Hearing postponed as Caruso, Patel extend negotiations

Americana at Brand developer Rick Caruso and the owner of the Golden Key Hotel on Tuesday agreed to last-minute negotiations over a controversial proposal to expand the 15.5-acre mixed-use mall.

The City Council, acting as the Redevelopment Agency, had gathered before a standing-room-only crowd to vote on competing development plans filed by Caruso and hotel owner Ray Patel, but after an hour-and-40-minute delay in which both parties met hurriedly behind closed doors, they emerged and asked for a weeklong delay.

“I’m giving them the opportunity to discuss this matter again with me,” Patel said.

Caruso declined to comment after the council rescheduled the hearing for Feb. 22.

The action renewed the possibility of a negotiated solution to what was gearing up to be a clash between Patel’s private-property rights and the city’s power to remake the urban landscape in a redevelopment zone.

In November, Caruso told the city he wanted to take over the Golden Key Hotel site and an empty adjacent building, with plans to spend $40 million or more to add retail space to the Americana, build a new pedestrian entry to the mall and widen Colorado Street. He estimated the upgrade would generate $800,000 a year in new sales tax revenue.

The City Council gave Patel and Henry David, owner of the adjacent building, 45 days to come up with their own redevelopment proposals. At the same time, council members, who have the power to condemn properties in the redevelopment zone, encouraged David and Patel to consider selling to Caruso.

In December, David sold his property to Caruso for an undisclosed sum. But Patel refused Caruso’s $6-million offer.

Last month, Patel submitted a plan to upgrade his hotel, adding 14 rooms and a rooftop pool, as well as refurbishing the exterior to better mesh with the Americana.

City officials last week recommended Caruso’s more expansive plan.

On Tuesday morning before the hearing, Patel and about 45 supporters, including representatives from several property-rights advocacy groups, marched from the hotel to council chambers chanting “Let Ray Stay” and holding signs saying “Hands Off My Business” and “Stop Eminent Domain Abuse.”

Patel bought the hotel in 2002, long after the city established the redevelopment zone, but before the city agreed to let Caruso develop the Americana. In 2008, Patel sued Caruso and the Glendale Redevelopment Agency, saying construction of the mall from 2005 to 2008 damaged his business. That case is scheduled to go to trial in June.

In addition to the Americana, Caruso owns property at Colorado Street and Central Avenue. Patel and Caruso representatives declined to discuss whether a property transfer might be part of negotiations.

“I just want to put everything from the last nine years behind me,” Patel said.

City Councilwoman Laura Friedman, chairwoman of the Redevelopment Agency, said she was heartened by the last-minute push for negotiations.

“I hope they do come to an agreement they are both happy with,” Friedman said.

She and other officials have emphasized that the city has not taken up eminent domain in the case. And although the Redevelopment Agency owns several downtown parcels, city officials were not part of the negotiations on Tuesday, Friedman said.

“They were in a room all by themselves,” she said.

Supporters of Patel and Caruso indicated they hoped for a compromise.

“I really think that the Patels knew exactly what they were getting into” when they bought property in a redevelopment area, former Glendale Mayor Carl Raggio said, adding that a negotiated agreement would be best.

Ruby DeVera, president of the Filipino-American Business Assn. of Glendale, said it would be wrong for the city to use its power to turn Patel’s land over to Caruso. She said she hoped the two could work out a deal.

“It’s great. It’s a dialogue,” DeVera said. “We hope for the best.”