COASTAL CONSERVANCY. Staff Recommendation May 18, 2005 PIEDRAS BLANCAS ACCESS ACQUISITION. File No Project Managers: Janet Diehl/Steve Horn

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1 COASTAL CONSERVANCY Staff Recommendation May 18, 2005 PIEDRAS BLANCAS ACCESS ACQUISITION File No Project Managers: Janet Diehl/Steve Horn RECOMMENDED ACTIONS: (1) Authorization to disburse up to $100,000 to the Trust for Public Land for the management of public access to two sandy beaches and associated trails and parking area; and (2) authorization to enter into an option agreement with the Trust for Public Land, including disbursement of $90,000 as an option payment, for possible public acquisition of a parcel of approximately 20 acres located west of Highway 1 at Piedras Blancas, San Luis Obispo County. LOCATION: Between State Highway 1 and the ocean shoreline, approximately 6 miles north of W.R. Hearst State Beach (Exhibit 1) PROGRAM CATEGORY: Public Access Exhibit 1: Area Map EXHIBITS Exhibit 2: Aerial photograph depicting property lines Exhibit 3: Map showing Hearst Ranch transaction context Exhibit 4: Photographs of Site Exhibit 5: Letters of Support from December 2004 hearing Exhibit 6: Newspaper Articles concerning the project RESOLUTION AND FINDINGS: Staff recommends that the State Coastal Conservancy adopt the following resolution pursuant to Sections et seq. of the Public Resources Code: The State Coastal Conservancy hereby: (1) authorizes the disbursement of an amount not to exceed one hundred thousand dollars ($100,000) to the Trust for Public Land ( TPL ) for management and operation of public access to and along the ocean shoreline, on a property of 20-plus acres (San Luis Obispo County Assessor s Parcel Number ) that is currently improved with a motel, parking areas and associated structures

2 PIEDRAS BLANCAS ACCESS ACQUISITION and is more particularly described in Exhibits 1 and 2 attached to the accompanying staff recommendation (the Piedras Blancas property ); and (2) authorizes the Executive Officer of the Conservancy (the Executive Officer ) to enter into a purchase option agreement with TPL to secure the right of public purchase of the Piedras Blancas property, subject to the terms generally described in the accompanying staff recommendation, and further authorizes the disbursement of an option payment in an amount not to exceed ninety thousand dollars ($90,000) to TPL pursuant to those terms. Disbursement of these Conservancy funds is subject to the following conditions: 1. Prior to the disbursement of any funds for the operation and management of public access, TPL shall: a. Enter into an agreement with the Conservancy, pursuant to Public Resources Code Section 831.5, to provide nondiscriminatory public access on the property; b. Submit a work program, budget and schedule for the management and operation of the public access, for the approval of the Executive Officer; and c. Agree to acknowledge the Conservancy funding by erecting and maintaining signs on the property, the design and location of which has been reviewed and approved by the Executive Officer. 2. The option to purchase the Piedras Blancas property shall provide that during the term of the option TPL will remove specified structures from the property to the satisfaction of the Executive Officer, using the funds provided by the option payment in order to accomplish such removal. 3. The option shall provide that TPL will provide from private or public sources the funding needed to support public acquisition of the Piedras Blancas property, without recourse to the Conservancy for funding beyond that authorized by the Conservancy at its December 2004 meeting. 4. The option shall provide that the public purchase price will not exceed by more than five percent (5%) the sum of the price paid for the property by TPL and the actual transaction and holding costs expended by TPL as a result of the purchase. 5. The option shall provide that the Executive Officer shall approve all relevant acquisition documents, including the appraisal, agreements of purchase and sale, escrow instructions and documents of title necessary to the acquisition. 6. The option shall provide that purchase by the Conservancy or the California Department of Parks and Recreation will be subject to the approval of the State Public Works Board. Staff further recommends that the Conservancy adopt the following findings: Based on the accompanying staff report and attached exhibits, the State Coastal Conservancy hereby finds that: 2

