Inquiry Is Sought Into Santa Ana Land Deal

Two Santa Ana council members have asked the Orange County Grand Jury to investigate a $6-million city expenditure last month to help an auto dealership expand.

In a Feb. 7 letter, Claudia Alvarez and Lisa Bist asked the grand jury to determine whether city officials had properly negotiated a land deal. They also asked whether the council’s 4-2 vote that approved it was ethical. The council changed bylaws to allow the approval with four votes instead of five.

At issue is a Jan. 17 vote that allowed the city to buy a land lease from Honda Santa Ana for $4.2 million. The land, the site of the now-closed Mr. J’s strip club, will be leased back to Honda. The council also allocated $1.8 million for demolition of the club, land preparation and legal fees incurred in a dispute with the club.

“It’s taxpayers’ money, and we gave away a lot of it,” said Bist, who did not approve the allocation.

“We’d like this looked into by a third party.”

Four other council members said they approved the deal because they believed an expanded Honda dealership would help the city’s auto mall, where 10 dealerships generated $3.9 million in tax revenue in the fiscal year ending June 2005.

“The Honda deal is a good deal for the city,” said Councilman Jose Solorio. “We believe the benefits outweigh the costs.”

Alvarez said she opposed the deal because she believed city officials were trying to avoid eminent domain procedures to obtain the lease. Also, she said, the legal costs of the deal were not explained. She said the council approved paying legal fees without getting proper documentation.

Last year, council members approved spending $10 million for land to allow Crevier BMW to expand its 52,000-square-foot building. Construction began in March 2005.