Judge Takes Issue With Suit to Block Disney Deal

A Los Angeles Superior Court judge Friday questioned the validity of an MCA lawsuit that seeks to block a retail-entertainment complex in Burbank proposed by Walt Disney Co.

Judge Warren H. Deering and MCA attorney Gregory Stone argued several points during a hearing on the suit filed against the City of Burbank. Deering is considering a motion by Burbank to dismiss the suit on grounds that it is not valid.

Despite the exchanges with Stone, Deering did not rule on the motion nor say when he would. He said he wanted to evaluate other evidence, including a videotape of a presentation by Disney at a Burbank City Council meeting in May.

Stone argued during the hearing that Burbank’s tentative agreement with Disney for the development of the “Disney-MGM Studio Backlot” should be invalidated. He said the city failed to determine the adverse environmental impact of the project, as required by state law.

Environmental Impact

‘At no time did the city say, ‘What are the environmental impacts of an entertainment complex as opposed to other proposals?’ ” Stone said.

But Deering contended that the agreement merely allowed the city and Disney to negotiate “in good faith” and that no firm contract had been signed. He said an environmental impact report was not required because specifics of the project had not been determined.

When Burbank approved the May agreement with Disney, it gave the company up to a year to draw up specific plans.

During the hearing, Stone also said the agreement was unlawful because of the city’s “waste of taxpayers’ funds.” He said the city already had agreed to sell Disney 40 acres of redevelopment property for $1 million, which Stone said was far below fair market value.

He said the exclusive agreement also tied up the property for a year, preventing other developers, including MCA, from making development proposals for the site. MCA has repeatedly stated that it was never given the opportunity to bid against Disney.

‘Handcuffed’ Option

Deering argued that the agreement was necessary so both parties could concentrate on negotiations. He said governments had to have such agreements when considering such proposals, “or else they would be handcuffed.”

Attorney T. Brent Hawkins, who represented Burbank at the hearing, said the nature of the agreement was not to sell the project site but “simply to conduct negotiations.”

Disney officials want to build a multimillion-dollar complex with shops, theaters, restaurants, a ride taking passengers through re-creations of famous movie scenes and a hotel.

The Burbank City Council is scheduled to hear more specific details of Disney’s proposal in May.

Another suit filed against Burbank by MCA is also pending. That suit contends that the council, acting as the city’s redevelopment agency, violated the state’s Brown Act by meeting privately with Disney officials before awarding the tentative exclusive agreement. The Brown Act is a state law requiring local governments to act publicly on most matters.