On renting a home in Southeast San Diego last year, Tim Norris was delighted to live near a canyon. "When we first got here, we explored," Norris said, recalling he and his daughters hiked several acres of rugged, open space bordered by Varney Drive, Skyline Drive, 65th Street, and 66th Street. "There were cactuses and trees and birds. It was neat."

With piles of garbage, old tires, mattresses, and appliances at the bottom, it was also unsightly and stinky. So when earth-moving equipment scraped part of the canyon of all vegetation last year, Norris had mixed feelings. He welcomed the cleanup but missed the bit of wilderness now being replaced by a construction project.

San Diego City Council member Byron Wear and his business partner, Christopher Montgomery, have owned land in Pepperview Canyon since 1990. Montgomery, a novice developer, recently installed foundation framing for three homes at the canyon's southern end at 65th and Varney. Wear says he no longer owns property at that spot. However, he and Montgomery own five lots farther north, in the untouched portion of the canyon near 66th Street.

Environmentalists, community activists, and neighborhood volunteers are upset Montgomery graded part of Pepperview Canyon and a public easement in it without input from citizens. They wonder how the canyon can be developed without environmental oversight. They blame the City of San Diego's convoluted regulations and procedures, which allowed Montgomery to change the canyon's shape before seeking citizens' approval to tread on the easement. They fear what's left of Pepperview Canyon, including land co-owned by Wear and any foliage and wildlife remaining, will be destroyed by Montgomery's plans to build yet more homes.

"If these three houses are done, then the rest of the canyon is a done deal," said Robert Robinson, a member of the Encanto Neighborhoods Community Planning Group, which is considering Montgomery's request that the city relinquish its right to build an extension of Varney Drive in Pepperview Canyon. "I want to know what's down in that canyon that needs to be preserved." The advisory group of citizens recently postponed a decision until it receives an environmental review of the easement. "I have no quarrel with the project. I have a problem with the process. The city is asking me -- the public who pays taxes -- to give up the street before I know what wildlife is down there," Robinson said. "We have land being graded upon before there's any public input. Somehow or other, the cart is before the horse."

Located in Councilmember George Stevens's district, Pepperview Canyon straddles South Encanto and Alta Vista, where community-plan goals aim to protect hillsides, slopes, and canyons. However, because the area is zoned for single-family homes and was subdivided into parcels in 1917, Montgomery's residential building project -- except for the easement -- is not subject to a public hearing, environmental impact report, or hillside review.

San Diego's canyons, deemed a vital natural resource by the Sierra Club, have little protection unless they are designated open space. Despite good intentions of community plans, new regulations make it easier for developers to build in canyons, environmentalists say. As chairman of the city council's Land Use and Housing Committee, Wear supported the new regulations, which city officials contend offer more safeguards than the old rules.

A city bureaucracy in which the left hand doesn't know what the right foot is doing contributed to premature grading in Pepperview Canyon and enabled Montgomery to get a grading permit after he was accused of breaking the rules.

In November, San Diego's Neighborhood Code Compliance Department sent Montgomery a "notice of violation" for illegal grading. The notice resulted from a misunderstanding, said Montgomery, who -- like Wear -- is easygoing and talkative. "Can you tell a difference between grading and scraping?" Montgomery asked, explaining he cleared the site of debris and plants last summer after receiving a weed-abatement reminder from San Diego Fire & Life Safety Services and a garbage-removal notice from the city's Environmental Services Department.

The illegal dumping of trash -- an ongoing problem in Pepperview Canyon -- causes the department to ask property owners there to clean regularly, said Helen Heim, a deputy director. "We tell people to remove litter. We would never ask them to remove live vegetation. I don't know how people could misunderstand."

Wear said he was unaware of the illegal-grading notice, stressing he has no ownership or involvement in the construction site. "I didn't get any phone calls saying there was a problem on permits," Wear said. "Chris Montgomery has complete control over it. He has responsibility to manage the project, pay taxes, and make payments."

Although no one has suggested that Wear used his influence as a city councilmember to guide Montgomery through various agencies or get permits, Wear seems sensitive to that potential charge. "I didn't make any calls to city employees. When this project popped up in Environmental Services," Wear said, referring to trash accumulation in Pepperview Canyon, "they were taking actions independently. They didn't know I was involved."

Political watchdog Melvin Shapiro claims Wear broke the rules in disclosing his stake in Pepperview Canyon on several statements of economic interests, which are required annually of elected government officials. Shapiro filed complaints at the San Diego City Attorney's office and District Attorney's office, accusing Wear of conflict of interest, given the councilmember voted on land-use regulations and neighborhood improvements favoring his real estate holdings.

