The Loser in Cypress Vote to Press Suit : But Mayor Pro Tem Offers Talks for Less Controversial Project

Officials of Hollywood Park Realty Enterprises Inc., the losers in Cypress’ special election Tuesday, vowed Wednesday to pursue a $125-million lawsuit against the city, but the mayor pro tem said he hopes to come up with a compromise plan to avert that suit.

Hollywood Park hopes to recoup legal fees spent and money lost from a proposed sale of its property around the Los Alamitos Race Course, company spokesman Donald M. Robins said. That sale had been contingent on voter approval of a zoning change for the property to allow the development of Cypress Downs, a business and recreation complex.

But Mayor Pro Tem John Kanel said he will propose at a Feb. 27 City Council meeting that a committee be formed of residents, city officials and Hollywood Park representatives, who would formulate a less controversial plan.

‘Real Talking’

“We need to sit down and do some real talking,” Kanel said.

Hollywood Park representatives are interested in such talks, said company official Marjorie L. Everett. But a lawsuit still will be pursued, she said, because of the company’s financial responsibility to its shareholders.

A leader of the community group that helped defeat the zoning change Tuesday said the Feb. 27 meeting should emphasize community participation.

“We definitely want to see upgrading at the race track,” said Joyce Nicholson, president of Concerned Citizens of Cypress for Greenbelt and Open Spaces Preservation. But “we want the community to have a say.”

Nicholson said she would like to see a golf course, cultural arts center, sports complex and hotel built on the property.

Cypress Downs would have included a business park, office complex, a hotel, retail and commercial shops, and 31 acres for churches and schools on one of the largest remaining open spaces in northwestern Orange County.

Hollywood Park initially filed its federal lawsuit in Los Angeles on Oct. 27, 1987, after the City Council rescinded a zoning change that would have allowed a business park development on land designated for public or semipublic use.

The lawsuit sought $125 million in damages as a result of losses incurred when the company could not sell its property to SDC Co. of Newport Beach, as planned.

That same year, the company filed another lawsuit challenging Measure D, an initiative requiring a public vote on any zoning changes on land that had already been designated for public or semipublic use. As a result of that lawsuit, Orange County Superior Court Judge Tully H. Seymour said that the council should not have rescinded the zoning change and ruled that Measure D as applied to this case was invalid. The city appealed the ruling.

Company and city officials agreed to drop all litigation if voters in Tuesday’s special election approved SDC’s development plans.

But the plan was soundly defeated by a vote of 6,061 to 3,043.

Consequently, the city’s appeal is pending, City Atty. Jerry M. Patterson said. “It will continue to be processed.”

SDC Co. spokesman Jim Watson said that the city is the real loser because it faces huge legal costs and a possible judgment.

“I think the city has a tough challenge ahead of them, which means the citizens are going to suffer,” he said. “Hollywood Park is forced into a box to pursue litigation.”

SDC has several projects under way in Southern California, totaling about 2 million square feet.

“We move on,” Watson said. But the loss was “obviously a disappointment.”