Costa Mesa Council OKs Permits for Arnel Project

Construction on Arnel Development Co.’s massive Metro Pointe office complex in north Costa Mesa was given a green light Monday night when the City Council voted to issue building permits for the second phase of the project.

The 3-2 vote came despite a pending Superior Court ruling on the legality of a citizens group referendum seeking to halt construction on the $90-million project.

Earlier this month, the council had delayed approving the permits while the city attorney reviewed the city’s legal position.

City Atty. Tom Wood said Monday that the city would be protected by an agreement with the developer. Arnel promised to absolve the city of future liability if the permits were issued.

The firm agreed to pay any legal or other costs incurred if the court rules the referendum legal and it is approved by voters, forcing the company to tear its buildings down.

“We came up with a hold-harmless agreement,” Councilman Peter Buffa said. “The dilemma was (that) Arnel could come back if the referendum passed and say: ‘You let us proceed.’ So we agreed to issue the permits only if they understand they proceed at their own risk.”

Wheeler, Hornbuckle Vote No

Buffa was joined by Mayor Donn Hall and Vice Mayor Orville Amburgey in approving the permits. Council members David Wheeler and Mary Hornbuckle opposed the decision.

“I don’t have a whole lot of faith in the city attorney’s office,” Wheeler said. “The city should not issue those permits until there has been a resolution by election.”

Hornbuckle said she preferred to wait until the judge ruled on whether the referendum is legal. “I for one am more than happy to wait to issue building permits,” she said.

By approving the building permits Monday, the City Council could leave itself open to lawsuits from the citizens group that qualified the referendum for the November ballot, opponents of Metro Pointe have said.

“The City Council seems to march to the beat of its own drummer,” said Jay Humphrey, a spokesman for Costa Mesa Residents for Responsible Growth. “I would like the city to listen to the people once in a while.”

The group, however, does not immediately plan any legal action against the city or Arnel over the matter of issuing permits, he said.

The council first approved the project in February. The citizens’ group then collected enough signatures to qualify a referendum for citywide vote to stop construction. But last month, the city attorney challenged the referendum’s legality and sought a judicial opinion. That opinion is not expected until later this summer.

If a ruling does not come by Aug. 12, the county’s deadline for placing measures on the November ballot, then a special election must be called or the referendum postponed until 1989.

Metro Pointe’s second phase includes three office towers totaling 460,000 square feet. The towers, ranging from four to 12 stories, would be built on 12 acres of farmland bordered by South Coast Drive, Bear Street and the San Diego Freeway.

The project’s first phase, already completed, includes an apartment complex and a pair of two-story office buildings immediately north of the second-phase area.

In other matters, the City Council voted to delay any decision on whether to place on the November ballot another referendum by the citizens group. The second referendum is aimed at stopping work on the $400-million Home Ranch project.

The group won a temporary injunction last fall halting construction on the C.J. Segerstrom & Sons development when a judge ruled that environmental reports and density limits were inadequate.

Council members Monday said they preferred to wait on the judge’s final ruling before placing the matter before city voters.

Orange County Superior Court Judge Seymour Tully, who heard oral arguments on the Home Ranch project last Friday, is expected to rule later this month on whether Segerstrom can proceed.