Driftwood developer could be out

Barbara Diamond

Delays in the approval of the proposed Driftwood Estates in South

Laguna may have cost the developer the project.

“My hope and goal is that I would be involved in the project as it

moves forward ... “ developer Steve Vliss said Tuesday. “But the

project is temporarily on hold.”

Vliss said the Esslinger Trust, which owns the parcel that he

proposed to develop, is evaluating its options and referred questions

to Ken Cummins, who represents the trust.

Cummins declined to comment on the project.

“Call me in a month,” Cummins said. “But I will say I have the

utmost confidence in Steve Vliss. He is a guy I have strived to work

with because of his integrity. He has gone the extra mile to create a

project that appeals to the city and is still financially feasible.”

The extra mile took years.

“I have spent almost four years getting my project approved by the

city,” Vliss said. “It would be a reasonable conclusion that it would

already have been underway if the council had approved the project

when it was recommended by the Planning Commission.”

It’s been nearly a year since the City Council reviewed the

commission’s favorable recommendation for a 15-lot project on 10

acres of the 228.5-acre parcel that overlooks the long-established

Driftwood Drive residential neighborhood, Aliso Creek Shopping Center

and Montage Resort. The remainder of the property was promised as

open space.

Neighboring property owners, sympathizers and representatives of

environmental groups were among the 31 speakers who testified at the

meeting in opposition to the project. They cited the project’s large

homes as incompatible with the neighborhood of modestly sized

residences, increased traffic on already busy neighborhood streets

and the general upheaval of construction on both the land and the

neighbors.

Loretta Drive resident Debra Morris was the only speaker that

night, other than project architect Morris Skenderian, who supported

the project outright.

“We have acres and acres behind us,” Morris said. “We thought it

was the greenbelt. Imagine our surprise to learn it was privately

owned.

“All of us in Porto Fino are thrilled that the land is being

donated [as open space] by the developer.”

After 2 1/2 hours of testimony and discussion, Councilman Steve

Dicterow volunteered to facilitate a dialogue between the project

opponents and Vliss, who offered that night to reduce the number of

lots to 13. The original proposal, two years earlier, was for 19

lots.

Dicterow brought back to the council about nine months later a

proposal for an 11-lot project, still vehemently opposed by the

neighbors, but approved by the council at the Oct. 21 meeting.

“When this came out of Planning Commission, it looked like a

win-win project all around,” Commissioner Anne Johnson said. “It was

a modest development for the size of the parcel, with improved

hydrology and 218 acres of open space dedicated to the city.

“The commission had held more than 10 public hearings and made two

commission trips to the site as well as countless individual trips

with the architect, environmentalists and neighbors both for and

against the project.”

Neighbor Penny Elia, a leader of the opposition, was the first to

make the suspended negotiations between the developer and the

property owner public.

“I spoke to Steve [Vliss] on Friday to ask permission to go on the

property,” Elia said. “He said I was talking to the wrong person,

that he had withdrawn from the project.

“It is my understanding that the option was up on Oct. 31, 10 days

after the approval by council,” Elia said. “Steve said the Esslinger

Trust was shopping developers and I know Athens Group

[representatives] have been on the property.”

Skenderian said he had not had any inquiries about the

availability of the property from other developers, including Athens

Group.

“I am in almost daily contact with Montage, and they have not

asked one question about Driftwood,” Skenderian said.

Montage spokesman John Mansour was unavailable for comment.

Vliss’ hard-won city approvals could benefit the property owner or

another developer barring some contractual agreement with the owner.

The project must go to the California Coastal Commission for a

coastal development permit and an amendment to the local coastal

plan.

“That is a major hurdle,” Mayor Cheryl Kinsman said.

Councilwoman Toni Iseman, who voted against the project approved

by the council, sits on the commission.

“City approvals are good for two years, which means they have

almost 22 months to go, and the property owner can process the

coastal development permit itself, hire another developer, sell the

property to Vliss or to somebody else,” City Manager Ken Frank said.

“I have heard rumors -- and they are only rumors -- that the owner

may be putting the property on the market with the number of units

the council approved -- which is less than they wanted -- to see if

there are any other buyers out there,” he added.

Frank guessed that the trust would take action sometime within the

next six months to complete the Coastal Commission process.

Vliss declined to discuss how much the project had cost him to

date.

“Steve optioned the property at a certain price -- I don’t know

what that was -- and started to work on it based on a 20-lot

project,” Skenderian said. “You end up with an 11-lot project and you

reevaluate.

“The cost per lot is way higher than expected, so you go back to

the owner and ask to discuss price, because it’s not as profitable as

expected,” he said. “But the trust can’t just OK a reduced price. It

has to see if any other developers are interested at a better price.

“Steve has to decide if he wants to continue at the original price

or wait and see what happens,” Skenderian said.

Depending on who buys the property, if anyone, and what they

decide to do with it, the city could be the loser in terms of open

space.

“I think it would be a tremendous blow to the city to lose 218

acres of open space,” Kinsman said. “I doubt if we will ever receive

that kind of offer again.”