Files Reveal Arena Fights in Anaheim : Urban affairs: The city complains about rising costs and work failures by the developer, which threatens to sue. But Santa Ana has smooth sailing on its parallel plan.

ANAHEIM —  Although they continue negotiating their differences, the city and the developer of its indoor sports arena have argued bitterly in recent months about the lack of progress on the proposed $94-million facility and what to do about it.

The city has complained about rising costs and developer Ogden Corp.’s failure to carry out required work. Ogden has countered by threatening to sue.

The disputes are detailed in city documents obtained by The Times this week under a California Public Records Act request. Anaheim officials say many of the disputes have been resolved, but serious questions remain at issue before the arena can be built.

The friction between Anaheim and its developer stems partly from lawsuits filed by neighbors of the proposed 20,000-seat arena, temporarily blocking construction.

“No professional franchise will agree to relocate to a proposed arena when newspaper articles appear almost daily stating that litigation is likely to indefinitely delay the project,” Maria Monet, president of Ogden Financial Services, the firm’s financing subsidiary, wrote in a Jan. 19 letter to Anaheim’s chief negotiator, Assistant City Manager James Ruth.

Monet’s letter was in response to a letter from Ruth. In that Jan. 11 letter, Ruth said the city was “not aware of any progress in connection with obtaining a team.”

Ruth also complained to Monet about the lack of progress on the arena and gave the firm 30 days to “live up to its obligations” or Anaheim “will not consider itself bound to deal exclusively with Ogden.”

In response, Monet warned that Anaheim would be “liable for all our expenses, more than $1.1 million,” if Ogden is replaced with another developer.

Moreover, Monet said, if a new developer is brought in, Anaheim “would be subject to a lawsuit for inducing . . . breach of contract.”

But according to Ruth, Ogden officials conceded later in private meetings that Anaheim is no longer bound to its exclusive agreement with their firm because construction bids exceeded the original $85-million estimate.

“We have the right to negotiate with whoever we want,” Ruth said in an interview Thursday. “She (Monet) is entitled to her opinion, and we’re entitled to ours. . . . We don’t feel we are legally vulnerable at this stage.”

Monet and other Ogden officials did not return telephone calls from The Times last week.

After construction costs increased $9 million over the original $85-million estimate, Anaheim officials spoke publicly about replacing Ogden.

“When the bids came in at 94 million bucks, the city was free to do whatever it wants,” Ruth said.

According to Anaheim officials, Ogden wants the city to help with the increased costs. But city officials said Ogden’s $94-million figure is too high.

The cost dispute is the most recent sign of what may be a growing rift between Anaheim and Ogden.

In January Ruth complained that Ogden had not yet hired attorneys to defend the city in the environmental lawsuits, which were filed in December. Ruth said Ogden bears responsibility for “indemnification of Anaheim and for any damages and costs” stemming from the suits.

In her letter, Monet responded that “Ogden has not agreed to indemnify the city.”

On Thursday, Ruth repeated that Anaheim wants “indemnification if (Ogden) is going to move ahead. The city wants to be indemnified against any future lawsuits if we are going to proceed.”

Many of Anaheim’s concerns have been addressed by Ogden, Ruth said.

“There was a period of time where we didn’t feel comfortable,” he said. “Since that (Jan. 11) letter, they have made some progress on several of these issues.”

One remaining point of contention, however, is Ogden’s desire to get a lucrative contract operating the food, beverage and novelty concessions at nearby Anaheim Stadium as a hedge against losses on the indoor arena.

According to another letter--dated Nov. 8, 1989, from Ruth to Ogden officials--the City Council opposes granting Ogden the concessions contract without the approval of Major League Baseball’s California Angels and the National Football League’s Los Angeles Rams, who share concessions profits.

“Our concern is, if you are unable to acquire the necessary approvals. . . , the entire timing and approval of the arena project will be jeopardized, unless this (concession contract) is withdrawn from further arena negotiations,” Ruth wrote.

He said Thursday that Ogden remains interested in the stadium concessions but has still not obtained approval of the Rams or Angels.

“We also have been advised by the Angels’ organization that it is prepared to file an action against the city if the city enters into any concession agreement which will provide less to it than the” current arrangement, Ruth wrote Jan. 11.

Since then, ARA Leisure Services, the Philadelphia firm that holds the Anaheim Stadium concession contract, has offered Anaheim $5 million for a five-year extension when the contract expires Dec. 31, 1990, other city documents show.

An Angels spokesman said Thursday that the team has never been approached by Ogden about the concessions contract.

Approval from the Angels may be difficult for Ogden to obtain. In a November, 1989, draft of a letter to Angels owners Gene and Jackie Autry, Ruth noted that the baseball club has also expressed interest in operating the concessions itself after the contract with ARA expires.

While these difficulties have arisen between Ogden and Anaheim, Santa Ana officials have quietly moved ahead with plans for a nearly identical, privately owned and operated, 20,000-seat indoor arena to be built there. Most observers do not believe that two such arenas can succeed in Orange County and that one will be scrapped if the other is built first.

Environmental approval of the Santa Ana arena has been granted, and there have been no legal challenges to the project, which is a private joint venture of Spectacor Management Group, MCA Entertainment Inc. and King-Guanci Development Co. Inc. of Newport Beach.