Announcement Defuses Dispute : Mission Viejo to Talk With City’s Developer

The city of Mission Viejo announced Friday that it is entering into negotiations with the Mission Viejo Co. in an effort to alleviate congestion that is expected to result from the developer’s construction of 7,000 more homes in the planned community.

The city had previously threatened to file a lawsuit against the developer to force the firm to back out of an agreement with Orange County for construction of the new homes. The October, 1987, agreement came before voters approved formation of the city of Mission Viejo. Once Mission Viejo became Orange County’s 27th city last March 31, city officials sought to put the construction project under their planning control.

Defused Week-Long Dispute

Mayor William S. Craycraft’s announcement that the city would negotiate came at a hastily arranged news conference. The announcement defused a weeks-long dispute that threatened to mire the new municipality in a costly legal battle with the company that designed and built it. Mission Viejo now has 68,000 residents.

The announcement also eased tensions between the city and developer at a time when both are preparing to take opposite sides on the city’s proposed annexation of neighboring Aegean Hills at a Feb. 1 meeting of the county Local Agency Formation Commission. The City Council has voted 5 to 0 in favor of annexing the community, which was built by another developer. The Mission Viejo Co. has steadfastly opposed the annexation as contrary to the master design of its planned community.

Divided Over Annexation

Although they are divided over the annexation, both sides expressed relief Friday that the specter of litigation had been lifted from the development agreement.

“The council wants to move forward in a negotiating mode rather than a combative mode,” Craycraft said.

Wendy Wetzel, spokeswoman for Mission Viejo Co., said, “We just hope that we can work with the mayor and City Council to help achieve some of the goals for the city. We all need to sit down.”

The optimism contrasts sharply with the mood that prevailed on Nov. 14, when the City Council, seething over the development agreement, issued the Mission Viejo Co. an ultimatum: Either back out of the agreement and fall under city planning control or face the possibility of legal action in Orange County Superior Court.

The threatened lawsuit would have challenged the validity of the Mission Viejo Co.’s development agreement approved by the county Board of Supervisors on Oct. 26, 1987. The agreement was the first of several similar contracts that the county approved in the south county before voters decided the fate of a countywide slow-growth initiative last June. The initiative, fought hard by developers, went down to a decisive defeat.

Terms of Agreement

Under Mission Viejo Co.’s agreement, the company is to spend $45 million for road construction, traffic signals and public facilities in exchange for a 10-year freeze on current zoning. The agreement includes all of the remaining residential development in Mission Viejo, which is expected to be completed by 1995. The community is now 85% built.

Mission Viejo city officials were upset over the agreement because they felt it locked them out of any residential planning for the next 10 years. Although the agreement provides for many development-related improvements, Craycraft said the city wants still more.

City officials are unhappy, for example, with the agreement’s timing for installing 10 traffic lights, Craycraft said. The mayor said the city wants that schedule speeded up. Craycraft said the city also wants more recreation facilities, such as softball fields.

After threatening litigation, the city negotiated with Mission Viejo Co. officials during December, Craycraft said. After a closed executive session Monday, the City Council directed Craycraft to meet with Mission Viejo Co. officials again this week to offer a more conciliatory tone for negotiations. Craycraft said the city decided to drop the threat of litigation after a meeting with company officials on Thursday.

Next, Craycraft said, the city will continue negotiating for concessions in the development agreement plan. The mayor, who is directing the negotiations, declined to estimate how long it would take to reach an agreement. For now, he said: “In my meetings, we are very pleased with the cooperative spirit. I’m just pleased at the positive attitude the company is taking.”