Treasure Island Is Awash in Uncertainty : Housing: Owners of the mobile home park want to redevelop the land. Tenants are fearful, and Laguna Beach is intent on preserving the ocean-front community.

LAGUNA BEACH —  As she watched a hummingbird snatch a spider from a web on her small balcony, the retired schoolteacher spoke of the simple pleasures of living on the beach. Often, Dorothy Baker said, she can look across the ocean and see Santa Catalina Island from her mobile home window, and on even clearer days, she can spot San Clemente Island.

But beneath the tranquil setting brews a storm.

“It’s very scary,” the 77-year-old woman said, referring to plans by the landowners to eventually move out the residents and redevelop the prime piece of real estate--one of the last underdeveloped beachfront properties in Orange County.

Her husband, John, added, “The only way they are going to get me out is if they carry me out.”

The Laguna Beach City Council, intent on preserving one of the city’s few low- to moderate-income neighborhoods, is considering an unusual proposal--condemning the property and forcing the owner, Treasure Island Associates, to sell the land to residents.

After a 3-2 council vote, city staffers were told last week to explore rent control for the city’s three mobile home parks and also find a way for the residents to buy the land their homes sit on, even if it means an unfriendly takeover by City Hall.

But Richard Hall, a general partner of the Treasure Island ownership group, said the council is falsely raising the hopes of tenants because the condemnation proposal is not legal and will never work.

“The city should not help people buy homes on the ocean,” Hall said after last week’s vote. “I think it’s really a waste of the city’s time.”

The condemnation proposal is the latest in a series of attempts by the council to protect the residents who own the mobile homes but pay rent to live on the property.

The council recently approved a “relocation” ordinance that requires trailer-park owners to pay the moving expenses and other fees to residents if the parks close. In addition to Treasure Island, the city’s other parks, Thurston and Laguna Terrace, were targeted in that ordinance.

On the rent-control issue, the city froze rents for six months in December, 1989, pending the development of a permanent ordinance. But the council sidestepped the issue last June when it reached a one-year agreement with park owners that allowed a 7% increase but froze rents for senior citizens.

With that truce scheduled to run out in two months and another 7% increase already announced at Treasure Island, leaders of the Treasure Island Resident Owners Assn. are aggressively pursuing further protection.

The 266-unit park, sitting on 27 acres in South Laguna, was purchased in 1989 by Hall, a Costa Mesa businessman, and Merrill Lynch Hubbard for $43 million. Since then, about 60 units have been purchased by the owners and several have been torn down.

Because of the owners’ stated intent to close the park and recover their investment through redevelopment, residents said that even if they wanted to sell their units and move out, they would not be able to get a fair price because no one wants to buy a home in the park and then be forced to leave.

“I can’t sell it,” Shirley Vinson, 62, a retired bank employee said while tending her garden of Birds of Paradise. “Nobody wants to buy in here because of the transition.”

Vinson is protected by the rent freeze for senior citizens, but if rents continue to increase for others, some say they will have no choice but to move out anyway.

Oliver Sprenger, a 61-year-old retired Los Angeles firefighter, lives five rows away from the beach. But if the proposed 7% rent hike takes effect, he said, his monthly payment of $1,230 will go up to $1,316. That does not include his payments on his coach or utility bills.

Although the city is considering a rent-control ordinance, residents said that will not alleviate their fears that some day soon, they will be forced to pull up stakes.

“What we want is to preserve the community,” he said. “We would like to have the security to know we are not going to be booted out.”

Association president K.P. Rice said if this neighborhood disappears, so does a large stock of the city’s affordable housing.

“This is the only kind of a place I can own,” he said. “I can’t buy a typical Laguna Beach house.”

Another resident, 42-year-old Cathleen Grubb, said that while the owners may argue it would not be fair to force them out, the residents feel they have an equal stake in the long-term future of the park.

“We are property owners too,” she said. “It’s not like a regular situation like an apartment, where you rent everything. We own everything that sits on top of the land and they own the land. It’s a two-owner situation.”

During the council debate last week, Councilman Robert F. Gentry spoke of the threatened park as though it were a vanishing species of Americana.

“We have a community, in this community, that’s being demolished,” Gentry said. “No one is doing anything illegally, but we are losing a community that’s a unique part of our community.”

The city, he said, should help residents find a way to buy the land or consider condemnation.

But Councilwoman Martha Collison spoke strongly against the condemnation proposal.

“You think the government should interfere and say, ‘This land is condemned now and you can come in and buy it?’ ” she asked Gentry. “When does government stop interfering? How much can the city buy?”

Planning Commission Chairman Norm Grossman, whose panel has studied the issue, said cries of “government interference” contradict the council’s normal philosophies, such as allowing the Design Review Board to dictate the colors or shapes of homes in the city.

“At the same time, these people have no problem with the government interfering to buy Laguna Canyon,” he said, referring to the city’s plans to buy open space from the Irvine Co. to prevent development.

Residents are hoping to meet later this month with the owners and offer to buy the land at a price that includes their initial investment, plus a small profit in the $2-million to $5-million range.

But Hall said it’s ludicrous for the residents to think they can join together to raise money for the purchase price, when they already complain about the rent.

“They are living cheap on the beaches of Laguna Beach,” the owner said. “They are just trying to create a windfall situation for themselves.”

When pressed to reveal a possible purchase price, Hall said, “I would think it would go for over $100 million.”

Hall becomes agitated when he hears claims by residents that senior citizens are going to be hurt the most if the park closes. He said one of their tentative plans calls for a condominium development for senior citizens.

“We were never going to kick the seniors off the property,” Hall said.