Santa Clarita / Antelope Valley : Utility Files 2nd Suit Over City Redevelopment Plan : Litigation: Castaic Lake Water Agency officials say the $1-billion Santa Clarita proposal goes beyond quake rebuilding.

Four days after the city stopped competing with the Castaic Lake Water Agency to buy a water retailer--theoretically easing tensions between the two public agencies--the agency filed a second lawsuit against Santa Clarita’s $1.1-billion redevelopment plan.

Water agency officials say the city’s Community Recovery Plan goes beyond rebuilding from the Northridge earthquake and the roughly $200 million in damage it caused in Santa Clarita.

“Clearly the project is a plan to build out the city to its full desired urban intensity, masquerading as a disaster project,” the suit alleges.

The legal action, filed Friday, is the second attempt to block the redevelopment plan, which the water agency says will siphon off $300 million in property tax revenue over the next 30 years. The plan hurts the agency’s ability to repay $132 million in bonds for its new water treatment plant and other debts, according to Robert Sagehorn, general manager of the water agency.

“The first lawsuit filed by the agency had to do with the procedural problems,” Sagehorn said. “The second suit challenges the breadth of the projects to be funded and whether they are related to the earthquake.”

Santa Clarita City Council members adopted the Community Recovery Plan in February to help recover from the Jan. 17 earthquake, improve infrastructure, redevelop blighted areas and build affordable housing.

After reviewing four years of water agency financial reports, city officials say even with the redevelopment plan the agency will receive more property tax revenue than it projected when it sold its bonds.

Although some believed the council’s decision last week to stop competing with the water agency to purchase the Santa Clarita Water Co. would improve relations between the city and the water agency, elected officials say the new legal action is not unexpected.

“I was surprised with the timing of the suit. I was not surprised that an additional lawsuit was filed, based on their past performance,” said Santa Clarita Mayor George Pederson.

“That just shows you they don’t have the interest of the community in mind. They just have their own self-interest in mind,” said Councilwoman Jan Heidt. “They’re in such financial difficulty due to mismanagement that they will grasp at any straws to better their position.”

Water company officials also say the legal action has nothing to do with their competitive efforts to buy the water retailer.

“We never felt that the two were related,” Sagehorn said. “They were two separate and distinct issues.”