Las Virgenes Municipal Water District officials Monday night unanimously approved a controversial proposal to negotiate for purchase of land around the Westlake Village Reservoir to protect its water supply.
The water district's vote cleared the way for negotiations with the Federal Deposit Insurance Corp. for acquiring a portion of the 491-acre ridge called Westlake Vista.
The FDIC acquired the property in 1989 from Vernon Savings & Loan, a failed Dallas thrift. Since then the property has been tied up by at least two lawsuits.
The district wants about 300 acres of the land to protect its watershed and improve drainage around the 9,800-acre-feet reservoir, which provides water to the incorporated cities of Westlake Village, Agoura Hills, Calabasas, Hidden Hills and to unincorporated parts of Los Angeles County, said district spokeswoman Bobbe Wymer.
District General Manager Charles McClain sent a letter to FDIC officials May 5, outlining the district's intended use for the property.
"We are pursuing the purchase of the property for one basic reason: to protect the watershed and preserve the quality of the potable water in the reservoir," he wrote.
Acquisition of the property also will save the district millions of dollars in water treatment improvements, said Wayne K. Lemieux, an attorney who represents the district.
A portion of the remaining land could be purchased by the Santa Monica Mountains Conservancy, a state parkland agency that will work closely with the district on the acquisition of the property, said Joseph T. Edmiston, the executive director of the conservancy.
A purchase agreement also may prompt the conservancy to withdraw a lawsuit filed last July in U. S. District Court to block the land sale to the Baldwin Co., an Irvine-based developer that wants to build more than 300 luxury homes along the ridge, he added.
In its lawsuit, the conservancy contended that development jeopardized the habitat of both the Lyon's pentachaeta, an aster with wispy yellow flowers, and the Santa Monica Mountains Dudleya, a rare succulent under consideration for threatened status by the U. S. Fish and Wildlife Service.
In a separate legal battle, the Baldwin Co. filed a lawsuit in U. S. District Court in December against the FDIC, contending that the federal agency broke its contract with Baldwin when the agency refused to secure a $900,000 payment and future payments against a possible negative judgment in the conservancy lawsuit.
"We were unwilling to pay millions of dollars to the FDIC for property we could end up losing," said Bob Burns, president of Baldwin's Los Angeles/Ventura division.
The federal agency's acceptance of another bid would also violate a first refusal clause in the contract, Burns contended.
"The water district can do what they want to do," said Burns. "We have sent them notice of our claim to that property, and they know if we win this case we will divest them of the property."
FDIC officials dispute any property rights claims made by the developer.
"We never had a signed contract with them, that was one of the problems we had," said Tony Ferrulli, department head for the regional division sales center.
After the Baldwin deal fell apart, the FDIC offered the property for a 60-day period to organizations with proven track records of conservation and sound environmental practices, Ferrulli said.
Ferrulli confirmed that the water district is one of a few organizations that will be considered for the sale.
For their part, Westlake Village officials favor the district plan to acquire the property, and say the open space land use plan doesn't hinder its affordable housing efforts.