Mola Election Offer Generates Questions : Development: The company wants Seal Beach residents to vote on the fate of a project and is willing to bankroll the process. The secretary of state’s office says the action would be unprecedented.

The California secretary of state’s office has raised questions about the Mola Development Corp.’s offer to pay for a special election in which voters here would decide whether a controversial housing project should be built.

Through a citizens group that it supports financially, Mola has offered to pay the $50,000 cost of the special election. At issue would be the fate of the corporation’s $200-million Hellman Ranch development.

Such an action would be unprecedented in California, said Tony Miller, chief deputy secretary of state. He said he does not know of any legal authorization for a private entity to directly or indirectly pay for an election.

“He who pays the piper calls the tune, or so the theory goes,” Miller said, whose agency also functions as California’s chief elections office. “It is important that people have confidence in the integrity of the system, and if one of the partisans is paying for it, then that undermines the credibility of the process itself.”

Mola’s tactics might seem unorthodox, but supporters of the 329-unit project say the developer has been left with little choice. Mola has been working with the city for five years to build the project and has met every City Council request. But after a newly seated council rejected Mola’s latest proposal in June, the developer sued the city and turned to the ballot box.

“We’re not quitters,” Mola spokesman Kirk Evans said. “We have invested over five years and $11 million in this project and we think it’s good for us and good for the city. . . . Mola sees itself as kind of the champion of the residents being bullied by the council majority.”

The path of Mola’s 149-acre project has been a tortured one, marked by courtroom battles and council votes taken as dawn approached.

Mola’s plans for development were on track until last year, when the Wetlands Restoration Society took a novel approach to try to stop the project. The group claimed that because the council approved the development while the city’s state-required housing plan was obsolete, the approval was invalid. A Superior Court commissioner agreed, setting off a mad rush at City Hall to update the housing plan and reapprove the Mola project before the spring election, when two council seats were up for grabs.

The Planning Commission and City Council held lengthy meetings, at least one of which lasted until 4:30 a.m., to try to push the project through before new council members were seated. But raucous crowds filibustered until the council missed a crucial midnight deadline and the effort failed. After the May 8 election, the newly seated council rejected the project by a 3-2 vote, saying it feared that an earthquake fault beneath the property rendered it unsafe for development. The swing vote was newly elected Councilwoman Gwen Forsythe, who helped draft the project as a Planning Commissioner but changed her mind after winning a council seat.

The developer sued the city, claiming that it had discriminated against Mola by rescinding its approval.

Despite the drama of the past year, having the Mola-sponsored committee pay for the election is raising some eyebrows around town.

“It seems to me that people might say, ‘What is this? Mola is buying an election?’ ” Councilwoman Marilyn Bruce Hastings said after learning of the offer.

Councilman Joe Hunt, a supporter of Mola’s plan to build houses on the Hellman Ranch property, said he sees nothing wrong with the company paying for election costs and compared it to someone paying a fee when applying for a change in zoning.

“In this particular case, Mola wants an election. We can’t charge them for it,” Hunt said. “But if they offer to pay for it, my goodness, why not accept it rather than having the taxpayers pay for it?”

The plan’s fate will now be decided by voters as a result of efforts by Mola-backed Seal Beach Citizens for Parks, Open Space and Responsible Government. The group formed last summer and drew many former council members. With $90,000 in cash and services from Mola, about 150 supporters collected enough signatures to force an election.

But because of a technical error, the committee’s petitions failed to request a special election, meaning the City Council could wait until the next scheduled general election in 1992 to put the measure on the ballot.

Arguing that the city is losing $57,000 each month the project is not approved, the committee offered last week to pay for the election if the council sets an election date at its meeting Monday.

If the council waits until its Feb. 25 meeting to set an election date, the committee would contribute $25,000 toward the election. If the council fails to set an election date by the end of February, group leaders say they will sue to force an election.

The project’s supporters and building industry officials say the developer’s concessions to the city are almost unprecedented, going above and beyond what the law requires and what most builders offer cities.

Hoping still to settle the matter, Mola last month offered to drop the lawsuit, donate another $750,000 worth of parkland and defend the city against other lawsuits if the council approved the project. The council rejected the offer.

“At the time, I strongly opposed the project that Mola had on the table,” Hunt said. “But when Mola came in and offered $1 million if we would support their plan, I lost my argument, so consequently I supported the 355-unit proposal, which ultimately turned into 329 units.”

Councilman Frank Laszlo, a vocal opponent of the plan, acknowledged that Mola has tried to work with the city but said he has concerns about the project’s safety.

As the Mola project debate has dragged on, many residents have grown angry and irritated. In letters to local newspapers, some praise the project for financial and environmental benefits it will bring the city. Others, including some who once supported the plan, call Mola a “bully” and talk of ways to run the company out of town and force it to drop its proposal.