3 PIEDRAS BLANCAS ACCESS ACQUISITION 1. The proposed project is consistent with the purposes and criteria set forth in Chapter 9 of Division 21 of the Public Resources Code (Sections to 31409) regarding coastal access. 2. The proposed project is consistent with the Project Selection Criteria and Guidelines adopted by the Conservancy on January 24, The proposed project will serve greater-than-local needs. 4. The Trust for Public Land is a nonprofit organization existing under Section 501(c)(3) of the United States Internal Revenue Code, with purposes consistent with Division 21 of the Public Resources Code. PROJECT SUMMARY: The Piedras Blancas site includes one-half mile of privately-owned oceanfront property located in the middle of the 13 linear miles of new State Park land that has been acquired from the Hearst Ranch in San Luis Obispo County. If the site is not acquired for public purposes, the 20 acres above the coastal bluffs will have a very high likelihood of being redeveloped privately as a destination resort taking advantage of the surrounding protected public land (Exhibits 1-4). The site has an existing motel structure and associated retail services, and it is designated in the certified San Luis Obispo Local Coastal Program for visitor commercial use. The two sandy beaches on the property are currently available for use only to patrons of the commercial facilities, as there is no convenient means for the public to access these beaches directly from Highway 1. A conservation purchase of this site would avoid the impacts of private development, and would have great potential for public access and recreational uses. With its existing parking lot and safe entry road from Highway 1, the site could provide immediate public access to the new State Park that will stretch for many miles on either side of it. Public acquisition could enable the completion of the California Coastal Trail (avoiding what would otherwise be a half-mile gap), and the public could gain permanent access to two substantial sandy beaches. Because the site is relatively level and is currently developed, it may be a more feasible location for any support facilities needed for DPR management of the Hearst Ranch acquisitions than would be other State Parks ownership that is both currently undeveloped and subject to conservation easement. To avert the immediate threat of private redevelopment and thus preserve the opportunity for getting this property into public ownership, the Trust for Public Land (TPL) has agreed to purchase the property for $4,500,000 using a short-term loan provided by The Packard Foundation. TPL has also committed to raising all of the funds needed to support a future public purchase, building on the $2,000,000 approved by the Coastal Conservancy in December In anticipation that the Piedras Blancas property would be incorporated into and managed together with the area acquired from the Hearst Ranch, State Parks staff has indicated a willingness to recommend a DPR contribution of $500,000 toward the purchase. TPL would seek private contributions and commitments from federal agencies to provide the rest of the purchase price. 3

4 PIEDRAS BLANCAS ACCESS ACQUISITION The Conservancy would support this effort in two ways: (1) by agreement with TPL on the structure of a future public purchase, to secure this opportunity and define the basic terms necessary prior to bringing it to the Public Works Board; and (2) with financial assistance to TPL to provide the services needed to manage public access to these beaches while the site is still in private ownership. Through an option agreement with TPL the Conservancy would assure that the public will have the right to buy the property, at a price that will not exceed Fair Market Value, once the precursor conditions are met. Through a grant agreement with TPL, the Conservancy would authorize funding from the Coastal Access Account to provide for immediate public recreational use of the shoreline while the public purchase is being developed. Committing its own financial and staff resources to the Piedras Blancas project represents a significant risk for the Trust for Public Land. Direct costs, including interest on the Packard Foundation loan, property taxes, liability insurance, etc., will be substantial, as will the commitment of TPL staff time that will be necessary in order to create the total funding package. In all, these TPL holding costs are likely to require a minimum out-ofpocket investment of $200,000-$300,000 prior to the time that any transfer to the public could be considered, with no certainty that these costs could be recovered. In addition to the holding costs, other investments will also be necessary in order to prepare the property for possible transfer to a public agency. Two potential physical risk factors exist on the property: a structure that is near the bluff edge and may be threatened by on-going processes of erosion; and a gasoline service facility that includes underground storage tanks. While neither of these existing structures is believed to represent a major environmental hazard, it would be desirable to remediate each of them prior to the transfer of title to the public. The cost of contractor services for remediation of the two sites is estimated to be a total of $60,000-$80,000, not including staff costs to TPL for organizing and managing this clean-up. Through the proposed option agreement, TPL and the Conservancy would establish terms of a purchase transaction that would facilitate the necessary site clean-up as well as enable TPL to recoup its out-of-pocket costs in a future sale to the public. By so doing, both TPL and the State would obtain a greater certainty of a successful future project, reducing the risk to each. The State would obtain the certainty that it could purchase the property within a known price range, even if that price is below the fair market value as established by an updated appraisal. The State will also be able to direct the use of its option payment, ensuring that TPL will invest these funds in the needed site clean-up. The purchase price would also include a 5% cap on the transactional return to TPL, which value must be supported by an acceptable appraisal. The option agreement would also provide for a return of the State s option payment in the event that a future sale back into the private market (if the public sale is not completed) exceeds the amount of the negotiated sale price under the option agreement. During the period that TPL owns the property, the public will be permitted to access the shoreline under the same conditions that currently govern the private commercial access. Minimal improvements would be required - - limited to directional signing and fencing to channel vehicles and foot traffic away from sensitive areas - - because the existing parking area and existing dirt trails would continue to be used. 4

