EXHIBIT 10.2

SECOND
EXTENSION AND MODIFICATION
OF
EMPLOYMENT AGREEMENT

             THIS SECOND EXTENSION AND MODIFICATION OF EMPLOYMENT AGREEMENT (the
"Extension") is entered into as of April 30, 2001 by and between California
Coastal Communities, Inc., a Delaware corporation ("Employer"), and RAYMOND J.
PACINI ("Executive").

W I T N E S S E T H:

             WHEREAS, Executive and Employer have entered into an Employment
Agreement dated as of May 1, 1998 and Extension and Modification of Employment
Agreement dated December 7, 1999 (collectively, the "Employment Agreement")
through which Executive has provided various executive capacities to Employer
and Employer has obtained various executive services by Executive; and

             WHEREAS, Employer desires to obtain the benefit of continued
service from Executive by extending the Employment Agreement, and Executive
desires to render continued services to Employer by extending the Employment
Agreement pursuant to the terms and conditions of this Extension;

             NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises and covenants herein contained, the parties agree as follows:

             SECTION 1.     CONTINUING EFFECTIVENESS OF EMPLOYMENT AGREEMENT. 
Except to the extent of any modification made pursuant to the terms of this
Extension, the Employment Agreement shall continue to remain in full force and
effect following the date hereof.

             SECTION 2.     EXTENSION OF TERM.  Employer and Executive hereby
agree to extend the term of the Employment Agreement until April 30, 2003.

             SECTION 3.     BASE SALARY.  From the date hereof and until the
expiration of the term set forth in Section 2 above, Employer agrees to pay
Executive a base salary of at least Two Hundred and Seventy-Five Thousand
Dollars ($275,000) per year in semi–monthly installments on the same dates the
other senior officers of Employer are paid.

 

             IN WITNESS WHEREOF, the parties have executed this Extension as of
the date first above written.

"EMPLOYER"

CALIFORNIA COASTAL COMMUNITIES, INC.

By /s/  SANDRA G. SCIUTTO

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  Sandra G. Sciutto   Chief Financial Officer

"EXECUTIVE"

       /s/  RAYMOND J. PACINI

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Raymond J. Pacini