Pasadena Offers to Settle Housing Bias Suit, Sources Say

The Pasadena City Council, after running up more than $3 million in legal bills during its five-year federal lawsuit against the owner of the largest low-income housing project in the city, has offered to settle the case by paying $850,000 to the other side for its attorneys costs, according to sources close to negotiations.

Attorneys for King’s Villages owner Thomas Pottemeyer and city officials said Tuesday they are optimistic that a settlement can be reached. An arbiter ruled earlier this year that the city failed to prove any discrimination by Pottemeyer against African Americans in tenant selection at the 313-unit complex. Special Judge Jack E. Goetzen’s ruling must be approved by U.S. District Judge Kim Wardlaw, who is set to hold a status hearing on the case today.

Attorneys for both sides refuse to reveal details of negotiations. But sources said the city has offered $850,000 to pay Pottemeyer’s legal bills in return for an agreement not to countersue the city. Sources said the deal is only awaiting signatures.

Such a payout would bring the city’s total legal costs for the case to about $4 million.

“This has not been a happy chapter in the city history,” said Councilman William E. Thomson Jr.

The city’s case has focused on allegations that between 1989 and 1991 Pottemeyer systematically discriminated against African Americans in tenant selection. The city alleged that Pottemeyer favored Latinos, whom he perceived as better tenants.

But Goetzen agreed with Pottemeyer that the increasing number of Latinos at the complex is a reflection of city’s changing demographics, not discrimination.

In the wake of the ruling, council members have called for an audit of attorney’s bills.

By last June, Gronemeier & Barker had received more than $1.8 million in fees and $212,000 in costs for representing the city. In addition, the Los Angeles law firm of DuBose & DuBose received more than $757,000 in fees and $8,000 in costs, city records show.

The Gronemeier and DuBose firms say the cost is a result of the complexity of the case, the thousands of potential tenants involved and a trial with a private judge drawn out over more than a year.