After 7-Year Battle, Industry Developer Wins Right to Build

For the last seven years, Francis Chan has fought the city for the right to develop property owned by his family and to participate in what he hopes will be a lucrative redevelopment project.

Last week Chan got what he wanted, and more.

The City Council on Thursday approved an agreement that will allow him to build a shopping center on his land north of the Pomona Freeway opposite the Puente Hills Mall and give him the opportunity to buy adjacent land and develop it with a partner.

The city’s stance was far different seven years ago. At that time, the city tried to condemn his land and exclude him from the redevelopment project. But Chan went to court and apparently became the first property owner in the city’s history to block a city condemnation suit.

Now, he will be able to develop his 29-acre parcel on the north side of the Pomona Freeway and purchase, through a joint venture with the Orange-based firm of Dicker-Warmington Properties, 37 acres of land adjacent to his property. That land is owned by the Industry Urban Development Agency (IUDA), the city’s principal redevelopment arm.

Chan’s firm, American Industrial and Commerical Developers Inc., and Dicker-Warmington have agreed to buy the 37 acres for $10.8 million over a five-year period.

One hurdle remains: Zoning of the 66 acres must be changed from industrial to commercial. Chan’s attorney, C. Edward Dilkes, said city officials have indicated that they are prepared to approve the zoning change so construction can begin on the one-story shopping center, which will cover more than 300,000 square feet.

Chan, who was reached by telephone Thursday, refused to comment on the council’s action. But Dilkes, said, “Chan thinks he won exactly what he was entitled to”--his right to develop his own property.

“Everybody wins,” Dilkes added. “The city is getting a tremendous resource” in a commercial development that will generate much-needed tax revenue.

City Atty. Graham Ritchie said approval of the project is neither a defeat nor a victory for the city, “just a good business decision.”

The action ends a court fight that began in 1978 when the city attempted to condemn and purchase the Chan parcel. Both sides also have agreed to drop civil complaints filed against each other and abide by a 1982 Los Angeles Superior Court ruling under which the city’s condemnation suit was dismissed. The city had appealed that decision.

At issue in Chan’s fight was his right to participate in redevelopment of the Gale Avenue Corridor, located between Fullerton Road and Azusa Avenue.

Under California redevelopment law, the owner of a property condemned by a redevelopment agency must be given a chance to qualify as a participant in a redevelopment project. If a city, rather than a redevelopment agency, condemns a property for public use, there is no requirement that the property owner be allowed to participate in the development.

Los Angeles Superior Court Judge Jack W. Swink ruled in February, 1982, that the city and the redevelopment agency had not given Chan proper opportunity to participate in the project.

In the court fight, Chan’s attorney, Dilkes, had charged that the city conspired to keep Chan out of the project because city officials favored another developer, Majestic Realty Co. The accusation was based in part on a letter written by Ritchie on Feb. 20, 1978, expressing the redevelopment agency’s decision to condemn and sell the land to Majestic, represented by Edward P. Roski Jr.

But Swink ruled that there was no evidence to prove such a conspiracy.

Dilkes said during the trial that it took one year for the agency to provide owner-participation information to his client. Plans submitted by Chan to the agency were not processed, and every application for a building permit was rejected by the city, he said.

When the suit was originally filed, Chan said his family bought the land because it seemed perfect for a 200,000-square-foot warehouse for his furniture business.

Chan attempted to sell his property for $7.5 million when development of his property seemed hopeless. But the sale fell through, Dilkes contended, when the city threatened to condemn the property. The city later offered to buy the parcel for $1.3 million, he said.

Richard Richards, a former state senator and attorney for the city in the case, argued that Chan could have sold his property at any time.