Big Bill for Santa Ana’s Idle Arena Plan Waits in Wings : Development: The city is expected to walk away from the project, but not before coughing up at least $500,000 in expenses.

By most accounts, the proposed 20,000-seat Santa Ana sports arena project is dead.

A poor economy, the reluctance of professional sports teams to relocate to Orange County, and a competing arena nearing completion in Anaheim are three good reasons not to build in Santa Ana, according to the development partners.

But at City Hall, Cindy Nelson, executive director of community development, says the project is not officially ended until the developers ask that their preliminary planning expenses, currently estimated at over $500,000, be paid.

“I guess I am always the eternal optimist,” Nelson told the City Council at its meeting Monday. “There really is no activity. They have not abandoned the project . . . they are still monitoring the market.”

It’s a ticklish issue two weeks before the city election, since one mayoral candidate, Councilman John Acosta, has been predicting for some time that the city would end up losing the expense money on the speculative project.

No municipal funds have been spent yet. But according to an agreement between the city and the development group approved two years ago, the city’s Redevelopment Agency could be responsible for reimbursing the private partnership up to $500,000 in planning costs if the $85-million project is determined “not viable by the developer.”

Both sides agreed long ago that construction of an arena would not begin without a firm lease commitment from a professional basketball or hockey team.

As recently as May, Anthony V. Guanci of the Orange County Arena Partnership said it was possible to attract a team. Then last week, an official with another partner, Spectacor Management Group, said the arena “is a no-go issue.”

Peter Luukko, Spectacor’s southwest regional vice president, said last week that the private group expects to have its bills paid by the city. “We have been submitting them all along,” he added. “We will probably reconcile that account.”

But Nelson told the council on Monday that while the agency was “monitoring” the expenses of the developers, “they have not officially declared the project abandoned at this point.”

At Tuesday’s Redevelopment Commission meeting, Nelson said the bills submitted by the group totaled more than $500,000, and the staff was auditing the expenses to determine which are valid.