Wear dismisses the allegations as "ludicrous," noting Shapiro raised them during the mayoral campaign and even then failed to garner the interest of mainstream media. "There's no story here."

Although Wear acknowledges owning lots within Pepperview Canyon, he insists he does not own the three parcels where Montgomery plans to build homes. However, that conflicts with his 1999 statement of economic interests, which contains confusing and outdated information. For example, year after year Wear includes among his assets two lots that he and Montgomery lost to foreclosure in 1995. Wear also lists land at "65th & Varney," the same property he denies owning. Yet he neglected to specify the disposal date on his financial-disclosure form. Wear said he continues to list properties he no longer owns from "an abundance of caution."

Public records show Wear is a general partner of Pepperview Canyon Estates II limited partnership, which has owned one parcel at 65th and Varney since 1991 and acquired two more adjacent parcels in early 1999. Wear acknowledges he had owned the first parcel until last July, when it was transferred to Pepper View Canyon LLC (limited liability company). Wear says he never owned the other two parcels at 65th and Varney, which were also transferred from the partnership to the company last July.

Shapiro thinks the limited liability company has the same owners as the partnership. "You can't tell me they're not one and the same." Unlike limited partnerships, which identify general partners, limited liability companies aren't obligated to reveal owners.

Public records show Wear and Montgomery own three lots under their names and another two through the Ocean View Estates limited partnership.

Wear neglected to add the partnerships to his statements of economic interests, something Shapiro regards as a law violation. That omission is "no big deal," if property owned by the partnership appears on the statement, said Robert Simmons, a retired law professor of University of San Diego. "If the limited partnership owns other property in the city that's not disclosed, then it's a big deal." Wear said he didn't list the partnerships because he resigned as a general partner in 1994 and gave Montgomery control of the real estate.

For the past several years through 1999, Wear marked all of his Pepperview Canyon real estate as "sold (in escrow)." That notation, year after year, not only strikes Simmons as odd but also "duplicitous." To say a property is sold, in escrow, "tells me he no longer has ownership, that the seller hasn't been paid," Simmons said. "It sounds to me like a complete dodge to circumvent the required disclosure of property he owns."

Wear said he has nothing to hide and he's abiding by the law. He said he agreed to sell his half of the land to Montgomery in 1994, after they sold a home Montgomery had built at 621 South 65th. "Chris needs to complete the project before it goes out of escrow," Wear said. "I'm anticipating that will occur in a couple of years. It's moving slowly. Technically, I'm still the owner of record."

Neither Wear nor Montgomery provided a sales contract or escrow papers, but Montgomery did find Wear's resignation letter from the partnerships. Wear said their agreement is confidential and he has disclosed what's required. The two met in the late 1980s, they said, when Wear tried to sell some of his parcels via a classified newspaper advertisement. Unable to buy, Montgomery persuaded Wear to let him manage and develop the land.

San Diego County property records and lawsuits indicate Wear and Montgomery have struggled during the past decade to turn over their investment in Pepperview Canyon. For example, Neff Rentals in Escondido filed a mechanic's lien against the two partners last summer for failing to pay $4694 for two bulldozers. In 1996, private lenders sued Wear and Montgomery for nonpayment of $9989. The partners were also late in paying property taxes on five parcels, which is permitted. In 1995, they lost two lots in a foreclosure suit seeking $32,000.

The expense of installing sewer and water pipes under 66th Street initially stymied progress, said Montgomery, a real estate broker for Approved Mortgage Funding and Monterey Commercial Capital. Then a recession hit in the early 1990s. "I'm probably the only broke developer out there." Montgomery envisions two-story homes featuring large lots, red-tiled roofs, landscaping, three-car garages, 2000 square feet of living space, and four or five bedrooms. Each home would cost more than $200,000, he estimated. "This is a neat little project in an up-and-coming, working-class neighborhood."

That Wear voted to update regulations easing construction on hillsides and in canyons creates a conflict, Shapiro says. Voting to improve Martin Luther King Jr. Park, across the street from Pepperview Canyon, also is a conflict, Shapiro adds. Bristling at the hint of impropriety, Wear said there were times he abstained from voting on certain matters. "Just about everybody on city council owns real estate," Wear said. "To say they shouldn't vote on land-use issues is ridiculous."

In June, the District Attorney's office declined to act on Shapiro's complaint but referred the file to the California Fair Political Practices Commission.

