The order for a full environmental study of the proposed conversion of the Highlands Inn to timeshare units proved a qualified victory for neighborhood opponents of the hotel''s plan to convert to timeshare. But questions over just how the county will deal with timeshares-which are allowed under the county''s own land-use ordinances-is a subject still in the making.

Neighbors of the Highlands Inn had complained that the already tight parking situation would be further pinched with the increased occupancy, and traffic could only worsen. And despite projections by the hotel that water usage would be cut "by a third," and that the treated water discharged into the ocean would be "almost drinkable," residents insist that the conversion would lead to greater strain on an already faltering sewage system.

The environmental impact report (EIR) ordered by the Monterey County Board of Supervisors last month will explore specifically the impacts on traffic and parking of the proposed conversion of the Inn''s 143 hotel units to timeshare, as well as potential problems to the treatment of water and sewage.

Neighborhood activists like Honey Williams were pleased that the board saw reason for further study despite the three previous recommendations of negative declaration recommended by the county planning commission. "The main big deal," says Williams, vice-president of the Carmel Highlands Association, "is the intensification of use. When you have a timeshare, you max it out. If you have a timeshare [at the Highlands Inn] during AT&T, you invite all your friends down."

"We don''t mind timeshares, we just think this is a poor location," adds Williams.

While the neighbors of Highlands may not be opposed to timeshares in theory, guardians of Monterey County''s general fund are beginning to think twice about a county ordinance that allows timeshares in some visitor-serving areas of the county.

On Dec. 9, the board adopted an interim ordinance which temporarily prohibits any further business'' of visitor-serving usage (i.e. hotels and motels) applying for timeshare conversion.

According to the county''s chief of planning services, Nick Chiulos, the interim ordinance gives county staff more time to study just what the full impacts of timeshare conversion would mean for the county in terms of both land use and revenue.

"This is a new area for the county. The regulations are on the books, but the Highland''s proposal is the first to put those regulations to the test. It needs to be flushed out," Chiulos says, adding that the department plans to recommend an extension of the ordinance when it expires on Jan. 20.

According to Mark Solit, owner representative for the Highlands Inn, the county''s inquiry into timeshares will not impact the Inn''s application. "There is no question the current county code allows for timeshare, and it is a permitted use on this property," says Solit. "We applied under the current rules. [The new ordinance] cannot include the Highland''s application under the law."

Solit says he believes much of the opposition to the proposal comes from fear over something new. "We are the first ones [to propose timeshare conversion], and of course, we are experiencing some of the growing pains," he says.

But just how the closure of the Inn, and the subsequent sale of it''s 143 rooms, would impact the county''s general fund through the loss of Transient Occupancy Taxes (TOTs) is the lingering question.

Solit says the conversion would not severely impact the county''s revenues. "We''ll continue to pay TOT to the county," he says. Until the rooms are sold, the Inn will continue to rent them out, and thus pay the appropriate TOT, he says. Timeshare owners also receive "points" for occupancy on their units, so if an owner is not using the space, it is to their advantage to allow the Inn to rent it out-thus generating more TOT revenue.

"In addition, this is real property and gets assessed for property taxes," Solit adds.

"To a minor extent that''s true, but it''s not anywhere near a one-to-one ratio. [From property taxes] only 18 cents goes to the county," says County Treasurer Lou Solton. According to Solton, closure of the Highland''s Inn would mean a TOT revenue loss to the tune of $2.7 million over five years. The loss, as he reported to the board of supervisors on Dec. 2, would be counterbalanced by the addition of numerous high-end rooms at existing hotels throughout the county. "You are removing the loss by adding the new rooms," Solton says.

Cities throughout the county have struggled with the issue of timeshares. Monterey, Carmel and Pacific Grove have all adopted regulations banning timeshare units within their cities'' borders. "There really isn''t any benefit to the city for having timeshares," says Pacific Grove Community Development Director Tony Lobay. Residents of Pacific Grove, which has two timeshare facilities, voted in 1982 to ban further development of timeshares.