Suit Seeks to Stop Santa Ana Arena : Litigation: The court challenge is a potential setback for the city, which had taken a lead over Anaheim in the race to build a major indoor facility.

A group calling itself Citizens Against Arena filed a lawsuit Thursday to block construction of the proposed 20,000-seat Santa Ana indoor sports arena, giving new hope to the stalled plans for a similar facility in Anaheim.

The court challenge looms as a potential setback for Santa Ana, which earlier this year had taken the lead in the race to build Orange County’s first major indoor arena when three other lawsuits were filed against the Anaheim arena.

Santa Ana Councilman Miguel A. Pulido Jr. said he was surprised that the suit was filed just 24 hours before the statute of limitations was to expire on challenges to the city’s rezoning of the arena land.

“I’d be surprised to see if there’s any substance to it,” Pulido said. “I’m unhappy that it happened but I . . . know that we took all appropriate steps in the rezoning and in the general plan amendment. I’m confident we will be victorious in court.”

Pulido said he does not expect the lawsuit to significantly delay the project, as has occurred in Anaheim.

The suit, filed in Orange County Superior Court by Citizens Against the Arena, an “unincorporated association” of residents, businessmen and property owners, seeks to nullify the Santa Ana City Council’s April 2 rezoning of undeveloped land at Edinger Avenue and Lyon Street. The property previously had been restricted to office and commercial uses.

Council members “acted arbitrarily, capriciously and beyond their jurisdiction,” according to Peter A. Seidenberg, the group’s attorney.

The Santa Ana arena is to be privately built and operated by a partnership that includes King-Guanci Development Inc. of Newport Beach, Spectacor Management Group of Philadelphia and MCA Entertainment Inc. of Los Angeles. But the lawsuit seeks to bar the city from “any steps in furtherance of planning, construction or design of the project and from allowing any city funds . . . to be used to provide operation subsidies to the arena partners.”

The city is arranging “for subsidies to the arena partners and the use of millions of the city’s funds” on the project, according to the lawsuit.

The only member of the group filing the lawsuit that Seidenberg would identify is Niles Gates, a property owner in the vicinity of the proposed arena. The other plaintiffs wish to remain anonymous for fear that “other deals” they have pending at Santa Ana city hall might be affected, Seidenberg said.

Seidenberg said his clients are not suing Santa Ana in order to gain an advantage for the Anaheim arena proposal.

“None of them have anything to do with Anaheim,” he said.

The Santa Ana plaintiffs believe an arena will hurt property values and generate additional traffic and crime in the neighborhood, Seidenberg said.

Gates and a handful of other property owners in the vicinity of the proposed arena have spoken against the proposal before the City Council and Planning Commission.