Robert Fellmeth, a law professor at the University of San Diego, said elected officials may vote on general land-use issues and public-works improvements in neighborhoods where they own land, provided they don't benefit more than other property owners. "If a public official has an interest generally comparable to that of the citizens in that jurisdiction or general area, he or she may vote on it," Fellmeth said. "If, however, his or her interest is substantially disproportionate, such that the vote would markedly affect the value of his or her property vis-à-vis properties generally, then there can be a conflict problem."

Kathleen MacLeod, a member of Encanto Neighborhoods Planning Group, said she is amazed Pepperview Canyon is not in the city's hillside-review overlay zone, which would have required a public hearing and environmental review before any grading or construction. "It would take a mountain goat to go up and down some of the slopes," she said. "I just can't understand why the canyon is not protected." MacLeod was shocked to see the public right-of-way and three lots at 65th and Varney graded. "That part of the canyon was denuded. There's not one piece of chaparral."

Backed by Wear, new regulations replacing the hillside-review process on January 1 were lambasted by environmentalists. Ironically, the new rules would better protect Pepperview Canyon because they demand environmental reviews and public hearings for all steep hillsides, not just those within the former hillside-review overlay zone. Countering critics' outcry, some city planners say the new rules apply to more hillsides and require replacement of vegetation. Because Pepperview Canyon did not fall under the old rules last year when Montgomery started, his project escaped many safeguards targeting environmentally sensitive areas.

Robert Didion, program manager for San Diego's Land Development Review Division, said Montgomery is complying with the rules despite a few irregularities.

When the division gave Montgomery a grading permit in December, Didion said, it was unaware of the illegal grading violation issued by another city department. Had the division known, it would have billed Montgomery $7241 instead of $4827. Other penalties might have applied if the grading had affected endangered or threatened plants and wildlife. Montgomery's procurement of a grading permit corrects his previous violation, Didion said.

In December, the division also drafted an "encroachment removal" agreement with Montgomery, allowing him to grade the easement within Pepperview Canyon. The contract should have been signed and recorded before any grading occurred, but in Montgomery's case the document wasn't signed until March or recorded until June. That delay, resulting from a missing exhibit, is not uncommon in construction projects, Didion said.

Ongoing development -- albeit legal -- of San Diego's vacant land frustrates environmentalists.

"This is a story that hasn't been told," said Terry Weiner, co-chair of the Sierra Club's land-use and water committee in San Diego. "It's the story of our crummy municipal code that has changed recently from bad to worse." Weiner thinks Pepperview Canyon is a wetlands, too, based on some arroyo willows, shells, and puddles she photographed there a few months ago. The canyon may be a tributary of Paradise Creek, which feeds Paradise Marsh. Weiner also took photos of such native plants as California sage, laurel sumac, lemonade berry, and Mojave yucca.

Whether the canyon hosted any threatened or endangered wildlife and plants would be hard to prove now that part of it is bare, Weiner said. "Mind you, this is not a pristine wetland. This is what you would call a degraded canyon, but I was very upset by what I saw. If the canyon was revegetated again, it could be restored." Instead, "They made a mess. They flattened the hillside and ruined the natural contour."

While admitting his confusion in dealing with various city agencies, Montgomery said he has tried to follow the rules and not harm the environment. "This is not a wildlife preserve," he said. "I find it ironic that community activists raise environmental issues when you have illegal dumping." Carlin Bryant, a special assistant to councilmember Stevens, said Stevens became concerned about Pepperview Canyon being used as a trash heap in early 1999, after a corpse was found along 66th Street. At that time, they learned Wear owned land nearby, Bryant said.

Wear said he cares about the environment, noting he advocates removing the city's sewer system from canyons. But, "I have to tell you: the area we're talking about is not an environmentally sensitive canyon," Wear said. "From a land-use standpoint, the land is zoned for homes on 5000 square feet, but the lots are 10,000 square feet -- twice the size of the zone. Another developer would remap the whole thing into smaller lots, but Chris is maintaining the rural character."

Juan Muños, whose home overlooks Pepperview Canyon, isn't opposed to the project because it would deter garbage dumping, but he questions the quality of workmanship. When grading occurred last year, about ten feet of his property slid to the canyon floor. "Without a permit, they took a lot of dirt out, and the hillside fell." Montgomery's crew rebuilt the canyon wall and Munos's side yard, but the dirt is looser, and a crack has emerged. "The density isn't the same," Munos said, stomping the ground. "The whole thing is going to come down."