Developer, Whittier to Split $2.4 Million in Extra Shopping Center Costs

City officials have agreed with a developer to split about $2.4 million in unplanned costs of the proposed Whittier Station Center, a much-debated shopping center opposed by historic preservationists, American Indians and enraged motorists.

The agreement eliminates the reason for a potentially costly lawsuit filed last month by the Encino-based developer Urbatec against the city.

In the lawsuit, Urbatec had accused the city of violating its agreement to provide the developer with the 16-acre triangle of land northwest of the city center.

City officials, in turn, said the developer is responsible for delays that increased the city’s costs by about $2.4 million. City officials said the costs for land the city bought and for the overall project increased by the time Urbatec provided the $12.5 million that had been agreed on. The city also underestimated the cost of relocating businesses from the site.

The agreement, approved by the City Council last week, gives both sides what they want most. Urbatec gets the go-ahead to take possession of the land by Nov. 1 to begin construction well before year’s end.

The city lightened its financial burden for a project that proved more expensive than anticipated. The developer will foot the costs of putting utility lines underground and relocating storm drains. In addition, Urbatec will contribute about $1.2 million for the city’s unexpected costs.

The developer was not legally obliged to pay more merely because the city had underestimated how much the project would cost, company attorney Mark S. Novak said.

Nonetheless, city officials presented the company with a choice, Novak said. “Do you want the project or do you want a lawsuit?”

Urbatec chose the project, Novak said.

Varied citizens groups would have preferred otherwise. Preservationists have opposed the shopping center because it would displace a 100-year-old train depot.

City officials agreed to save the depot by moving it to an empty lot about a quarter-mile away, but the move could permanently strip the depot of its status as a national historic landmark.

A group of local Indians also sought to stop the project. They say an Indian burial ground is at the site. The city has invited an archeological firm to bid on a study of the area.

Should a burial ground be found, which city officials say is unlikely, the project could be further delayed.

Finally, local motorists were enraged to learn recently that the development would result in a permanent closing of Magnolia Avenue between Whittier Boulevard and Hadley Street.

About 130 people crowded into Tuesday’s public City Council hearing on closing the street. The comments ran more than 3 to 1 against the idea before the council approved the closing, 3 to 2.

Abandoning that section of road will effectively eliminate a popular north-south shortcut between Beverly and Whittier boulevards. Leaving Magnolia alone, however, would have nullified Urbatec’s city-approved design.

At the hearing, speakers complained of the timing. “Why is this hearing being held now, rather than a year and a half ago, or two years ago, or three years ago?” resident Charles Hanson asked.