5 PIEDRAS BLANCAS ACCESS ACQUISITION Site Description: The Piedras Blancas property lies almost exactly in the middle of the 13 miles of scenic coastline recently acquired by the State from the Hearst Ranch. On the Conservation Transaction Overview Map (Exhibit 3), it is the sole white space along the coast north of the Piedras Blancas Lighthouse and south of Point Sierra Nevada. The entrance to Hearst Castle State Historic Monument, which attracts about a million visitors per year, is approximately seven miles south. Two sandy beaches form the northern and southern ends of the site. Between the beaches, a steep, low bluff fronts a generally rocky shoreline, with a relatively flat terrace above that extends east to State Highway 1. The open character affords views of Big Sur to the north, Piedras Blancas Lighthouse to the south and the rolling hills of the Hearst Ranch across the highway. Improvements to the property include a 14-unit motel and attached coffee shop built during the 1950s, a recently-upgraded self-serve gas station, and a caretaker s home with a garage and storage building. Introduced landscaping includes extensive iceplant along the bluff edge, non-native grasses and a few trees, although a substantial area is dirt and gravel used as a parking lot for motel patrons and recreational vehicles. There are three water wells on the property and two water storage tanks that supply service to the site. The property is entirely within the coastal zone and is zoned for visitor recreation in the certified San Luis Obispo County Local Coastal Program. This designation permits the existing commercial uses, with the potential to expand development coverage up to 40% of the total area of the site. A Phase I Environmental Assessment obtained by the American Land Conservancy in September 2004 indicates that a previous set of underground gasoline storage tanks were removed from the property in 1999 and apparently had not leaked; these were replaced at that time with more modern storage tanks. The Trust for Public Land has conducted additional environmental assessment of the site during the past two months, and those studies will continue. None of the reports to date have concluded that there are any substantial hazardous environmental conditions known to exist on the property, although testing within the structures has not been completed. Erosion is an issue here. A geotechnical report commissioned in 2001 concluded that a coastal bluff retreat rate of approximately 2.8 to 4.3 feet per year is occurring at the northern end of the site, and the bluff edge is now within ten feet of one of the motel structures. Given these retreat rates, the 2001 report considered portions of the present motel structure threatened and recommended rock revetment or other protective measures. Pursuant to Public Resources Code Section 30235, a private landowner would be likely to obtain permission under the Coastal Act for a program of shoreline armoring to protect the part of the motel that is threatened by erosion. Immediately north of the Piedras Blancas property, on land previously part of the Hearst Ranch and now owned by State Parks, Caltrans has already installed rip-rap armoring to avoid erosion that might undermine State Highway 1. Erosion also threatens the dirt path leading to the northern sandy beach area, and safety considerations may make it necessary to limit public use of this pathway while a long-term, safe alternative is designed. 5

6 PIEDRAS BLANCAS ACCESS ACQUISITION Project History: The American Land Conservancy ( ALC ) initiated negotiations for the purchase of the Piedras Blancas property as an adjunct to its efforts to secure permanent protection for the Hearst Ranch, because of the strategic location of the subject site and the potential for private redevelopment contrary to the purposes of the Hearst Ranch Conservation Transaction. However, ALC was not able to complete the purchase even after the Conservancy (in December 2004) had authorized a grant for a portion of the purchase cost, in substantial part because of the financial risk factors discussed above. In early 2005 Conservancy staff requested assistance from the Trust for Public Land to try to craft a feasible conservation transaction for this property, and TPL was successful in reaching agreement with the landowner. In an ironic twist, the public attention generated by the Conservancy grant approval attracted private developer interest in purchasing the property and made the task more difficult for TPL. TPL staff has been working hard to secure this property, and has obtained the approval of the Packard Foundation for a three-year loan at a low interest rate. On April 21, the transaction was authorized by the TPL Board in the expectation that the Conservancy would also authorize State assistance as currently recommended. Because of the competition from private purchase offers, there is only a narrow window for a conservation transaction, and TPL may be required to close escrow on the purchase prior to the Conservancy Board meeting. The TPL transaction would rely on the prior grant of funds that was approved by the Conservancy in December 2004 as a portion of the future purchase price for a public acquisition; that authorization included the requirement that the nonprofit purchase take place by June 30, 2005, and TPL intends to comply with that requirement. PROJECT FINANCING: 1) State Purchase Option Payment $ 90,000 2) Grant for Immediate Public Access 100,000 Total: $190,000 Prior Authorization (December 2004): $2,000,000 as a grant to the American Land Conservancy for land acquisition. It is anticipated that TPL will be substituted as the grantee for these funds in accordance with the SCC authorization. The anticipated sources of Conservancy funds for the current recommendation are: $100,000 from the Coastal Access Account to provide for the public access operations and management services. Pursuant to Public Resources Code Section 30620(c)(2), the Coastal Access Account may be used for grants to nonprofit organizations for the development, maintenance and operation of new or existing facilities that provide public access to the shoreline. 6

