Accord Between City and Developer Lapses : Compromise Would Have Let Muffler Shop Stay at Location for New Santa Ana Shopping Center

A compromise between the City of Santa Ana and a shopping center developer that would have allowed Ace Muffler to remain as part of the planned center has expired, sending all sides back to square one.

City Manager Robert C. Bobb met separately Friday with representatives of Ace Muffler and Urbatec, a Santa Monica-based developer contracted to build the shopping center, to review the status of the delicate agreement pieced together just before Christmas.

Bank of America retreated from a previous commitment to back almost $7 million in industrial development bonds for the project when it learned that Ace Muffler would be allowed to remain at its East 1st Street location. The city has been unable to find a financial institution to back the bonds.

‘Agreement . . . Is Voided’ “The agreement with Urbatec is voided, due to the time line,” Bobb said. “Therefore, we are back to the original proposal, which calls for the City of Santa Ana to deliver a cleared site to Urbatec in June of 1986.

“I guess the bottom line is we’re right back where we started,” he said.

Miguel Angel Pulido, an Ace Muffler owner, said the next move is up to the city. Although the compromise agreement between the city and Urbatec may no longer be valid, he said he expects Santa Ana to abide by a separate agreement with the muffler shop that would allow it to stay.

“As far as we’re concerned, the ball’s still in their court,” he said, but he conceded that the parties may be at a stalemate. Referring to a pair of lawsuits Ace Muffler has filed against the city, Pulido said, “We would like not to go back to fighting.” But he added that the city seems to be moving in Urbatec’s direction in a sort of “cat and mouse game.” He described the city as “somewhat at a loss . . . frustrated.”

Doesn’t Want to Relocate After the 45-minute meeting with Bobb and other officials, Pulido said Urbatec is not interested in relocating the proposed shopping center to the soon-to-be-vacant McLean Cadillac site at 2nd and Main streets.

The shopping center, which Urbatec has an exclusive right to develop, is now planned for a 4.3-acre site bordered by 1st, 3rd and Spurgeon streets and an extension of Maple Street. The McLean site is smaller, but Urbatec has concluded that it would not be economically feasible to build there.

Both Bobb and Pulido noted that two urban study groups last month recommended moving the shopping center half a block to the west, which would, among other things, remove it from the Ace Muffler site. Pulido called that plan “wise,” but Bobb said city officials found it economically unsound.

Wants Shop to Move Urbatec also analyzed that idea and concurred with the city, Bobb said.

The developer now wants Ace Muffler to move and does not plan to enter into any financial arrangements that call for the shop to stay put, Bobb said. The city manager said he hopes that a meeting between Ace Muffler and Urbatec officials would take place as soon as next week and that the two sides would reach an accord. The city, Bobb said, will help any way it can.