Action Brought by Residents Group : Downey Says It Will Fight Anti-Redevelopment Suit

In a move that could delay indefinitely the city’s plans to redevelop 380 acres in the Firestone Boulevard area, the City Council has decided to take its chances in court with a lawsuit filed by residents opposed to the plan.

Mayor Randy Barb said in a written statement Wednesday that council members were ending five months of private negotiations with Downey Citizens Against Redevelopment Excesses (Downey CARES), the residents group that sued the city in July.

Decision Criticized

The decision to go to court was immediately criticized by some city auto dealers, who said that if Downey does not move ahead with an auto mall that has been discussed for the redevelopment district, the dealers might move to similar developments proposed in Norwalk and South Gate. Indeed, a Norwalk city official said that his city has signed a contract with one Downey dealer, Frahm Honda, that gives the city 90 days to find a new home for the dealership in Norwalk.

The Los Angeles Superior Court suit, filed by property owners in the redevelopment district who said they were concerned that their land would be condemned by city officials, charges that the city is attempting to subvert the intentions of state redevelopment law by declaring the Firestone corridor “blighted.” The suit claims the corridor is a healthy commercial strip.

The group also claims that the council’s approval of the redevelopment district should be invalidated because Councilman James Santangelo, who cast the deciding vote in a 3-to-2 decision, had a conflict of interest because he owns property in the district. Both the city and Santangelo have said that Santangelo properly disclosed his holdings and was eligible to vote on the issue.

No Comment From Officials

Downey officials said they had agreed with their attorney not to talk about the suit or the city’s plans beyond Barb’s statement. Attorney Paul Gale, who is representing the city in the suit, could not be reached for comment. However, one city official who asked that his name not be used said that the city has refrained from proceeding with any plans for redevelopment while the suit is pending.

The official said the city believes that if it did go ahead, the residents group probably would be able to get a temporary restraining order to stop the plans. No firm hearing date for the suit has been set.

City Manager Robert (Bud) Ovrom and City Council members declined comment on the suit, saying they were acting on the advice of city lawyers.

In a settlement first proposed in December, the city offered not to use its power to condemn property in the redevelopment district if the residents group would drop its lawsuit. Under the proposed settlement, each side would have paid its own lawyers’ fees. So far, Downey CARES says it has spent more than $50,000, and the city says it has spent more than $100,000.

Both sides agree that negotiations broke down when the residents group asked the city to agree to pay as much as $285,000 to Downey CARES if future city councils decided to condemn property in the district. Barb said the group later proposed a settlement in which the city would pay individual cash benefits only to the original 30 members of the residents group if their property was condemned.

In his statement, Barb said that the attempt to “extract financial gains” from the city led to the decision to end the negotiations. Barb also accused the residents group of being “shortsighted” obstructionists.

Paul Sarvis, president of the residents group, said that his organization would have collected only if the city reneged on its promise and decided to condemn property in the district.

He said he was only seeking protection for his members, who, after the statute of limitations expired on the group’s lawsuit, would have been vulnerable if a new city council decided to reinstate eminent domain or condemnation rights.

“The idea that we were trying to enrich ourselves is totally false,” Sarvis said.

In a redevelopment district, a special fund of tax money is set up to pay for improvements in the district, typically by selling bonds. The bonds are repaid from enhanced property taxes that are earmarked for the district.