The Sunday Times-World, U.K. August 14, 2005

Tycoon Threatens Haven of the Rich and Famous

EVER since Charlie Chaplin declared it “the last bulwark against nosy parkers in America” 70 years ago, the tiny Californian township of Montecito has revelled in its reputation as a discreet haven for Hollywood stars.
While Malibu and Beverly Hills are overrun by bus tours of fans peering over A-list actors’ leylandii, few have heard of the seaside town 80 miles west of Los Angeles. That is how Oprah Winfrey, Bo Derek, John Cleese and many other celebrities with homes there have enjoyed it. Until now.

An unwelcome spotlight has been cast on the Mediterranean-style town, where modest three-bedroom homes sell for £2m, by a battle between its well-heeled residents and an interloper, Ty Warner, inventor of the once-fashionable Beanie Babies.

The 60-year-old bachelor entrepreneur, who started divesting his £3 billion fortune into luxury hotels before the craze for his stuffed toys peaked five years ago, has created a furore by seeking to throw open to outsiders the private club at the heart of the community.

The Coral Casino Beach and Cabana Club, founded in 1933 — five years after Chaplin opened the Montecito Inn for the discreet entertainment of his young mistresses — has long been the place where friends meet at sunset to toast pods of dolphins and the occasional whale.

Errol Flynn is said to have seduced three maids in the Coral’s swimming pool one summer night, while John F Kennedy spent much of his honeymoon with Jacqueline Lee Bouvier relaxing on its Pacific terraces.

Yet the Coral ran into hard times and was declining into shabby gentility until it was snapped up by the red-haired tycoon, who has been on a buying binge in Montecito and neighbouring Santa Barbara.

“Ty Warner has spent $100m around here in the past couple of years, everything from golf courses to rundown hotels, about the same as Larry Ellison (the Oracle software founder) has been spending over at Malibu,” said an estate agent last week. “They are playing a giant game of Monopoly but the difference between the two towns is privacy, which is priceless.”

The Coral is a prestigious piece in the billionaire’s game plan: Winfrey, who owns a £30m estate in Montecito, has dropped by and Tobey Maguire, star of the Spider-Man movies, asked about membership when he was considering buying former West Wing actor Rob Lowe’s clifftop house, which has since been sold to Tom Cruise.

Warner wants to spend £20m refurbishing the club, which most of its 500 members agree is long overdue, but his forthright methods have raised hackles and generated headlines about “dirty tricks in paradise”.

Eugene Geller, 58, a financial consultant and a “Coralian” for 10 years, said Warner needed the permission of club members before he could rebuild and had played “hardball” to get it. “He brought in strangers to shout us dissidents down at meetings and when it did not go his way threatened to close down the club until we gave in,” he said.

J’Amy Brown, president of the Montecito Association, the most influential residents’ group, said that hostilities between club members had been getting out of hand.

“At some meetings it was just short of pitchforks and mayhem,” she said. “Now it has become a referendum of where we want to see Montecito in 10 years’ time as a community or as something much more like the rest of California. Noisier, busier.”

Local celebrities are keeping their heads down: Cleese, who owns a beachside house and a 15-acre ranch in Montecito was not available for comment. Nor were Jeff Bridges or Kevin Costner.

A source close to Winfrey said: “She is very fond of Montecito and anything which changed it would rob California of one of its last unique and special places.”

Warner, who takes breakfast every morning at his Biltmore hotel across the street from the Coral, is confident that he will win: last week the Coastal Commission, a planning body, dismissed an appeal against redevelopment, due to start this winter.

Greg Rice, an aide, said the magnate had spent £5m trying to reach a deal with the “elitists” who want to keep the club private. “Even by Californian standards it’s been surreal,” he said.