CITY HALL — Glendale has agreed to pay a cosmetics company more than $400,000 to settle the company’s claim that it lost business after the city used threats of eminent domain in 2006 to push it out of a tenant building for a street-widening project.
DuWop LLC was a tenant in one of several properties that the city acquired in 2006 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.
DuWop’s attorney, Arnold Graham, said the company’s losses stemmed from increased operating costs at its new location in Van Nuys, in addition to the forced move coming during the high point of the Christmas shopping season.
“These two young ladies were trying to run their company and make sales and package products,” he said. “And at the same time they were being forced to look for a new location.”
DuWop owners also claimed 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. City officials strongly denied the allegations.
On Tuesday, the City Council approved a $445,000 settlement with the company, which comes on top of $125,000 the city paid at the time to help with relocation.
“This was through intense negotiations, but I think at the end of the day, this was an agreement that we could both live with,” said Chris Sansone, general counsel for the Public Works Department.
City officials said the street-widening, finished last year, was 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.