Developer Wins $1.5-Million Settlement Against Burbank

The Burbank City Council has awarded $1.5 million to a developer who charged in a lawsuit that the city illegally backed out of a complex deal to assist him in building an office-retail building.

The decision Tuesday night to pay the settlement marked the conclusion of more than a year of bitter wrangling between the council and developer Thomas Tunnicliffe. It also appeared to heighten already tense relations between Councilman Tim Murphy and his colleagues.

In a heated session, four of the council members blamed Murphy and former council member Mary Lou Howard for the legal fight, saying they put the city in financial jeopardy by reversing their apparent approval of Tunnicliffe’s project in September, 1990.

A later change in their vote effectively killed the project and violated a good-faith agreement, the four council members said.

“This was a case of government at its worst,” Councilman Tom Flavin said. “I’m disgusted that this ever occurred.”

Councilman Bob Bowne said that he predicted dire legal consequences would result from the reversals.

“It’s painful to write this check, but with the risk of significant liability to the taxpayers, this is the prudent thing to do,” Bowne said. He added that several judges and attorneys had advised the city to settle the case because the city stood a significant chance of losing if the case went to trial.

Murphy and Howard both maintained that they had never totally supported all the transactions necessary to make the deal go forward. The two, who claimed other council members were philosophically opposed to them because of their support of planned growth in Burbank, said there was a breakdown in communication on the council.

In an interview Wednesday, Tunnicliffe said he was pleased with the settlement.

“Justice has been served,” he said. “I think the citizens of Burbank owe a great deal to those members of the council who were willing to step up to the plate and resolve this issue.”

Tunnicliffe’s proposed project was a three-story building at Angeleno Avenue and San Fernando Road. He owned one-third of the site. Another third of the site was occupied by a building owned by Martin Stayden. The remaining third was a city-owned parking lot.

The council, acting as the Redevelopment Agency, approved an agreement with Tunnicliffe in 1988 to help him develop the property. The details of the transactions were to be worked out in the future, officials said.

In a closed session in September, 1990, the council authorized a complicated transaction to acquire Stayden’s property and then sell it to Tunnicliffe.

Tunnicliffe said he then began making business and financial arrangements for the deal to proceed.

But the following month, Murphy and Howard voted publicly against a proposal for the Redevelopment Agency to purchase the city-owned parking lot. Howard said she believed the agency was planning to donate the lot to Tunnicliffe with asking for payment.

“I was not opposed to the project, but I felt he should pay for the parking lot,” she said.

That transaction was pivotal to the completion of the city’s agreement with Tunnicliffe, and the project collapsed, officials said.

Believing the city had backed out after giving him the go-ahead, Tunnicliffe filed a lawsuit seeking $10 million in damages.

“The good-guy realtor won,” Tunnicliffe said. “The citizen can fight the government and win.”