SACRAMENTO, Calif. (CN) – A sharp escalation in the battle between the state of California and a Silicon Valley billionaire occurred this week, after the State Lands Commission ordered a formal study exploring the use of eminent domain at Martens Beach near Half Moon Bay.
“This has received outsized attention for good reason,” Lt. Gov. Gavin Newsom, also a State Lands commissioner, said during Tuesday’s meeting. “It’s time for us to step up our game.”
Officials with the State Lands Commission, the Coastal Commission and even state senators and Assembly members have grown increasingly exasperated with Vinod Khosla, a billionaire who bought a two-parcel property near Martens Beach in San Mateo County in 2008.
Soon after, Khosla occasionally shut down a gated road that led to the beach. The property, about seven miles south of Half Moon Bay, boasts several cabins for rent and was formerly owned by a family that was more liberal in allowing access.
Since then the dispute between state officials and Khosla, who argues through his attorneys that the issue is about the principle and property rights, has only increased in standoffishness and vitriol.
“Clearly what is at stake is whether great wealth trumps the public interest when it comes to a precious natural resource,” one man said during a lengthy public comment session at the meeting.
The commissioners, which include Newsom and California State Controller Betty Yee, made no bones about their frustration with Khosla’s position.
“This has been a frustrating situation,” Yee said. “The tenor of negotiations has not been as serious or purposeful as I would’ve hoped.”
The commission was authorized by the California Legislature in late 2014 to negotiate the purchase of a public easement through Khosla’s parcel.
Yee said those negotiations have not been fruitful, with Kholsa refusing to grant a public easement and instead offering the state the opportunity to purchase the entire parcel and what officials characterized as a price point well above market value.
“This is going to be resolved,” Yee said. “And it will be resolved to the favor of the public of the state of California.”
State Sen. Jerry Hill attended the meeting and said the state is actively seeking to locate funds to take the easement by eminent domain.
“California is watching the precedent we set with this,” he said during the proceedings. “They want to make sure their rights are protected and precedent is set for future generations.”
Jeffrey Essner, Khosla’s attorney, presented his client as a philanthropist and environmentalist who has been the subject of coercion by opportunistic politicians and an ill-informed public.
“This is a dispute concerning principle and Mr. Khosla is unwilling to be coerced into giving up a vested constitutional property right,” Essner told the commissioners, who did not appear to be receptive.
“Let’s negotiate this thing and get this thing done,” Newsom said. “I mean, stop standing behind the courts and all this legalese. Deep down he’s got to know the right thing to do.”
There are three pending lawsuits involving Martens Beach.
Friends of Martins Beach sued Khosla in San Mateo Superior Court soon after he brought the property and restricted access to the private road. The case was dismissed at the summary judgment phase, but a state appellate court remanded a single claim.
Meanwhile, the Surfrider Foundation sued in 2013, claiming that Kholsa's installation of the gate between Highway 1 and his property constituted a development in a coastal zone and therefore required a permit. A San Mateo Superior Court judge found for the foundation, holding that Kholsa did need a permit to operate the gate that shuttered public access to Martens Beach.
Kholsa appealed the decision and oral argument will be heard in the First Appellate District, though it has yet to be scheduled.
Finally, Kholsa, used his Martens Beach LLC to sue the State Lands Commission, the California Coastal Commission and San Mateo County in federal court this October, claiming the billionaire has been harassed by state officials and members of the public.
Khosla’s lawyers also assert he has not operated the gate much differently than the previous land owners.
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