Firm’s Goodwill Claim Against City Denied : Lawsuit: The owner of the Harbor Drive-In and Swap Meet is not owed money for loss of business goodwill in Santa Ana’s acquisition of the 22-acre site, a judge rules.

Pacific Theatres has lost a $4.4-million claim against the Santa Ana Redevelopment Agency stemming from the city’s acquisition of a 22-acre site that once featured a swap meet and the highest-grossing Spanish-language drive-in theater in the world, Assistant City Atty. Robert J. Wheeler said.

A Superior Court jury has ruled that the owner of the Harbor Drive-In and Swap Meet was not owed any money for the loss of business goodwill, Wheeler said. Goodwill refers to benefits that come to a business as a result of location, reputation or other factors that help retain or attract patrons, he said.

“This is a stunning victory for the Redevelopment Agency,” Wheeler said, adding that he believes that it was the largest case on the issue of lost business goodwill to go to jury trial in the state since a comprehensive eminent domain law was enacted in 1975.

Had the Redevelopment Agency lost the lawsuit, Wheeler said, the $4.4-million claim plus interest, appraisals and legal fees could have cost the city up to $8 million. At one point, he added, the agency offered to pay about $2 million to settle the case.

The drive-in theater had operated on the property--on the southeast corner of Harbor Boulevard and McFadden Avenue--since 1959 under a 99-year lease. In 1986, the Redevelopment Agency filed suit to acquire the property through eminent domain in order to clear the way for a shopping center project that never materialized.

A document filed with the court showed that before the start of the trial, the Redevelopment Agency paid $12 million to acquire the land from its owner, Masako Nakamura, and Pacific Theatres.

But beyond the payment for the land, Wheeler said, the theater owners claimed that their business was hurt by the move and sought $4.4 million in additional compensation.

Wheeler argued that the theater owners did not attempt to relocate to other available sites in Santa Ana in order to maintain their business goodwill. Instead, the Harbor swap meet merged with the Orange Drive-In and swap meet, a move that the city claimed helped, rather than hurt, the enterprise.

James V. Selna, attorney for Pacific Theatres, was unavailable for comment.