Posh Plans for Crystal Cove

A portion of Crystal Cove State Park could be transformed into a “boutique” resort with rentals averaging $225 a night and as many as three swimming pools under a plan that state officials are quietly negotiating with a private firm.

The $23-million resort would operate on public park land between Corona del Mar and Laguna Beach under a 55-year contract, the lengthiest parks concession contract in the state.

The state Department of Parks and Recreation refused last week to make public the resort proposal it selected 16 months ago. But in a 1994 report to the Legislature, park officials described the potential for a resort at Crystal Cove similar to the Inn at Ventana and Post Ranch Inn in Big Sur, two of the most exclusive lodgings on the Central California coast. Both hotels operate on private land.

Park officials last week confirmed that the Crystal Cove proposal calls for 60 to 90 units renting for $100 to $400 a night. That would be a major departure for a parks system better known for rustic campgrounds and picnic tables. The resort could yield $1 million a year for a financially strapped parks department intent on seeking private partnerships and new sources of funds.

The resort would be centered in the 12.3-acre Crystal Cove Historic District, known for its weather-beaten cottages built in the 1920s and 1930s. The bulk of those cottages would be renovated under the plan.

With its steep bluffs, tide pools and isolated beach, Crystal Cove is one of the most scenic coastal parks in Southern California. The picturesque beach colony is listed on the National Register of Historic Places as boasting the region’s “last intact examples of vernacular beach architecture.”

Although the state has made no secret of its plans to renovate and make the cottages available for overnight rentals, the scope of the project has remained under wraps. Parks officials appear to be “obsessed with secrecy” where the Crystal Cove plan is concerned, said one state source who spoke on the condition of anonymity.

Murray Rosenthal, chair of the California Sierra Club’s state parks committee, called the plan “totally inappropriate.” He quoted state law that rules out park improvements “which are attractions in themselves, or which are otherwise available to the public within a reasonable distance outside the park.”

He added: “I would say that a resort with swimming pools and other built-in features are attractions unto themselves.”

State parks spokesman Ken Colombini responded: “I don’t think the pool is going to be the destination. The destination is going to be the park, on the beach, with the bungalows.”

Jack Roggenbuck, parks district superintendent, said he knows from the number of calls he gets that there is a demand for the project. “We’re trying to provide another opportunity for a part of our client base that we don’t have at this time.”

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The state chose the proposal from Santa Barbara-based Investec over two others in April 1996 as part of a bidding process. In its request for proposals, the department stated they would be public records, except for portions marked as trade secrets, confidential or proprietary.

Nonetheless, the department refused last week to make the Investec proposal public. “Unlike most concession proposals, Investec’s proposal is a working document that does not accurately reflect the final contract the Department is now developing with the company,” Colombini wrote in response to a Public Records Act request from The Times. Releasing the proposal now, he wrote, “would, we believe, give the public an inaccurate presentation of the Department’s plans for the site.”

But a public records expert said documents are not normally withheld on the grounds that people might misunderstand them. “If their position is that they’re withholding the winning proposal because people might get the wrong idea . . . that simply is not good enough,” said Terry Francke, executive director of the California First Amendment Coalition.

The proposal and the contract, now in final negotiations, will be made public after the contract is signed, which could be in a few weeks, Colombini said. The public can inspect the plans and comment during the approval process, which must win approval from the state’s Park and Recreation and Coastal commissions, he said. Construction could start as early as December 1999.

The parks department provided some information about the project in response to written questions from The Times:

* The average overnight rate is forecast at $225, with 10% of the units available at a 50% discount. Details of the discount are still being worked out.

* Guests would stay in 60 to 90 units in existing bungalows and some new cottages, with the exact number of new structures being negotiated. Some units may have kitchens.

* A restaurant would seat 120, with the type and price of food to be determined.

* Up to three swimming pools would be allowed.

* A visitors and interpretive center might be built across Pacific Coast Highway in the 4.5-acre Los Trancos area.

* The project initially was to cost $14.8 million, but the price tag has risen to $23 million under the Investec proposal. The cost could decrease.

* Investec would pay the state 5% of its annual gross receipts for rent. The state anticipates a return of more than $60 million over the 55-year term of the contract, taking into account rent and the value of capital improvements.

Although most state park concession contracts run for 10 years or less, parks officials last summer received special permission from the Legislature to allow a lease as long as 60 years at Crystal Cove. The longer time period makes the project more attractive to developers, because it allows them more time to earn back their investment, Colombini said.

Currently, the two longest park concession contracts run for 40 years--one for a tobacco shop in San Diego’s Old Town historic park, the other for marine services at Lake Oroville.

Investec did not return repeated telephone calls last week and Monday. The firm is working with a firm called Resort Design Group, operating as Crystal Cove Preservation Partners, Colombini said. Resort Design Group is a San Francisco-based company that operates the Post Ranch Inn, among other properties.

The state bought the 2,791-acre Crystal Cove State Park from the Irvine Co. in 1979 for $32.6 million. Under the grant deed, the company has the right of first refusal on any concession proposal within the park lasting more than 10 years. The Irvine Co. will have 60 days to review the proposal once the contract is signed, Colombini said.

A spokesman for the Irvine Co., Franz Wisner, said his firm has not seen the proposal. The company wanted the review “to ensure that any development would be high quality,” Wisner said.

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In a 1994 report to the Legislature about the Crystal Cove Historic District, the Department of Parks and Recreation described the opportunities presented there.

Market research showed “that there is ample market support for a ‘boutique resort hotel’ at Crystal Cove,” the report said. “As evidenced by analogous operations in similar locations, such as Post Ranch Inn and the Inn at Ventana, those facilities literally generate their own markets and generate occupancies and average daily rates far in excess of the local norms.”

The Inn at Ventana offers 59 rooms and three cottages at rates of $215 to $495 a night. The Post Ranch Inn offers 30 luxury guest rooms and a variety of guest houses, charging $285 to $545 for single rooms.

Campers now pay $10 to $11 a night to stay in Crystal Cove’s three campgrounds, which are equipped with picnic tables and pit toilets. The resort would not affect the campgrounds.

Also contributing to this report was Times staff writer Marla Dickerson.

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Beach Park Proposal

California may grant a 55-year contract to develop 16.8 acres of Crystal Cove State Park. The project would include refurbishing bungalows that have dotted Crystal Cove’s beachfront hillside since the 1920s. Sixty to 90 units could rent for $100 to $400 per night. Here’s how the area is currently divided:

1. Entrance/Crystal Cove Hollow

2. South beach (bungalows)

3. North beach (bungalows)

4. Bluff top

5. Los Trancos

Other possible additions:

* 5,000-square-foot restaurant with seating for about 120

* As many as three swimming pools

* Visitor and interpretive center in 4.5-acre Los Trancos area

Source: California Department of Parks and Recreation

Researched by DEBORAH SCHOCH / Los Angeles Times

Longest Contracts

A 55-year concession between the state of California and a private firm would be the longest-running parks concession contract in the state. Here’s how it would compare with other lengthy concessions at California state parks:

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Location Business Years Crystal Cove Resort (proposed) 55 Old Town San Diego Tobacco and pipe shop 40 Lake Oroville Marina services 40 Millerton Lake Marina, restaurant 36+ Pfeiffer/Big Sur Lodge, store, restaurant 33+

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Source: California Department of Parks and Recreation; Researched by DEBORAH SCHOCH / Los Angeles Times