunn, of the Koll Co., estimated that it will take a year.

When it comes to negotiating sessions, the government agencies realize that they must walk a fine line or face charges that they violated a landowner’s constitutional rights.

In 1986, the California Coastal Commission banned all residential and commercial development on land known locally as the “Huntington marshes”--a 66-acre strip on the inland side of Pacific Coast Highway stretching from Beach Boulevard to Brookhurst Street. The land was zoned for conservation by the commission as part of a coastal land use plan developed by city officials.

Two investment groups based in Rancho Cucamonga, which bought the land in 1990, have filed a lawsuit in Orange County Superior Court claiming that the city and state should allow them to develop part of it or compensate them for the land at a fair market price.

“They purchased this property with the intent to develop it and have been faced with a situation where all the permitting agencies have refused to even consider the possibility,” said Bill Halle, an Irvine attorney representing one of the investment groups, Pacific Enviro Design.

The lawsuit challenges the constitutionality of the 16-year-old Coastal Act. Grounds for the suit lie in the 5th Amendment, which states that private property cannot be taken for public use “without just compensation.”

When it comes to wetlands, no one can agree on what constitutes “just compensation.”

The investors at the Huntington marsh say it is worth $1 million an acre, while the State Coastal Conservancy, an arm of state government that has a longstanding offer to buy it, says its value is closer to $20,000 an acre. The owners paid $31 million--or $465,000 per acre, according to county property tax records.

“There’s a hundredfold difference over what we usually pay and what the owners think it’s worth,” said Reed Holderman, resource enhancement manager of the State Coastal Conservancy. “We’re nowhere close.”

The true value of the Huntington site probably lies somewhere in between, said Jeff Kauttu, a staff appraiser at Donahue & Co. in Newport Beach who has appraised several wetland parcels in Southern California.

If there were no laws limiting their use, coastal lots would be worth $1 million an acre, but the environmental restrictions lower their worth to as little as $20,000 an acre in some cases, $120,000 in others, Kauttu said. He said that between $80,000 and $100,000 is emerging as the fair value of an acre of salt marsh in Huntington Beach and Newport Beach.