SANTA ANA : College Drops Suit on Redevelopment

After several weeks of negotiations, the Rancho Santiago College District has decided to drop its lawsuit challenging Santa Ana’s South Harbor redevelopment plan.

The district’s board voted Wednesday to drop the suit in exchange for the Redevelopment Agency’s promise of payments to the college district of about $87 million over the life of the project.

Under the agreement, the college district will also receive $1 million for a fire-training building at Centennial Regional Park and $8 million toward a new education building and parking lot at the Santa Ana campus.

City and district officials said the lawsuit was essentially a tool to strengthen Rancho’s bargaining position in negotiations for its share of the money generated by the redevelopment project, which encompasses about 1,000 acres around Harbor Boulevard.

The suit, filed Aug. 20 in Superior Court, challenged the plan and contended that the city’s Redevelopment Agency should have prepared an environmental impact report. The project could not proceed without resolution of the suit.

The primary sticking point between the city and district during the negotiations was what portion the district should receive of the $2.5 billion that the project is expected to generate over 40 years, said Bob Hoffman, city redevelopment and real estate manager.

Negotiations were needed to arrive at a figure between 3% and 4% of the additional property tax revenue expected from the project.

Under the terms of the agreement, the district will receive 3.6% of the additional revenue generated during the course of the 40-year project.

Hoffman said Thursday that city officials were pleased to resolve the suit. “Throughout these negotiations, (we) have been very concerned about keeping a partner relationship intact with local school districts,” he said. “That’s important to the long-term success of the city.”

He said the Redevelopment Agency is expected to give final approval to the agreement on Sept. 15.

On Thursday, college district board member Charles W. (Pete) Maddox praised the agreement, saying that “it solidifies our relationship with the city and puts us in a mode of cooperation instead of a mode of confrontation.”