7 PIEDRAS BLANCAS ACCESS ACQUISITION $90,000 from the California Safe Neighborhood Parks, Clean Water, Air and Coastal Protection Bond Act of 2000 (Proposition 12) for the purchase option payment, from funds appropriated for completion of the California Coastal Trail. Under Proposition 12, these funds may be used for the acquisition and protection of land and water resources. CONSISTENCY WITH CONSERVANCY'S ENABLING LEGISLATION: The Conservancy s contribution would be provided under Chapter 9 of the Conservancy s enabling legislation, Sections through of Division 21 of the Public Resources Code, regarding public access to the shoreline. Public Resources Code Section states the Legislature s intent that the Conservancy take the principal role in the implementation of a system of public accessways to and along the state s coastline. Consistent with this section, the Conservancy will seek to facilitate the acquisition of an important bluff-top property that would provide the public with access to two beaches currently in private ownership, and the Conservancy will provide funds to enable the public to use this site immediately. The Conservancy is authorized by Public Resources Code ( PRC ) Section to acquire fee title to property in order to assure that an adequate system of public accessways is provided, and PRC Section authorizes the Conservancy to enter into an option agreement for the purchase of land for access purposes. PRC Section authorizes the Conservancy to award grants to nonprofit organizations to develop, operate and manage lands for public access purposes, where the accessway would serve greater-than-local public needs. Consistent with PRC Section , the amount of funding proposed has been reviewed by Conservancy staff in light of the total amount of funding available for coastal public accessway projects, the fiscal resources of the applicant, and the relative urgency of the project. CONSISTENCY WITH CONSERVANCY'S STRATEGIC PLAN GOAL(S) & OBJECTIVE(S): Consistent with Goal 1, Objective D, the proposed acquisition would secure approximately one-half mile of new Coastal Trail right-of-way. Consistent with Goal 2, Objective B, the proposed acquisition would provide permanent public access to an area that is currently available only for private commercial use. Consistent with Goal 4, Objective A, 20 acres of scenic coastal bluff lands would be acquired. 7

8 PIEDRAS BLANCAS ACCESS ACQUISITION CONSISTENCY WITH CONSERVANCY'S PROJECT SELECTION CRITERIA & GUIDELINES: The proposed project is consistent with the Conservancy's Project Selection Criteria and Guidelines adopted January 24, 2001, in the following respects: Required Criteria 1. Promotion of the Conservancy s statutory programs and purposes: See the Consistency with Conservancy s Enabling Legislation section above. 2. Consistency with purposes of the funding source: See the Project Financing section above. 3. Support of the public: As indicated at the December 2004 Conservancy hearing regarding the grant to ALC, purchase of this property for public recreation had widespread support, including that of then-state Senator (now State Controller) Bruce McPherson, then-assemblyman (now Senator) Abel Maldonado, current San Luis Obispo County Supervisor Shirley Bianchi, and several local environmental and recreation organizations. Letters of support associated with the December 2004 action are attached as Exhibit Location: The proposed project is entirely within the Coastal Zone. 5. Need: The Trust for Public Land will solicit all of the funding needed to enable a public acquisition of the property, relying on the Conservancy for the funding previously authorized. The public acquisition will not happen without this collaborative effort by the Conservancy and TPL. 6. Greater-than-local interest: Approximately four million travelers annually pass through this segment of Highway 1, which has been designated as a State Scenic Highway and a federal All-American Road. With its easy access from Highway 1, this property would make an ideal beach stop for those millions of travelers. Nearby Hearst Castle is one of the most heavily visited California state parks. Additional Criteria 7. Urgency: The property is being actively marketed for private sale, and has been under a private purchase option as recently as two months ago. Unless the Trust for Public Land is able to intervene and secure the property, it will certainly be sold for private commercial and/or residential development and the opportunity for public recreation will be lost. The recommended Conservancy action would ensure that the public will have a feasible opportunity to acquire the property as a logical addition to the Hearst Ranch Conservation Transaction. 9. Leverage: See the Project Financing section above. 12. Readiness: The proposed acquisition must be completed immediately by TPL to avert the threat of sale to a private developer. The proposed option agreement will provide a framework for a step-by-step readying of the property for consideration by the Public Works Board. The recommended Conservancy support would enable the beach areas to be open to the public this summer. 8

9 PIEDRAS BLANCAS ACCESS ACQUISITION 15. Cooperation: This transaction would be an example of cooperation among a private nonprofit organization, private contributors and the State and federal governments. CONSISTENCY WITH THE LOCAL COASTAL PLAN: The proposed acquisition for public access purposes is consistent with the San Luis Obispo County Local Coastal Plan, certified by the California Coastal Commission February 25, The LCP designates this property for Visitor-Serving Recreation. Permitted uses under Recreation Standard 25 of the LCP include coastal accessways. COMPLIANCE WITH CEQA: The recommended action has two components, each of which is exempt from further review under the California Environmental Quality Act ( CEQA ). The purchase option agreement creates no legal requirement for any further action by the Conservancy and consequently could not result in any impact on the environment, however, it may lead to the public acquisition of the Piedras Blancas property; such acquisition, if it occurred, would be categorically exempt under CEQA pursuant to 14 Cal. Code of Regulations Section 15325, as a transfer of ownership of land for park and open space purposes. The grant of funds for operation of a public access facility would be categorically exempt under CEQA pursuant to 14 Cal. Code of Regulations Section as the continued operation of an existing facility for public gatherings. The commercial beach access has been in operation for at least twenty years and the existing parking areas and pathways have been designed to support this use; the public access operation by TPL will require minimal changes in the operation of the facility and would produce negligible change in current environmental conditions. Although the project site is located in a sensitive area, there is no reasonable possibility that either of these activities will produce a significant effect on the environment. Upon approval, staff will file a Notice of Exemption for the proposed project. 9

10 Exhibit 1: Area Map Piedras Blancas Motel Property

11

12 Exhibit 3: Map showing Hearst Ranch transaction context

13 Exhibit 4: Photographs of Site Piedras Blancas Motel & Surrounding Property Aerial view of property with Hearst Ranch in the background. Looking north up the coast. Major restoration opportunities. Coastal erosion, north end of property.

