Investors Selling Aliso Creek Inn

Local resident and sports retailer Mark Christy is believed to lead in investor group buying Laguna Beach’s Aliso Creek Inn and Golf Course from its current owner, private investors that deep-sixed an ambitious plan to remake the flood-prone property into a high-end conference center and spa fringed by tee-close homes amid the recession in 2009.

Few details have yet to emerge about the pending transaction for the 85-acre hidden jewel at the mouth of Aliso Canyon, a water shed that supports environmentally threatened plants and animals and spills polluted urban runoff onto Aliso Beach, one of the county’s most popular beaches.

“We’re pleased that the potential buyer intends to continue to provide Laguna Beach with a resort and golf course that reflects the community’s values,” Joan Gladstone, a spokesman for the property’s owner, Aliso Creek Properties LLC, said last week. She declined to identify the potential buyer, saying details of the transaction are confidential.

The seller, Aliso Creek Properties LLC, is one of six hotels in the portfolio of Redwood City’s Ohana Real Estate Investors. Ohana oversees the investments of Pierre Omidyar, the founding chairman of the online auction site eBay. The other properties include Montage resorts in Laguna Beach, Beverly Hills and Deer Valley; Santa Barbara’s Bacara resort; a Laguna Beach Travelodge; and development projects in Sonoma County, Hawaii and Mexico. Omidyar is worth $8.2 billion as of September 2012, making him the 141st richest person in the world and 42nd richest U.S.  resident, according to Forbes magazine.

Christy, a real estate agent who also co-owns San Clemente-based Hobie Sports and its five surf shops, declined to comment directly.

Christy made informal inquiries about Aliso Creek in recent months, Laguna’s City Manager John Pietig confirmed.

One hotel expert suggested that a deal could only make economic sense if the current owners agreed to sell at a considerable loss.

The nine-hole golf course with 62 aging suites and a lodge used as an event center was acquired from the late Violet Brown for $17.6 million in 2004, according to Alan X. Reay, founder of Irvine-based Atlas Hospitality Group, a California hotel broker.

“They were buying it for its potential,” said Reay, who explained that recent deals for hotels with 18-hole courses in Rancho Bernardo and Fallbrook fetched about $50,000 a room, compared to the $277,000 a room paid by Aliso Creek Properties.

“People fall in love with real estate,” said Reay, adding that an unbranded hotel without a known operator must turn to private investors for financing rather than a traditional lender. Aliso Creek Inn’s dated suites need upgrades of $100,000 per unit, he figured.

“We hope that the new owner will feel as embraced by the community as we did during our ownership,” Gladstone said.

The inn and golf course was once the centerpiece of a larger redevelopment project that also included 240 hillside acres designated for open space, 13 acres off Driftwood Drive slated for estate-sized homes and a public access trail to county wilderness parks across the golf course. In 2005, such a project was projected to take five years to realize, but throw off $6.4 million in assorted tax revenue, compared to $890,000 at the time. The projection came at a town hall meeting from John Mansour, an executive of Athens Group, developer of the Montage resort.

After four years and millions paid to a score of consultants to prepare a draft environmental impact report, the project was formally withdrawn in December 2009, said the city’s planning manager, Ann Larson. “What they were proposing wasn’t allowed,” she said, and would have required local hearings over a coastal plan amendment and review by the California Coastal Commission.

While some of the studies could possibly be recertified by a new owner, the property’s bigger problem will be compliance with flood-zone requirements, she said.

The city’s ordinance allows improvements to a structure in a flood zone, but only up to 50 percent of its market value, she said.

A new owner presents an opportunity to environmentalists, working on restoring native habitat in Aliso Canyon.

“I’d like to see the new landowner embrace a more modest approach that reflects the extraordinary scenic and environmental resources of Aliso Canyon,” said Derek Ostensen, president of Laguna Canyon Foundation, which supports the Aliso Wood Wilderness Park that adjoins the golf course. “There are a number of great resorts/hotels that have taken this approach and it has been both successful business for the owner and a positive benefit for the community and environment.

“If that process is done in a manner consistent with Laguna’s aesthetic and environmental values, redevelopment could be a win-win for both the landowner and the community, “ he said. “The previous development proposal was very aggressive and involved extensive new condos and development far into Aliso Canyon.”