Council, Mission Viejo Co. Settle Differences : Development: Under the agreement, the city gets $18 million in public improvements and 67 acres of land. In return, a building moratorium is allowed to lapse.

A truce has been declared in the land control war between the Mission Viejo Co. and the City Council.

This week the council initially approved an agreement that will bring the city $18 million in public improvements, donate 60 acres of company-owned land for parks, and donate 7 acres on which a new civic center complex may be built.

In return, the Mission Viejo Co. received a promise from the city not to request any more public improvements, such as park and roads fees or new stoplights. And the city’s building moratorium, which stood in the way of a million-square-foot commercial development planned by the company, was allowed to lapse by the City Council on Monday.

Upon final approval of the pact, the Mission Viejo Co. will drop a lawsuit against the city challenging the validity of its general plan, the blueprint for commercial and residential development.

“We sat down with the city and tried to resolve our problems,” Mission Viejo Co. spokeswoman Wendy Wetzel said. “We have declared peace in Mission Viejo.”

City Manager Fred Sorsabal said he understood why the company acceded to most of the city’s demands.

“This agreement gives them a clear knowledge of where they can develop,” he said, “rather than having to sue us for the right to develop.”

The pact gives the Mission Viejo Co. a clear road to cutting all ties by 1995 with the planned community the developer began building 25 years ago.

Wetzel said the agreement was “very generous” to the city.

“But this is the very last of the land-use issues,” she said. “And now we have a stable environment in Mission Viejo. This is a very big step forward.”

The disagreements began last October when the City Council approved a general plan that set aside open space on land marked for residential development by the Mission Viejo Co. The developer claimed it was entitled to build on that land because of an agreement made with the county shortly before the city’s 1988 incorporation.

The City Council countered in December by passing a building moratorium that affected company plans for large commercial development near Crown Valley Parkway.

But after a month of closed-door negotiations, the city announced the agreement at a public hearing on Wednesday.

Sorsabal, who was part of the city’s negotiating team, described the talks as quick but tough.

“These were not easy negotiations, but I think credibility and trust has been rebuilt between the city and the company,” he said. “With that trust being there, it made it easier to negotiate.”

Mayor Robert A. Curtis said that a new spirit of cooperation on the City Council, which saw three new members seated after last November’s elections, paved the way for the agreement.

“This is the first time the city has had the leadership to establish direction,” Curtis said. “We were unified in what we wanted and let (the negotiating team) know what we were looking for.”

Major points of the agreement include:

* Reducing by 371 the number of housing units the developer can build in Mission Viejo. Fewer than 400 dwelling units would be left to be built in the city under the general plan.

* The donation of 7.2 acres near Crown Valley Parkway that some members of the council favor as a site for a new civic center complex. If the council decides they want City Hall built elsewhere, the city will be able to apply the cash value of the land--about $6 million--toward the purchase of another site owned by the Mission Viejo Co.

* Dedication to the city of 60 acres of parkland, 57 acres of which are near Los Alisos Boulevard and Vista del Lago.

*An agreement by the Mission Viejo Co. to participate in the Crown Valley Corridor Program, a project that will charge businesses along the heavily traveled thoroughfare for street improvements. The concession could cost the development firm about $2.2 million.

* A concession by the developer to reserve 8 acres near Olympiad Road and Alicia Parkway for the Saddleback Valley Unified School District for three years.