14 Exhibit 4: Photographs of Site Piedras Blancas Motel Front of retail area and hotel with gas pumps. Sign indicating private beach access only. Back of hotel. Side unit erosion threat. Erosion, looking north. Back of side unit, erosion.

15 STANDING COMMITTEES OF THE SENATE PUBLIC SAFETY, CHAIR EDUCATION, VICE CHAIR ENVIRONMENTAL QUALITY, VICE CHAIR APPROPRIATIONS BUDGET AND FISCAL REVIEW SUBCOMMITTEES SUBCOMMITTEE ON CRIMINAL PROCEDURE, CHAIR BUDGET AND FISCAL REVIEW SUBCOMMITTEE NO.2 SUBCOMMITTEE ON HIGHER EDUCATION November 12,2004 Exhibit 5: Letters of Support from December 2004 hearing SENATOR BRUCE McPHERSON FIFTEENTH SENATORIAL DISTRICT CHAIRMAN SENATE COMMITTEE ON PUBLIC SAFETY JOINT COMMITTEES JOINT COMMITTEE ON THE ARTS JOINT COMMITTEE TO DEVELOP A MASTER PLAN FOR EDUCATION JOINT COMMITTEE ON FISHERIES AND AQUACULTURE JOINT COMMITTEE ON PRISON CONSTRUCTION AND OPERATIONS SELECT COMMITTEES OF THE SENATE BAY AREA INFRASTRUCTURE BAY AREA TRANSPORTATION CALIFORNIA'S WINE INDUSTRY COLLEGE AND UNIVERSITY ADMISSIONS AND OUTREACH ECONOMIC GOVERNMENT DEVELOPMENT FORESTRY OVERSIGHT INTERNATIONAL TRADE POLICY AND STATE LEGISLATION SCHOOL SAFETY TECHNOLOGICAL CRIME AND THE CONSUMER Doug Bosco, Chair State Coastal Conservancy 1330 Broadway, 11thFloor Oakland, CA 946 i 2 Dear Chairman Bosco: I am writing to convey my strong support for American Land Conservancy's project to acquire the Piedras Blancas Motel property in San Luis Obispo County for public benefit. This property is the last unprotected private in-holding west of Highway One along the 18- mile coastline of the Hearst Ranch. This acquisition is an incredible opportunity to complete the protection of the entire Hearst Ranch coastline. \\'hen the Hearst Ranch conservation project is completed, the 20-acre motel property will be the only property not protected trom further development. Given that significant coverage rights exist and arc underutilizcd, there is a significant risk that the landowner will sell the property to a developer who will expand the motel facilities on the property. Moreover, the motel does not allow public access to the two sandy beaches along the property, making these beaches an exception along the 18-mile coastline of the Hearst Ranch. Finally, at several points along the coast, the property is under heavy erosion pressure. Acquisition of the property will avoid future shoreline armoring to protect existing structures and will allow for appropriate re-use of structures not threatened by erosion for public use. If acquired, much of the existing deveiopment can be removed, thereby permitting restoration of natural habitat and the scenic enhancement of this gorgeous stretch of Califomi a's central coast. Your action to help acquire this important property will safeguard the $95,000,000 state and federal investment in the protection of the Hearst Ranch and enhance public access in the area. Sincerely, ~~(~ Senator Bruce McPherson SACRAMENTOOFFICE STATE CAPITOL, ROOM 2054 SACRAMENTO, CA (916) FAX: (916) DISTRICTOFFICE 701 OCEAN STREET, ROOM 318-A SANTA CRUZ, CA (831) FAX: (831) DISTRICTOFFICE 25 SAN JUAN GRADE ROAD # 150 SALINAS, CA (831) FAX: (831)

