The California State Appeals Court decision forcing a left-wing billionaire to reopen Martins Beach south of Half Moon Bay extends new power to the California Coastal Commission along California’s 1,170 miles of coastline.
The dispute began in 2008 when Vinod Khosla, a co-founder of Sun Microsystems and former partner of top venture firm Kleiner Perkins, who Forbes estimates is worth $1.75 billion, bought an isolated 53-acre strip of the San Mateo Coast just south of Half Moon Bay called Martins Beach for $32.5 million.
The Deeney family that owned the land around Martins Beach for a century had a welcome sign on the corner of Highway 1 and Martins Beach Road. The family and its tenants charged a daily access fee to local smelt fishers, picnickers and surfers.
When Khosla’s property manager took control in 2008, he occasionally allowed fee access to the beach, but whitewashed over the welcome sign. That led to a 2009 letter from the County of San Mateo demanding daily beach access. The manager of Khosla’s property holding company, “Martins Beach LLC,” responded in 2010 by hiring guards and permanently locking the gate to end all public access the quarter-mile beach road.
The dispute bubbled for the next three years, until the non-profit Surfrider Foundation filed a Superior Court lawsuit against Khosla’s :Martins Beach LLC: on behalf of “The Friends of Martins Beach” for violating Article 10, Section 4 of the California Constitution: “No individual, partnership, or corporation, claiming or possessing the frontage or tidal lands of a harbor, bay … or other navigable water in this State, shall be permitted to exclude the right of way to such water…” Surfrider claimed that obstructing beach access required a coastal development permit, which Martins Beach neither sought nor obtained.
Judge Gerald Buchwald ruled in Khosla’s favor to close beach access in April 2014, based on recognition of original Spanish land grant patent, which the court found served as a quitclaim deed on the property, and thus prevented the state of California from asserting a new interest in public access at Martins Beach. During the trial, Khosla stated that he was not made aware when his property manager closed the Martins Beach access.
But San Mateo Superior Court Judge Barbara Mallach in September 2014 found that the California Coastal Act declared the basic goals of the state for the coastal zone are to maximize public access to the coast and maximize public recreational opportunities in the coastal zone that are consistent with constitutionally protected private property rights. She ruled Khosla’s closing beach access violated a long established “prescriptive easement.”
Khosla appealed to the San Francisco 1st District Court of Appeals and began negotiations with the state for public access. But Lt. Gov. Gavin Newsom, the leading 2018 Democrat candidate for California Governor and a Coastal Commission member, politicized the dispute and ended negotiations in December 2016 by demanding the State Lands Commission seize all but 4 acres of Khosla’s land through eminent domain.
As a member of the California Land’s Commission, Newsom asked for a “fair value” of the property under eminent domain. The Appraisal Section of the Land Management Division valued the land at between $4.3 and $5.6 million. Despite the hot real estate market and property improvements, fair value was set at $22.3 to $23.6 million.
The three-judge Appellate Court on August 10 unanimously upheld the lower court’s ruling opening access to the beach. The Appellate Court stated that Khosla must obtain a development permit from the California Coastal Commission to end public access.
The ruling would serve as a huge precedent favoring the Coastal Commission’s authority over beach access, but Khosla is expected to appeal to the California Supreme Court.