City, Builder End Shopping Center Dispute

The city and a developer have reached an out-of-court settlement in a pair of lawsuits over one of the city’s major redevelopment projects, a multimillion-dollar shopping center to be built just west of the city center.

The fate of a historic train depot and a supposed Indian burial ground on the site focused the community’s attention on the project, while attorneys for both sides struggled over legal issues. The city ultimately agreed to save the depot last summer by moving it to a vacant lot. The burial ground controversy subsided when archeologists could find no trace of remains.

The city and the developer resolved their lawsuits by compromising on key points of their dispute. At issue was whether Whittier or Encino-based Urbatec would have the right to choose the supermarket for the shopping center. The two sides also disagreed on who would pay the rapidly rising costs of the project.

Major points of the agreement include:

Urbatec’s right to choose the market. The city wanted a market for more affluent shoppers. Urbatec’s tenant, Quality Foods International, wanted a market for economy shoppers, such as a warehouse-style operation, or a market for Latino shoppers.

The increased project costs will be split. Urbatec will pay $1.5 million in loan interest that accumulated during construction delays since April, 1990. The city will pay an estimated $4.36 million to buy the land and relocate businesses on the 16-acre site.

The city claimed these costs went up because of delays caused by Urbatec. The developer said the city just underestimated how much money it would need to get the land.

In the agreement, each side will pay its own attorneys. City Manager Thomas G. Mauk estimates the city’s legal costs at about $220,000.

The developer could begin construction by July. The city hopes the resulting shopping center will produce enough sales and property tax to make its investment pay off.

The groundwork for the settlement was discussed as long ago as March. A tentative agreement last September unraveled over the choice of the market.

There were other obstacles. Council members Bob Henderson and Helen McKenna-Rahder, elected after the city began the project, openly opposed the shopping center. They said the city had negotiated a bad deal for an oversized strip mall.

They were sympathetic to historic preservationists who opposed the development, because it would pave over the site of the Whittier depot, a historic but dilapidated train station. The city finally agreed to move the depot to a nearby lot next to an unused train track.

City officials also attempted to appease a small, but vocal group of American Indians, who believed that the depot site was an Indian burial ground. A city-hired archeologist found no trace of remains, but will continue to examine the site during construction.

Even local motorists drove city officials to distraction. At council meetings, dozens protested the permanent closing of part of Magnolia Avenue, a popular north-south route.

Ultimately, the city had to settle the legal issues and move forward because only attorneys were benefiting, Henderson said.

Even with the settlement, no one involved is too comfortable because of the project’s contentious history.

Said Mauk: “I’m relieved, but not relaxed.”