Santa Ana Says Latest Legal Delay Could Doom Arena : Development: City fears two-week timeout will upset game plan to beat Anaheim on building indoor sports facility.

A court hearing on a challenge to this city’s proposed indoor sports arena was delayed Thursday, a development which the facility’s builder says may cripple sensitive negotiations with professional basketball franchises and potentially doom the $70-million facility.

Superior Court Judge William Rylaarsdam continued the case for two weeks at the request of Citizens Against the Arena, a group of residents and business operations that has sued Santa Ana and the arena developer.

In an affidavit, developer Anthony V. Guanci, president of King-Guanci Development Inc. of Newport Beach, argued against the continuance, referring to the “race” to build an arena before a similar facility is erected in Anaheim. Anaheim city officials recently settled out of court three lawsuits filed by opponents to their arena.

“In order to successfully compete with a potential arena in the city of Anaheim, the next 30 days along this critical path are extremely significant to the success of the arena and the city of Santa Ana,” Guanci wrote in his May 23 declaration.

Guanci could not be reached for comment Thursday, but he wrote in his declaration that any delay of Thursday’s hearing “may well impede and/or prevent substantial financial and manpower commitments” of King-Guanci, National Basketball Assn. and National Hockey League teams to the Santa Ana arena.

“If this lawsuit is not handled expeditiously, King-Guanci may well be precluded from securing the commitments from others necessary to make the Santa Ana Arena a reality,” Guanci wrote.

In his declaration, Guanci said his firm is “negotiating the placement of almost $80 million in construction funds to assure completion of the arena for the 1992 NBA season.”

Guanci also declared that his company has signed confidentiality agreements with NBA and NHL franchises, prohibiting him from revealing which teams “are negotiating to relocate to Santa Ana from their current cities.”

Citizens Against the Arena sued Santa Ana and the developer on May 3, challenging the City Council’s approval of a general plan amendment that permits construction at Edinger Avenue and Lyon Street.

However, Bob Hoffman, Santa Ana redevelopment and real estate manager, said Thursday the city was “encouraged by the judge’s comment this morning. . . . He believes the public interest dictates that the matter be disposed of quickly.”