Firm suing the city

CITY HALL — A cosmetics company is suing the city for losses allegedly incurred by eminent domain threats related to the multimillion-dollar Flower Street widening project.

DuWop LLC was a tenant in one of several properties that the city acquired in 2006 in order to make way for a $14.6-million plan to widen Flower Street between Sonora and Western avenues. The project was to coincide with California Department of Transportation plans to build ramps from the Golden State (5) Freeway to Western Avenue and Flower Street.

Under the threat of eminent domain, La Cañada-based Seastrom Investments sold the property at 1525 Flower St., where DuWop had a lease agreement through 2014.

While the city at the time paid DuWop $125,000 to help with relocation, the company alleges that it suffered additional expenses and business losses related to its forced move, according to Los Angeles County Superior Court records.

Chris Sansone, general counsel for the city’s Public Works Department, said the city has never received receipts documenting how the company used the $125,000, as was required under a previous agreement.

“Three years later, they are claiming not only more moving expenses, for which they haven’t supplied any sort of documentation; now they are claiming business goodwill,” or additional losses, Sansone said. “They are going to have to prove this in court.”

DuWop’s lawyer, Arnold Graham, said the losses stem from increased operating costs at its new location in Van Nuys.

“At the time they were displaced, the real estate market was very tight,” he said. “It was hard to find a relocation site. They did the best they could, but they had to take on extra property. There was nothing available that fit their needs.”

DuWop owners also claim the city did not follow correct legal procedures or provide proper justification in forcing them to vacate the building after acquiring the property, according to court records, an accusation city officials strongly deny.

City officials have said the widening, which is expected to be finished later this month, is necessary to meet increased traffic expected in the growing San Fernando corridor, which is already home to the Walt Disney Co., ABC7 and DreamWorks Animation.

A DuWop spokeswoman declined to comment Monday.

The City Council is scheduled to discuss the lawsuit in closed session today.