Rancor Washes Up on Montecito Shore

MONTECITO, Calif. —  By all accounts, folks at the Coral Casino Beach and Cabana Club used to get along famously.

For decades, they held charity galas and debutante balls. On lounge chairs arrayed around a super-size swimming pool, members tranquilly took the sun as young people posed atop an impossibly high diving platform.

But now -- well, what could be more appropriate for a beach club than a line in the sand?

On one side are supporters of the club’s owner, Ty Warner, who turned the achingly cute stuffed animals called Beanie Babies into what Forbes magazine estimates as the world’s 94th biggest fortune. Warner, who has bought six local resort properties since 1999 and will have spent $700 million before they’re all remodeled, would like to add a glass-encased rooftop restaurant to the club as part of its planned renovation.

On the other side are the club’s dissidents, who say the restaurant would spoil the 68-year-old building’s classic lines and allow more public access to a place they cherish as private. They also say that “Warner’s people” have turned their fellow members against them with threats of expulsion and a campaign of intimidation.

For five years, the battle has been joined in more than 100 often-acrimonious meetings among Warner’s staff, club members and local agencies.

On July 5, Santa Barbara County supervisors approved the plans. Several club members appealed to the California Coastal Commission, but its staff has recommended that the county’s decision stand. Opponents suggest that a lawsuit may be in the works.

Some residents say the level of venom has been unprecedented in Montecito, a refuge of the rich and very rich just east of Santa Barbara.

“There have been flagrant violations of civility all over the place,” said J’Amy Brown, president of the Montecito Assn., an influential group in the unincorporated community. She cited a planning commission meeting where Warner’s supporters “stormed around and yelled ‘You’re irrelevant!’ at commissioners.”

“It was just shy of them carrying pitchforks,” Brown said. “That’s very unusual for Montecito.”

Sitting in a club cabana overlooking the ocean, Warner aide Greg Rice didn’t hide his frustration at “a faction of elitists” stalling his boss’ plans.

To Rice, the key issue is the resistance of a few club members to the use of the planned high-end restaurant by outsiders -- guests from the Four Seasons Biltmore across the road, who might saunter over after a set of tennis or a caviar facial. Biltmore guests have always been allowed to use the club, but to what extent has been a matter of heated debate.

“It’s been surreal,” Rice said of the controversy. “We’ve spent $8 million in planning costs, and we haven’t even driven a nail.”

That’s not all bad to Cynthia Ziegler, one of the opposition’s leaders. Across town in a hillside home, she poked through 17 boxes crammed with correspondence, newsletters, consultants’ reports and treatises on Gardner Dailey, the club’s celebrated San Francisco architect.

Rice and other Warner functionaries have stifled dissent, she said, contending that “there’s a huge, silent group of members who have been driven underground.”

Ziegler said one couple told her they couldn’t support her out of fear that their children might not be accepted as members when they grew up. Others have backed away, she said, because they want to do business with Warner.

“He’s godlike rich,” she said. “People want the gold dust to fall on them.”

Intensely private, Warner has been far from the center of the storm. He seldom deals with the media and declined to be interviewed for this article. Ty Inc., his Illinois-based company, has an unlisted number.

Warner got into the hotel business six years ago after chatting with a stranger on a night flight from Honolulu to Chicago. His seatmate was Rice, a hotel broker at the time, who let Warner know that the Four Seasons Hotel New York was a good deal at $275 million.

Warner promptly bought it.

Soon he focused on Santa Barbara, a city he had long loved.

In short order, he acquired the regal Biltmore, a purchase that included the Coral Casino. He also snapped up the Montecito Country Club, where members are forbidden to wear denim on the premises, and the San Ysidro Ranch, a rustic retreat where John and Jackie Kennedy honeymooned in cottages that now run to $1,500 nightly.

In addition, he picked up two golf courses, the Sandpiper and Rancho San Marcos, and the shuttered Miramar hotel.

Despite Warner’s civic donations -- he gave $1.5 million to help start the Santa Barbara Museum of Natural History’s Ty Warner Sea Center -- some residents worried as he collected trophy resorts the way some folks collect Beanie Babies.

A few critics feared hardball tactics. They pointed to a federal judge in Chicago ruling that Warner had tampered with a witness by persuading him not to testify in a trademark trial. In February, the court ordered Ty Inc. to forfeit a $700,000 judgment in that case.

Even so, Warner’s detractors around Santa Barbara weren’t shy. When he proposed a big new spa next to the Biltmore, residents upset about traffic eventually forced him to drop the idea. When he spent $500,000 sprucing up a bike path outside the bluff-top mansion he is building, a critic objected that all the bougainvillea made it look “a little like Disneyland.”

But it was at the Coral Casino that the gloves really came off.

When Warner asked the club’s 600 members to vote on renovation options, tensions ran high. Rumors spread of a whopping increase in the club’s monthly $200 dues, even of Warner padlocking a club where the likes of Errol Flynn had cavorted, where gondolas once bobbed in the pool for a Venetian extravaganza.

The rumors turned out to be just that, although they were replaced with charges that the hotly contested election was rigged to go Warner’s way. Members, most of whom had paid initiation fees of $20,000 per household, split into camps, complete with websites and consultants.

Ziegler and three other members succeeded in getting the building declared a county landmark, requiring yet another level of governmental review for Warner’s plan. Shortly afterward, the four were put up before the club’s powerful members committee for expulsion.

“It was an intimidation tactic,” Ziegler said. “Everyone felt that this is what would happen to members who speak out.”

For Ziegler, the landmark designation was an important safeguard against “ill-advised alterations and additions” that would clutter the club’s streamlined design. But the renovation’s proponents argued that the restaurant would be seen only from the ocean, and that architect Dailey had planned a similar facility that went unbuilt.

The threat of expulsion ultimately fizzled, but, according to Ziegler and her allies, an ugly tone had been set and only got worse.

“In the last year, there’s been an orchestrated pummeling of opponents,” said financial consultant Gene Geller, adding that Warner’s team “systematically and in a conspiratorial way” tried to squelch debate.

Warner’s supporters were offered contracts limiting increases in their dues for 12 years. Opponents, on the other hand, received no deal.

In fact, the plan’s boosters placed opponents’ names on display in the lobby -- an “enemies list,” said Ziegler’s husband, Kevin Monaghan.

Doug Large, an attorney who headed the members committee, scoffed at the allusion to Nixon but called the opponents “arrogant and selfish.” The list was meant only to identify the remaining dissidents so that other members might reason with “these people who are frustrating the will of the majority,” he said.

By Large’s count, only 16 members remain opposed to Warner’s plan. “The real hostility isn’t from the Warner camp,” he said. “It’s from the majority saying enough is enough.”

Even outside the club’s exclusive confines, the debate lingers. Longtime Santa Barbara preservationist Jarrell Jackman said he quit the county’s Historic Landmarks Advisory Commission partly in frustration over Warner’s proposal.

“This building had been landmarked, the owner had agreed to it, and then he came in with a project that significantly altered it,” Jackman said.

Meanwhile, local hotel developer Fess Parker -- TV’s erstwhile Davy Crockett -- looks on with wry detachment.

“Most of us would say if you have a guy with the resources of Mr. Warner who wants to improve the property, let him,” Parker said. “It’s not Versailles.”