Malibu Businessmen’s Beach ‘Sandbox’ Spat Spills Into Court

(Bloomberg) -- In Malibu, the upper crust Pacific Ocean enclave near Los Angeles, James Kohlberg, son of the late KKR & Co. co-founder Jerome Kohlberg, has accused another business titan of stealing sand.

He is alleging in a lawsuit that a neighbor on Broad Beach Road, Milwaukee Brewers principal owner Mark Attanasio, is using heavy machinery to help himself to large scoops of the public beach as part of a construction project.

“This case is about a private property owner using a public beach as their own personal sandbox and the disturbing conversion of a public natural resource (i.e., sand from Broad Beach) for a nearby homeowner’s personal, private use,” lawyers for Kohlberg wrote in the complaint filed last week in the Beverly Hills branch of Los Angeles state court. 

Attanasio will “aggressively defend” his rights in this legal process, his attorney, Kenneth Ehrlich, said in an emailed statement. Attanasio’s company has complied with requirements in a construction project permit, the lawyer said.

The Broad Beach spat started after Attanasio obtained a permit to do repair work on the seawall at one of his parcels. Conditions in the permit barred the use of heavy machinery in the tidal zone and removal of sand from the public beach, according to the complaint.

Attanasio’s crew used “enormous excavators” to dredge up the sand, disturbing local marine life and draining a beach with “historic concerns of sand depletion” of even more sand, Kohlberg’s lawyers wrote. 

Expensive Homes

Malibu, a 21-mile stretch of beachfront, is a getaway for celebrities, tech and finance billionaires with the most expensive homes ever sold in California.

California has had its share of high-powered people involved in coastal quarrels. To the north, venture capital billionaire Vinod Khosla has waged a 15-year fight to block public access through his private property to a popular surfing spot near San Francisco. To the south, “Bond King” Bill Gross three years ago lost his bid to fend off criminal charges after he tormented his Laguna Beach neighbors by blasting the Gilligan’s Island theme song on outdoor speakers.

Kohlberg claims he contacted California regulators to no avail. The California Coastal Commission launched an investigation but hasn’t taken action to stop the sand-stealing, according to the complaint. 

California Coastal Act

The lawsuit cites violations of the California Coastal Act and nuisance claims. Kohlberg is seeking a court order requiring Attanasio to replace the sand and preventing him from taking more of it, as well as monetary fines.

The lawyer for Attanasio said his limited liability company, 2XMD, the legal owner of the Broad Beach Road property, “is in the midst of a fully-permitted emergency repair of the property to protect it from ocean forces.”  

“It has secured all permits necessary for the repairs from the City of Malibu and LA County as well as thoroughly vetted all contractors and sub-contractors involved in the project,” Ehrlich said in his statement. “It has acted in 100% compliance with all of its permits.”

Kohlberg bought his beachfront home in 2021 for $14.2 million, according to property records. Attanasio paid $23 million in 2007 for one part of his property and $6.6 million for an adjacent lot in 2017.

Attanasio is co-founder of Los Angeles-based Crescent Capital Group, an alternative asset manager with $43 billion under management as of March 31.

Kohlberg is chairman of Kohlberg & Co., a private equity firm founded by his father, who was a pioneer of leveraged buyouts at KKR. Last month, Kohlberg pledged $30 million to finance a center to advocate for reform of the Supreme Court, the Washington Post reported.

The case is Los Trancos Management Services LLC v. 2XMD Partners LLC, 24SMCV03828, California Superior Court, Los Angeles County (Beverly Hills). 

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