The Irwindale City Council decided Wednesday to drop a lawsuit against the Sriracha hot sauce factory and table a separate resolution declaring the factory a public nuisance.
The city and the factory began warring late last year, when residents began to complain of a spicy odor that caused headaches, heartburn and watering eyes.
The trial was scheduled to begin this November, and the public nuisance declaration would have eventually authorized city officials to enter the factory and make the changes themselves.
But city officials said Huy Fong Foods Inc. had finally demonstrated a specific written commitment to solving the smell issues. Mayor Mark Breceda, who toured the factory earlier this week, said the conflict should not have been so drawn out.
"We're almost sorry that this has gone on so long," Breceda said. "We're looking forward to being partners for a very long time."
The council voted unanimously to table the resolution and decided in closed session to drop the lawsuit.
Huy Fong Foods Chief Executive David Tran was not present at the meeting but thanked his supporters in a statement to the Los Angeles Times.
"From now on, I will be concentrating on making my hot sauces quality better and better, with the price being lower and lower," Tran said.
It wasn't immediately clear why the city has relaxed its position. Tran has promised before to fix the issues, in writing and in person at council meetings through an attorney, but Irwindale officials still sought regulatory action.
John Tate, attorney for Huy Fong Foods, said the council's decision Wednesday did not result from any legal settlement between attorneys.
"Management [of the city] met with the mayor, and they had a frank discussion which resulted in a willingness to work together," Tate said.
City officials say they will visit the Sriracha plant again when it begins to grind peppers harvested in the fall. The plant is still functioning under a court injunction that bans harmful odor-causing activities, but it's up to the city to go back to court to enforce that, Tate said.
The conflict seems to have ended without any official agreement about whether there ever was a harmful odor.
The South Coast Air Quality Management District did not find enough evidence of a harmful smell to justify issuing a violation, and air quality officials say about two-thirds of the complaints they received came from just four households.
The first complaints came from City Councilman Hector Ortiz's son. In February, Huy Fong Foods began to offer daily tours through the factory and asked each participant if they experienced any harmful odors. None did.
But the city's own smell study, by Santa Monica environmental consulting firm SWAPE using a different survey method, found harmful odor levels in multiple areas around the city.
City officials also mailed a survey to residents and about 40% of respondents said they could identify the smell, according to copies of the responses obtained by The Times. About 16% of respondents said the smell was harmful.
Tran said he had made some changes to the filtration system at the plant, and he promised in a letter to the council to fix whatever smell issues the city identifies.
"We are obviously happy with the decision the city made to drop the lawsuit and will continue to make a quality product for everyone to enjoy," said Adam Holliday, director of operations for Huy Fong Foods. "We feel confident that the system we have is adequate and we believe that the troubles with the city are over."