16 Exhibit 5: Letters of Support from December 2004 hearing BOARD OF SUPERVISORS COUNTY GOVERNMENT CENTER, Room 370 SAN LUIS OBISPO, CALIFORNIA November 30, 2004 Doug Bosco, Chair State Coastal Conservancy 1330 Broadway, 11thFloor Oakland. CA SHIRLEY BIANCHI SUPERVISOR DISTRICT TWO Re: Piedras Blancas Motel Acauisition Dear Chairman Bosco and Honorable Board Members: I am writing to convey my strong support for American Land Conservancy's project to acquire the Piedras BIancas Motel property in San Luis Obispo County for public benefit. This property is the last unprotected private in-holding west of Highway One along the I8-mile coastline of the Hearst Ranch. This acquisition is an incredible opportunity to complete the protection of the entire Hearst Ranch coastline. When the Hearst Ranch conservation project is completed, the 20-acre motel property will be the only property not protected trom further development. Given that significant coverage rights exist and are underutilized, there is a significant risk that the landowner will sell the property to a developer who will expand the motel facilities on the property. Moreover, the motel does not allow public access to the two sandy beaches along the property, making these beaches an exception along the 18-mile coastline of the Hearst Ranch. Finally, at several points along the coast, the property is under heavy erosion pressure. Acquisition of the property will avoid future shoreline armoring to protect existing structures and will allow for appropriate re-use of structures not threatened by erosion for public use. If acquired, much of the existing development can be removed, thereby permitting restoration of natural habitat and the scenic enhancement of this gorgeous stretch of Califomia's central coast. Your action to help acquire this important property will safeguard the $95,000,000 state and federal investment in the protection of the Hearst Ranch and enhance public access in the area. Thank you for your support. Sinc~lp ~ # ~4'A }cn~c4c SHIRLEY;~CHI Supervisor, District Two RECEIVED DEC COASTALCONSERVANCY OAKLAND,CALIF.

17 Exhibit 5: Letters of Support from December 2004 hearing SIERRA CLUB FOUNDED 1892 Santa Lucia Chapter P.O. Box San Luis Obispo, CA (805) ~ovember30,2004 DougBosco,Chair State Coastal Conservancy 1330 Broadway, 11thFloor Oakland, CA Re: Piedras Blancas Motel Acquisition Dear Chairman Bosco and Honorable Board Members: The Santa Lucia Chapter of the Sierra Club strongly supports the acquisition and restoration of the Piedras Blancas Motel property in San Luis Obispo County for the benefit of the public and the protection of public-trust resources. The grant of state funds to the American Land Conservancy's project to acquire this property should be conditioned as follows: ~o future shoreline armoring permitted Public access allowed to the two sandy beaches along the property The majority of the existing development (coffee shop, gas station) to be removed; motel to be retained for low-cost overnight visitor serving use until such time as shoreline erosion makes it untenable, at which time it shall be removed and the site restored to its natural conditions Passive recreation only, considering sensitive terrestrial habitat. Please take these actions in order to allow for the appropriate adaptation to public use of structures not threatened by erosion, the restoration of natural habitat and the protection of California's central coast. Sincerely Yours, Tarren Collins, Chair Santa Lucia Chapter of the Sierra Club RECEIVED DEC0 3 Z004 GOASTALCONSERVANOY OAKLAND.CALiF.

18 Exhibit 5: Letters of Support from December 2004 hearing STATE OF CALIFORNIA - THE RESOURCES AGENCY ARNOLD SCHWARZENEGGER, Governor CALIFORNIA COASTAL COMMISSION CENTRAL COAST DISTRICT OFFICE 725 FRONT STREET. SUITE 300 SANTA CRUZ. CA PHONE: (831) FAX: (831) December 1, 2004 California Coastal Conservancy 1330 Broadway, 11th Floor Oakland, CA Subject: Letter of Support-Piedras Blancas Resort Acquisition Project (Agenda Item #17) Dear Chairman Bosco and Members of the Board: The purpose of this letter is to express our support for the subject Piedras Blancas Resort Acquisition Project, listed on the agenda for your meeting of December 2,2004. The project has great potential to both enhance and protect the significant scenic resources of the North Coast of San Luis Obispo, and provide increased public access to this tremendous stretch of coast. One of California's greatest treasures is the scenic corridor along the north coast of San Luis Obispo County. Here, the shoreline drive on State Highway Route 1 unfolds a particularly appealing succession of rocky shorelines, undeveloped beaches, headlands, lagoons, offshore rocks, wide open coastal terrace grasslands and distant vistas to the Big Sur Coast, looming ahead. For a distance of more than 13 miles, the seaward vista is virtually free of substantial manmade structures; public views are punctuated only by the existing structures on the project site and at the nearby Piedras Blancas Lighthouse Reservation (now managed by BLM). The special value of this corridor is recognized through designation as a State Scenic Highway, as a National Scenic Byway, and by the certified San Luis Obispo County Local Coastal Program (LCP) as a highly scenic area. The highway vista points immediately south of Piedras Blancas Point are the only place where visitors can drive right up to seasonal breeding colonies of the Northern elephant seal-an extraordinary, primordial spectacle and a key opportunity for visitors to learn about the adjacent ocean waters within the Monterey Bay National Marine Sanctuary. And, the gentle coastal terrace seaward of the highway provides the obvious and ideal alignment for the California Coastal Trail. Acquisition: what does the LCP provide? The LCP's North Coast Area Plan (NCAP) highlights a combining designation program for the Public Acquisition of Piedras Blancas Point. It states: "The State Dept. of Parks and Recreation or other appropriate agency"shouldacquire the Piedras Blancas Point and Lighthouse for public access. The state should investigate the development of a small-scale hostel using the existing buildings. Improvements should include: a) A small parking area adjacent to the southern cove; b) Interpretive signs and coastal access signs on Highway." (NCAP p. 7-4) PBlancas.ltr of support doc

