@John Savard Re: Boo Freakin' Hoo
Ok,
Here's the thing. This is the complicated part.
Khosla is correct in that there is no easement.
So, specifically, the prior owner did not grant an easement to the city (public) which would have ended this issue when Khosla bought the property.
There is no fraud on the part of the city, county or even state. There is no 'right of way' document. This is why Khosla has legal standing not to allow people to trespass on his property. If we were only dealing with an issue of an easement... Khosla would win. But there's more to it...
There is a law however that forces Khosla to grant access to the beach because he has 'land locked' a piece of public land. (Actually there are a couple of laws which force him to grant access.)
Khosla is also correct in that he faces unknown downside in terms of potential liability if someone is hurt on his property.
The issue is that you have a couple of different laws at work and there is a conflict in how the laws are being interpreted. (Hence you either hash it out in a room full of lawyers or you go to court.) Khosla wants to keep people off the beach, so he's not going to cave. We know his position.
The simple solution would be for Khosla to sell a strip of land to the beach. He could be forced to sell via eminent domain, however the mayor has political aspirations. Note that city offered $380,000 for the land, Khosla said it was worth 10 million. (He should be careful in what he asked... )
What is being set up is that the city will use eminent domain, and Khosla will sue because he will claim the city is not giving him fair market value. Thus tying it up in court for a few more years.
Here's where it gets interesting. 90 acres sold in 2008 for 32.5 million is $361,100.00 an acre. While I haven't seen the map, it sounds like the city wants to buy one acre for the access for $380,000.00 .
On the surface it seems reasonable, given the price he paid. Even if you were to double it... its still far short of the $10 million Khosla countered with.
IMHO if the city were to offer him $500,000.00 for the acre it would pass muster. (Meaning its over the fair market value. )
Of course, here's the downside for Khosla.
If he were to claim that the property was worth $10 million, and the city did pay that... then his other property (89 acres) would also be worth 10 million. So he should be taxed at that level. I don't know what the property taxes are in California, but you can bet he'll be seeing red for a while.
If Khosla was smart, he would sell the land and be done with it. He has no upside.