Insurer Pulls Out of Warner Ridge Project

The expected main tenant of the planned Warner Ridge office complex announced plans Monday to move elsewhere, clouding the future of one of the most controversial developments in Los Angeles history.

The pullout by 20th Century Industries raises questions whether the developers will be able to carry out plans for three mid-rise office buildings and 125 condominiums on Warner Ridge, which homeowners and city officials have fought in a battle that goes back eight years.

The struggle helped destroy the political career of West San Fernando Valley Councilwoman Joy Picus, who was defeated for re-election after she was blamed for pushing the rest of the council into a losing battle that cost the city at least $4.7 million.

After a series of courts ruled against the city--agreeing with the developers that the city was twisting the law to block the project to appease anti-development homeowners--the council gave in, agreeing to an expensive settlement.

Warner Ridge Partners, the development firm, declined comment Monday on the 20th Century withdrawal, said the firm’s attorney, Robert McMurry.

However, Jack Spound, one of the top figures in the partnership, had previously described the participation of the insurance company as critical to the financial viability of the project.

“In court documents, the developer has told the courts that 20th Century was their only client and if (20th Century) pulled out they would have no project,” said Robert Gross, president of the Woodland Hills Homeowner’s Assn., the most determined foe of the project.

The insurance company announcement that “it will not be occupying new corporate headquarters in the Warner Ridge development” also leaves hanging another controversial project--the scheduled transfer of 425,000 cubic yards of topsoil from Warner Ridge to the adjacent farm at Pierce College, which was to receive $1 million in desperately needed cash from the deal.

20th Century Senior Vice President Richard Dinon said the company would not comment on its motives for withdrawing from the $150 million complex, on which construction was scheduled to begin Dec. 15.

The insurance company, one of the state’s largest, had stated in court documents earlier however that it would back out of the deal if the construction schedule lagged. The company’s lease on its current facility in Warner Center expires in November, 1995, and it must move its 2,400 employees to new offices before then.

20th Century has not chosen an alternate site. “The company has established an internal committee to evaluate alternatives, including different sites, and select the best location for our new headquarters office,” according to the statement faxed late Monday.

As envisioned, Warner Ridge would eventually include 125 condominiums and five office buildings, three of which were to be built by June, 1995.

The project was proposed for the 21.5-acre Warner Ridge in 1985, and drew strenuous opposition from the Woodland Hills Homeowner’s Assn., which argued that such a massive development would clog traffic on De Soto Avenue.

After the proposed development was modified several times, the Los Angeles City Council tried changing the zoning of the area in an attempt to scuttle the project. But the developer sued the city and eventually won the right to build 690,000 square feet of office space and condominiums, as well as exemptions from $4 million in city fees. The city’s legal expenses were estimated at $700,000.

Homeowners and agriculture activists responded by filing lawsuits challenging the stated environmental impact of the project and the topsoil transfer, which further delayed construction.

As recently as last month, Warner Ridge Partners was scrambling to secure a last-minute loan to finish grading and begin construction.

Despite the apparent stumbling block for the Warner Ridge development, opponents of the project were hesitant to declare a victory Monday.

“We don’t know what’s going to happen next,” Shirley Blessing, a director of the Woodland Hills Homeowner’s Assn., said after learning of the decision by 20th Century. “I can only hope that maybe now the homeowners, the city and Warner Ridge can go back to the drawing board to find something that is more acceptable to everyone.”

Gross said the homeowners group was willing to support a project that consisted of 471,000 square feet and adhered to a three-story limit.

“If they’re willing to settle for a lesser project, then everything would go away,” Gross said. “The ball is in their court.”

In the meantime, the group will pursue a lawsuit filed against the city because it provided Warner Ridge with entitlements to build the office complex.

A state Court of Appeal hearing scheduled for Wednesday has been continued until Feb. 8 by court officials to review the claims made by the homeowners group, Gross said.

“I think it’s a victory for the community if 690,000 square feet of commercial office space does not go in,” said Gross, of the homeowners association, which represents about 450 homeowners.

“Still, we want it resolved. We hope the developers find a client that will be happy with a lesser project,” Gross added.

Times staff writers John Schwada and Chip Johnson contributed to this story.