19 Exhibit 5: Letters of Support from December 2004 hearing State Coastal Conservancy Piedras Blancas Acq. Project Dec. 1,2004 Page 2 The federal Bureau of Land Management (BLM) has in fact acquired the former Lighthouse Reservation on Piedras Blancas Point, and is actively pursuing plans to restore the historic lighthouse and provide for some level of public visitation. However, we understand that certain on-site limitations may have been discovered, and access rights across intervening Hearst property have yet to be fully clarified. While the LCP is silent regarding acquisition of the nearby Piedras Blancas Motel (Resort) property, it is apparent that the project site has potential usefulness as a staging area and as a site for other visitor support functions that may not be feasibly provided at the lighthouse itself. For example, the southwest comer of the site-an area that appears to be comprised of more resistant coastal bluff materials--borders the very delightful Arroyo del Corral Beach and has a direct connection to the highway, i.e., no intervening Hearst land. The seabird colony on the odd islet named Harlech Castle Rock is seen directly offshore. Existing Monterey cypress trees could provide a measure of visual screening at this exposed site. Therefore, this could potentially be a highly desirable location for interpretation, CCT/Lighthouse tour staging, hostel, environmental camping and other recreational support purposes over the long run. If these uses prove to be feasible, this would provide options for implementing or supplementing the LCP's vision for Piedras Blancas. Regulatory considerations and limitations. The LCP provides significant protection for coastal resources at this site. For example, the NCAP specifies a height limit of 15 feet for new additions on this property. The SLO County LCP also requires that new development in this area be sited to minimize its visibility from public view corridors, such as Highway 1, and that structures be designed to be subordinate to, and blend with, the rural character of the area. But, it also allows up to a 40% of the site to be developed. Of course, this is a maximum allowance and any new development on the site would necessarily be evaluated against the high visual resource protection standards of the LCP. Both commercial visitor serving and residential development are potentially allowable. Preservation of scenic values through acquisition would therefore represent the preferred alternate scenario. Any preservation project should also be designed to clearly allow for necessary and appropriate public access support facilities such as restrooms, interpretation, etc., needed to make the scenic setting available for public use and enjoyment. Of course, the amount and location of future uses will be constrained by the need to provide long-term setbacks from the rapidly eroding shoreline at the north end of the property. The Coastal Act does not support shoreline protection works for new development, and Caltrans will remove the existing rock revetment to the north of the existing motel when Highway 1 is realigned. Accordingly, acquisition for public use should be predicated on geotechnical investigation to determine how much, if any, of the property will remain over the long run, and whether planned retreat is an option. Other important considerations that should be taken into account when acquisition is contemplated are the potential presence of environmentally sensitive plant habitats, the difficulty of handling larger effluent volumes in septic systems, and the question of water supply adequacy.

20 Exhibit 5: Letters of Support from December 2004 hearing State Coastal Conservancy Piedras Blancas Acq. Project Dec. 1,2004 Page 3 These factors will influence both the location and potential intensity of any future use of the property, whether public or private. Conclusion. We believe the public interest will be best served by pennanently preserving and restoring the spectacular scenic qualities of this shoreline. Adverse commercial or residential development on the project site would greatly prejudice this desirable goal. Public ownership represents an opportunity to accomplish scenic restoration goals, to achieve pennanent scenic resource protection, and to secure meaningful public access. Because the incentive to maximize development potential is removed, public stewardship can help to insure that access support facilities are provided in a way that is appropriately scaled and subordinate to the character of the landscape. Accordingly, with the previously-stated qualifications in mind, we support the Piedras Blancas Resort Acquisition Project. --- Sincerely, ~:f. Charles Lester Deputy Director California Coastal Commission RECEIVED nr:'~ l-ui. f'l cm.1sf.rvancy Unf'I.I,NJ, C~,i..IF.

