California Backs Surfers as Billionaire Khosla Risks Property

No trespassing signage is displayed on a gate leading to Martins Beach in Half Moon Bay, California, U.S., on Wednesday, July 16, 2014.

Photographer: David Paul Morris/Bloomberg

The state is threatening to step in to ensure Californians’ God-given right to surf.

The State Lands Commission may use powers never employed in its 77-year history, seizing private land for public use to end a battle between surfers and billionaire venture-capital investor Vinod Khosla, who has been locking a gate at his beach property along California’s Pacific Coast.

“This is the route he’s chosen, and it’s unfortunate because certainly this is a property that hopefully can be available for those who want to come and enjoy it,” said Betty Yee, California’s controller and a commission member who would help make the eminent-domain decision. “My hope is that it can get resolved through negotiations.”

Khosla’s campaign to keep the public off the 89 acres he owns on the crescent-shaped coastline marks the latest salvo in an income-inequality battle in which long-time residents are being priced out by the San Francisco Bay Area’s technology elite. The influx of highly paid tech workers and wealthy executives has generated resentment among those already worried about the area’s soaring cost of living.

“I live here, and I want to be able to bring my kids here,” said Krishneil Maharaj, a 35-year-old information technology project manager who recalled scattering his grandmother’s ashes at a family ceremony at the beach a decade ago. “I don’t think one man should be able to cut off access to this beautiful spot.”

No Easement

Khosla, 59, has argued in court filings that the beach is privately owned, that there is no easement for the public to use the area and that development permits required by coastal regulations don’t apply to him. He wants to stop public access because it’s not economically feasible to pay an attendant to collect parking fees and tend the beach, according to a 2009 filing with the San Mateo County Superior Court.

Khosla, founder of a Menlo Park, California-based venture-capital firm, declined to comment on the possiblity of state action. Jeff Essner and Dori Yob, attorneys at Hopkins & Carley representing Khosla in the beach dispute, didn’t return calls seeking comment.

To try to resolve the impasse, officials last month invited Khosla to begin talks to sell the state a right of way on his $32.5 million property providing public access to and along Martins Beach, a popular surf spot about 33 miles (53 kilometers) south of San Francisco.

Beach Access

A patchwork of laws governs access along U.S. coastlines, with the boundary based on a formula referencing the tide line, including the mean high-water and low-water lines, said Ben Sherman, a spokesman for the National Oceanic and Atmospheric Administration. Under the California Constitution, land that’s seaward of the mean high tide line is considered public land and access is enforced by the state Coastal Commission.

In earlier fights in Southern California, entertainment mogul David Geffen and Santa Barbara News-Press owner Wendy McCaw tried unsuccessfully to block public access to shorelines near their homes.

“In California, the public owns the beach; we like that,” Rob Caughlan, 71, a former president of the nonprofit Surfrider Foundation that sued Khosla for blocking access, said in an interview on the beach.

Closing Gate

Khosla bought the property in July 2008 and began sporadically closing the gate that winter, prompting San Mateo County officials to send a letter asking him to apply for a coastal development permit. In 2010, the closures became more frequent until the gate was permanently closed that fall, according to Eric Buescher, an attorney at Cotchett, Pitre & McCarthy LLP, the firm representing the Surfrider Foundation. Khosla reopened the gate on Dec. 18, he said.

“You can’t thwart a billionaire,” Maharaj said in an interview after a stroll along the deserted sandy coastline on Jan. 15, a day when the gate leading to the beach was locked.

The previous owner had charged cars a small fee to use the road to the beach, which is bordered by cliffs and features seals bobbing in the surf. About 45 leased cabins and grassy bluffs line its edge.

Jennifer Lucchesi, executive officer at the State Lands Commission, sent a letter to Khosla’s representatives on Dec. 31 initiating talks mandated by a law enacted last year that directs the agency to consider using its eminent-domain powers if an agreement isn’t reached by Jan. 1, 2016. The agency has about $6.4 million in a land bank fund to buy the property, she said, adding that she hasn’t yet received a response.

‘Permanent Right’

“I do think it’s going to be challenging, but I’m optimistic we can find a resolution that results in the public having a permanent right to access Martins Beach,” Lucchesi said in a phone interview.

If the state decides to use those powers, it could acquire land leading to and along the shoreline, including the sandy beach, through Khosla’s property.

Any agreement reached with his representatives or a decision to use the agency’s eminent-domain powers would have to be approved by Yee, Lieutenant Governor Gavin Newsom and Finance Director Michael Cohen.

Cohen spokesman H.D. Palmer and Newsom spokesman Rhys Williams declined to comment on the eminent-domain option.

Caughlan has been stopping by almost every day to check the status of the gate after a state judge last month ordered Khosla to keep it open. Khosla has filed a motion asking for a new trial.

Painted Over

A billboard that used to welcome visitors to the beach has since been painted over in green. A sign posted on the metal barricade reads “private property, no trespassing.” Caughlan said the gate is open occasionally, and an attendant charges visitors $10 to park nearby.

The battle waged in the courts and the Legislature also involves the California Coastal Commission, which sent Khosla a letter last month advising him that he will face a penalty of as much as $11,250 daily for blocking public access, said Sarah Christie, the agency’s legislative director. The commission would have to hold a public hearing to impose a fee, and Khosla could challenge it in court, she said.

Such disputes are “unfortunately fairly routine,” Christie said. Her agency “has been pretty consistently successful in the counterargument and that’s essentially why you can still get to the beach and enjoy yourself there in California without having to own a multimillion-dollar piece of property on the coast,” she said.

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