City Reverses Decision on Housing Project

Moving to avoid a lawsuit, the City Council has reinstated a $1-million funding pact with a low-income housing developer.

City Council members voted 3 to 2 Tuesday to overturn their previous decision that canceled the agreement. They said their action will prevent the developer from acting on a threat to sue the city’s Redevelopment Agency and three of its directors, Mayor Chris Norby and council members Julie Sa and F. Richard Jones, who last month voted to terminate the agreement.

“The city would be at great, I underline great, financial risk if it did not proceed with this project,” Jones said before casting his vote for the settlement. The threatened lawsuit was “a loaded gun against the head,” Jones said.

Norby and Sa cast the two dissenting votes.

The original agreement was approved in 1994. It was signed by the agency and Urban Communities-San Gabriel Partners, of Costa Mesa. Officials said the agreement was transferred to Ajit Development and Investments (ADI) Inc., of Los Angeles when it bought Urban Communities’ interest in the project.

ADI owner Ajit Mithaiwala pledged a “quality project.” When it’s finished, he told the council, “I hope you can come visit. Maybe we can share coffee and laugh about this matter.”