Officials Sought Favors, Say Developers : Lawsuit: Mayor and councilman deny allegations that they requested contributions for political campaign, then voted against subdivision when group turned them down.

A development group that sued Diamond Bar earlier this year is now accusing the mayor and a council member of applying pressure for political favors before voting down its plans for a 57-home subdivision last November.

Diamond Bar Associates Inc. (DBA) sued the city in February, alleging that the council unjustly denied its application for the subdivision. Council members said the development group never turned in required studies showing the slopes it planned to build on could support large luxury homes.

DBA amended its suit recently to include allegations against Mayor Pro Tem Phyllis Papen, who waged an unsuccessful campaign last year for a state Assembly seat, and Mayor Gary G. Miller.

DBA alleges that Papen and Miller opposed the subdivision after DBA officials refused Papen’s request last year for a $10,000 donation to her state Assembly campaign. The suit also asserts that Miller urged DBA to hold a benefit to raise $20,000 for Papen, and asked DBA to make up the difference if donations didn’t amount to that.

DBA’s suit asks for $34 million in damages, alleging it cannot make money on its planned 73-acre subdivision. The property lies in south Diamond Bar, just north of Tonner Canyon and next to a rural, gated community of estates called The Country.

Miller denies DBA’s allegations.

“I guess you can accuse anybody of anything,” Miller said of the DBA suit. “I never asked them for anything.”

Papen was on vacation and could not be reached for comment. But attorney Robert Owen, whose firm is representing Diamond Bar in the DBA case, said Papen has also denied the allegations.

“The allegations are all totally false,” Owen said. “The developers really want to get this project approved and they’re trying to put some heat on the council.”

The lawsuit also alleges that Miller encouraged DBA to sue several Diamond Bar citizens who, at the time the development group was asking for council approval of its housing project, were threatening to organize a recall campaign against council members.

The citizens are members of an organization called Diamond Bar Citizens for Country Living, which for a year has threatened to wage a recall campaign against the council, saying members lean too far in favor of development. The same group successfully forced a referendum this year to annul the city’s general plan, which is being revised.

The citizens group has opposed DBA’s Diamond Ridge project because it would require removal of more than 1,000 trees, including walnut and oak trees.

DBA officials say they never met any of Miller and Papen’s alleged demands.

“There’s a limit to what we can comply to,” DBA President Jack C. Cameron said. “It’s one thing when someone asks a developer for (money) for a council office, but this was $20,000 for a statewide office. We don’t care if (Papen) is running for a state office.”

Cameron said that before DBA rejected the request for donations, there was little opposition at City Hall to the Diamond Ridge subdivision.

But city officials say the subdivision was denied simply because DBA officials missed several deadlines to turn in soil studies showing that the sloped terrain could support their planned 5,000- to 12,000-square-foot homes. The average cost of the homes would be more than $1 million.

In all, the planned Diamond Ridge project includes three subdivisions, two of which have already won council approval.

One of the approved subdivisions is owned by DBA; the other, DBA and city officials say, is owned by former Diamond Bar resident Alfred R. LaPeter. LaPeter, who owns about 20 acres next to DBA’s land, could not be reached for comment.

Campaign contribution reports show LaPeter and his two Bellflower businesses together contributed about $10,000 to Papen’s state Assembly campaign last April--about the same time that DBA officials allege Papen asked them to contribute $10,000.

DBA President Cameron said his group did not contribute money to Papen but gave her free use of office space last spring. The fair market value of that office space was $2,625, according to campaign contribution records.

DBA’s suit was filed in Orange County Superior Court because Los Angeles County Superior Court Judge Cecil Mills is a former DBA officer and spokesman who still holds an economic interest in the proposed subdivision.