SAN FRANCISCO -- Minoru Isutani, the controversial, debt-burdened Japanese businessman who paid an estimated $850 million for Pebble Beach Golf Links in 1990 amid a flurry of Japanese purchases of signature U.S. properties, is selling the famed course.

Isutani -- whose reputed ties to Japanese gangsters helped derail his hard-fought effort to offer private memberships at the course -- has signed a letter of intent to sell Pebble Beach and related properties to other Japanese investors calling themselves Lone Cypress Co.

Although Lone Cypress -- named for the landmark tree along the Monterey Peninsula's 17-Mile Drive that is depicted in Pebble Beach's logo -- did not reveal the purchase price, it is estimated to be $500 million.

With huge loan payments coming due, Isutani had been renegotiating his loan terms over the last several months with his bankers in Tokyo.

Lone Cypress is owned by Taiheiyo Club Inc., an operator of nine courses in Japan, and Sumitomo Credit Service Co., Japan's first and principal issuer of Visa cards.

Sumitomo Bank, which is financing the deal and acting as an adviser, owns 5 percent of Sumitomo Credit and has interests in Taiheiyo.

The new owners say they have no plans to sell memberships at Pebble Beach.

The proposed agreement -- reached Jan. 10 but kept secret until its announcement this week by Japanese and U.S. executives of Lone Cypress Co. -- adds another twist to Pebble Beach's rich history.

"We plan to establish {a reputation} as a management sensitive to the community so that we can clean off the black cloud," said Masatsugu Takabayashi, chairman and president of Lone Cypress Co. and also president of Taiheiyo Club.

The prospective buyers expect the deal to close by March 31.

Paul C. Leach, a director of Lone Cypress Co. and a private investment banker in San Francisco, said the investors were drawn to Pebble Beach by the promise it holds, despite the recession.

"It's probably the world's finest golf resort complex," Leach said. "It's a jewel."

In 1919, the grandnephew and namesake of telegraph inventor Samuel F.B. Morse raised $1.4 million to buy chunks of the Monterey Peninsula owned by heirs of four railroad magnates -- Charles Crocker, Leland Stanford, Mark Hopkins and Collis P. Huntington.

The deal included the Del Monte Forest, where a lodge and a golf course were under construction along a rocky stretch of central coast known as Pebble Beach.

Over the next several decades, the properties passed through several owners and became world famous as a mecca for top golfers and celebrities such as Bing Crosby, for whom a professional-amateur tournament was named.

Television coverage of the tournament inevitably showed Pebble Beach to advantage, with its crashing surf, emerald-colored grass and blue sky.

In 1983, Pebble Beach was bought by Miller, Klutznick, Davis & Gray Co., a real estate partnership headed by oil executive Marvin Davis. The group began hunting for possible buyers a few years later.

They finally found one in Minoru Isutani, a golf fanatic and developer of resort properties in the United States and Japan who saw Pebble Beach as the trophy course of a lifetime.

In a debt-heavy transaction, he bought the Pebble Beach resort in September 1990. In addition to Pebble Beach Golf Links, the resort includes the Spyglass Hill, Spanish Bay and Del Monte courses, plus two hotels -- the Lodge at Pebble Beach and the Inn at Spanish Bay.

A few months later, a Japanese newspaper reported that Cosmo World Corp., Isutani's Beverly Hills-based golf course development company, planned to market more than 700 "exorbitant" memberships in Japan, at an estimated $740,000 each, to help pay off the debt.

The report suggested that the membership plan would "effectively close" Pebble Beach to the public.

In January, the embattled Isutani gave up on the membership plan.