Zoe Suit Accuses Oxnard of Plot : Homeless: The shelter says that a false city environmental report cost it $2.1 million in grants and was intended to shut it down.

Ventura County’s only year-round shelter for homeless families sued the city of Oxnard on Wednesday, accusing officials of plotting to shut down the facility.

The suit, filed by operators of the Zoe Christian Center, says the city cooked up a false environmental report that resulted in the denial of more than $2 million in government grants. The suit seeks more than $35 million in damages on behalf of the center and an estimated 4,000 homeless residents of Ventura County.

Among other things, the suit alleges that city officials discriminated against the private, nonprofit agency because it is operated primarily by blacks and because it serves mostly African-American and Latino clients.

Oxnard Assistant City Atty. Paula Kimbrell said she had not heard of the lawsuit and had no comment. But Councilman Michael Plisky denied the allegations.

“Nothing Zoe does makes sense,” Plisky said. “They don’t have money to run their business, but they have money to hire attorneys. I think that says as much as you can say about their financial management skills.

“We’ve done as much as any city could be expected to do to help a nonprofit organization,” Plisky said. “They just can’t get it together.”

In May, the center’s financial problems prompted United Way of Ventura County to stop funding the facility at 605 S. Rose Ave.

In recent months, the center has raised rents and required residents to do chores in an effort to ease its budget crisis. The measures led to a decline in occupancy at the shelter, which has the capacity for 180 residents but housed about 50 Wednesday night.

The suit, filed in Ventura County Superior Court, says Zoe’s problems began in June, 1988, when the Oxnard Fire Department issued a report contending that the center was located too close to a yard where hazardous materials were stored. The report was “intentionally distorted,” the suit says, “to create the false impression that there were environmental concerns associated with the site.”

City officials then slandered the agency, the suit says, by disseminating the report to various government agencies to discourage the agencies from providing grants to Zoe, the suit says.

As a result, the suit says, the homeless shelter was denied a total of $2.1 million in grants by federal and state agencies, Ventura County and all 10 cities in the county.

The actions were taken “with a conscious intent to . . . harm Zoe and undermine and interfere with Zoe’s ability to function as a homeless shelter,” the suit says. It accuses the city of trying to squelch competition because, the suit says, the city wants to build a homeless shelter that it would operate, possibly in conjunction with other cities in Ventura County.

The suit also accuses the city of violating racial discrimination provisions of the federal Fair Housing Act. By conspiring to prevent Zoe from getting the grants, the city was denying housing to the blacks and Latinos who, the suit says, make up most of the county’s homeless population.

Joining Zoe in the suit is Maria Leyva, whom the suit identifies as a homeless Oxnard woman “acting on behalf of . . . the homeless of Ventura County.” The suit estimates that about 4,000 homeless people live in the county and it asks that the court designate the suit as a class action on their behalf.

In addition to the city, defendants include Plisky, Mayor Nao Takasugi, Councilwoman Geraldine Furr and City Atty. Gary Gillig.

Council members Manuel Lopez and Dorothy Maron, who have supported Zoe in council discussions, were not named in the suit.

Maron on Wednesday declined to comment on the specific allegations of the suit but said city officials “could certainly have been more helpful and they weren’t.” For example, she said, the city probably could have resolved its concerns about hazardous materials before they resulted in the loss of grants.

“My feeling has been that the city’s inclination was not to help them, and hope they would go away,” Maron said.

She praised Zoe for taking on “the responsibility of this city and other cities for the homeless problem. I think they have done a very good job. They are good people who wanted to help solve the problem.”

Zoe’s attorney, Alan M. Horwitz of Camarillo, declined to comment on the suit, as did the Rev. Jim Gilmer, a Zoe official.

Times staff writer Fred Alvarez contributed to this story.