21 Exhibit 6: Newspaper articles concerning the project Posted on Tue, Apr. 26, 2005 Non-profits rescue coast plan PACKARD FOUNDATION HELPS TRUST PURCHASE CENTRAL COAST EYESORE By Paul Rogers Mercury News It's not exactly the Ritz-Carlton or the Four Seasons. But state officials were elated Monday after learning that their efforts to purchase a 1950s-era motel on one of the most scenic sections of California's centrall;oast have been saved from collapse. The saviors: The David and Lucile Packard Foundation in Los Altos and a San Francisco environmental for Public Land. group, the Trust Hoping to put the finishing touches on the state's $95 million deal to preserve the rural character of the massive Hearst Ranch, the California Coastal Conservancy, a state agency based in Oakland, has spent months attempting to purchase the 14-room Piedras Blancas Motel. The motel -- a lone outpost of peeling paint, plastic flowers and a cat named Mr. Pee --is the only private development along 13 miles of Hearst oceanfront in northern San Luis Obispo County set to become a string of new state parks. The conservancy hoped to turn the motel, situated on 20 acres with half a mile of sandy beach, into a youth hostel. In December the agency committed $2 million in state parks bond funds to the purchase, with the understanding that another San Francisco environmental group, the American Land Conservancy, would complete the deal and raise $2.5 million toward the $4.5 million price. But the deal fell apart after the American Land Conservancy had difficulty raising the money in time. The Trust for Public Land, armed with a Packard Foundation loan, stepped in to help., 'We are thrilled," said Debra Geiler, director of central coast programs for the Trust for Public Land. "It is of the utmost importance. It is a missing piece on the coast." Private developers had been trying to acquire the motel from its owner, Stuart Sidney of San Bernardino. That would have limited public access, said Geiler. The trust will own the property for about 18 months, and plans to remove a gas station there and tear down several rooms undercut by beach erosion. Then the land will go to the state parks department, and will probably become a youth hostel, possibly with a campground or visitor center. said Dick Wayman, spokesman for the Coastal Conservancy. The motel property is surrounded on three sides by Hearst Ranch. Earlier this year, the Schwarzenegger administration paid the Hearst Corp., which publishes the San Francisco Chronicle and numerous magazines, $80 million in cash along with a $15 million tax credit. In exchange, Hearst gave the public 13 miles of shoreline for new state beaches and gave up most development rights to the 82,000-acre ranch --.a sprawling property three times the size of San Francisco. Hearst is limited to building 27 homes and a 100-room hotel. Contact Paul Rogers at progers@mercurynews.com or (408) : MercuryNews.com and wire service sources. An Rights Reserved

22 Piedras Blancas Resort is a step closer to second life Page 1 of2 Exhibit 6: Newspaper articles concerning the project SanLuisObispo.com Posted on Sun, Apr. 03, 2005 Piedras Blancas Resort is a step closer to second Nonprofit enters escrow on 20 acres near Hearst Ranch that could become a hostel Kathe Tanner The Tribune Those who want to prevent further commercial development of the last half-mile of privately owned oceanfront property between San Simeon and Ragged Point have another chance. A national nonprofit conservation organization says it has entered escrow on the 20-acre Piedras Blancas Resort, about 15 miles north of Cambria. Purchase of the 1950s motel, gas station, gift shop, overnight RVspot and coffee shop could lead to a publicly held overnight hostel or camping facility, a use prohibited on nearly all the coastal land given to the state in the Hearst Ranch conservation deal. life The Trust for Public Land says its deal could be complete sometime the hands of state parks department. An earlier plan for the resort from the American Land Conservancy deal by the end of January. in May. Plans call for the land to eventually end up in failed to come up with enough money to close the A subsequent escrow with a private developer also fell through. The roadside property is perched west of Highway 1 north of Piedras Blancas Lighthouse. State parks and Hearst own the adjacent land. 'Public-friendly' plan The deal would ensure more public access to a portion of the coastal strip, as well as two sandy beaches. The nonprofit would own the land for a year to 18 months with plans to open parts of it to the public as soon as possible, according to Trust spokeswoman Mary Manees. "We'll make public-friendly additions, like restrooms," Manees said. "We'll probably get rid of the gas station." She's not sure what the final plan for the land would include, but campsites are definitely in the mix. The closest publiclyowned campgrounds are at San Simeon State Beach about 12 miles to the south and a U.S. Forest Service campground at Plaskett Creek in BigSur about 23 miles to the north. Deed restrictions in the recent gift of 13 miles of coastal land by the Hearst Corp. to state parks bans overnight use of that strip by campers on all but a tiny chunk of the southernmost portion, part of the former Junge Ranch. Manees said the Trust plans to hand off the property to state parks, though state parks said the deal is far from done. "We have no funds at this time to buy or operate it, so it is a concept we are looking at and exploring," said Roy D. Stearns, deputy director for communications for state parks. Short term 4/4/2005

23 Piedras Blancas Resort is a step closer to second life Page 2 of2 Exhibit 6: Newspaper articles concerning the project The resort has been operated for more than 20 years by Valerie and Tim Burres of Cambria. It is owned by Stuart Sidney, father of Valerie Burres. The resort was advertised at $5,195,000 in March, but Manees declined to reveal the purchase price until the deal closes. The American Land Conservancy's price for the deal was $4.5 million. In December, the state Coastal Conservancy approved a $2 million grant toward the Piedras purchase. The Trust for Public Land is looking to get a loan to make up the difference, said Sam Schuch at, Coastal Conservancy executive director. "And we have to figure out how to help them pay it back," he said. "This would be a big deal when we pull it off." The Coastal Conservancy will help the Trust "show we have a plan to pay for operation and maintenance of that land," a requirement that must be fulfilled before state parks could take ownership. "The best way to do that is find someone to operate a revenue-generating facility there," Schuchat said. "The missing piece is an economic study and business plan, (including) how many visitors could you reasonably expect there and what would they be willing to pay." :c 2005 San Luis Obispo Tribuue and wire service sources. All Rights Reserved /4/2005