ANAHEIM : Legal Fight Clouds Melodyland Sale

A legal fight over a prime parcel of the Melodyland Christian Center complex could threaten the center’s tentative agreement to sell the acreage to the city.

Anaheim officials said Monday that they were not aware that Melodyland’s pastor, the Rev. Ralph Wilkerson, was engaged in legal proceedings with a hotel developer to regain control of a deed of trust to a 5-acre parcel. Those five acres include the three acres that the city has been negotiating to purchase.

Wilkerson has said that Melodyland is attempting to sell the property, worth about $1 million an acre, in an attempt to help pay a $4.9-million default on a loan that the church holds with the Bank of Yorba Linda.

Although the City Council is expected to resume discussions about the property acquisition today, council members and City Manager James Ruth said Monday that they did not know of the court proceedings involving the Melodyland property.

“Anything that we would buy would have to be free and clear,” Ruth said. “What disturbs me is that he (Wilkerson) never said anything about it. He can’t sell it if there is a cloud on the title.”

However, attorneys for both Melodyland and the developer say the legal tussle over the deed of trust should not interfere with the sale.

Court records show that Melodyland filed a $200,000 lawsuit against Nostalgia Ventures Inc. last month, asking that a Superior Court judge order Nostalgia to turn over the deed. A hearing is set for April 19.

On Feb. 19, the same day that city officials and Melodyland representatives met in an emergency session in an attempt to reach a settlement, a notice was filed with the county recorder that the property was entangled in court proceedings and that any sale would come with legal strings attached.

Nostalgia, an El Toro firm, began to negotiate to purchase the property in 1989 for development as a time-share hotel complex. The sale was never completed.

Melodyland, an Anaheim landmark serving as a charismatic worship center across Harbor Boulevard from Disneyland, contends that the church owns the deed and disavows any financial obligation to Nostalgia.

Don Wall, Melodyland’s attorney, said the church agreed to sell the property to Nostalgia in December, 1989. As part of that agreement, Nostalgia advanced the church $200,000 as an earnest money deposit, secured by the deed to the property, he added.

Under the agreement, Melodyland was not required to refund the money, Wall said, unless the church broke the terms. “It’s the church’s position that there is no obligation to repay the money,” he said.

However, Paul Brennan, attorney for Nostalgia Ventures, said: “We wouldn’t have taken security through a trust deed if we didn’t want our money back.”

The sale was unsuccessful, in part because a building moratorium imposed by the city last year prevented construction on property in the Disneyland area, Brennan said.

The city initially was interested in the property to provide additional parking space for a fourth expansion of the convention center complex. The city must show that it can accommodate an additional 1,200 vehicles before expansion can begin.