Sides Square Off in Parkland Dispute : Trial: Judge in civil case to hear Round 1 today in the suit pitting Taylor Woodrow Homes California against Laguna Niguel.

LAGUNA NIGUEL —  Lawyers for one of Orange County’s most prominent developers and one of its youngest cities will face off today as a Superior Court judge takes up a civil suit over how 96 acres once set aside for parkland ended up with more than 100 homes on them.

After months of pretrial maneuvering, Judge Floyd H. Schenk is expected this afternoon to hear the first round in a dispute that has pitted Taylor Woodrow Homes California Ltd. against the City of Laguna Niguel.

The City Council imposed a building moratorium on the disputed property last July after details of the controversial land transaction were first made public. That moratorium prevented Taylor Woodrow from completing about 65 homes that were already under construction and indirectly affected scores more.

Taylor Woodrow responded with its own lawsuit in October. The company charges that the moratorium is illegal and has cost it both financially and in damage to its reputation. The company wants the moratorium lifted, and it has filed a $25-million damage claim.

Schenk today will hear just the company’s request to have the moratorium lifted.

At the heart of the company’s case is its contention that the county government, which oversaw Laguna Niguel before its incorporation, approved development of the disputed 96 acres. The company had filed maps with the county showing that it planned to develop the land, and the County Planning Commission approved those maps.

Subsequently, the county granted Taylor Woodrow a development agreement, which locked in the company’s right to build homes on the land. That was all the approval that was needed, company officials say.

“The county approved Taylor Woodrow’s plan,” said Allan Songstad, the lawyer representing Taylor Woodrow. “This is a tempest in a teapot. The whole thing was properly approved.”

But city officials counter that when the county took that action, the land was not entirely Taylor Woodrow’s to develop. It had been irrevocably offered by the previous landowner as a future park, and though neither the county nor the community had accepted that offer, they had not rejected it either.

“The public’s right to this land is what’s in question here,” Laguna Niguel Mayor Patricia C. Bates said.

The transformation of the property from potential park to housing development has captivated Laguna Niguel for the past year, as citizens and activists anxiously tracked a pair of related investigations by the Orange County district attorney and the Orange County Grand Jury. No criminal charges were filed.

But in the process of conducting its inquiry, the district attorney collected volumes of information. The files fill seven cardboard boxes and include thousands of pages of interviews and documents relating to the land transfer.

That information has been locked for months in a confidential investigation file dubbed “Operation Deep South” by the district attorney’s office. When the investigation was closed last month, however, the material became public.

As part of its investigation, the district attorney interviewed a number of land-planning experts with the county government. Several of them--who have been cautious in their public remarks--told investigators that they considered the land deal suspicious.

Robert E. Hamilton, manager of the program planning division for county Harbors, Beaches and Parks, told investigators: “This matter was not processed in the manner which the County of Orange would have conducted itself,” according to the investigation file.

“He believed that it was more than a mistake, although he had nothing factual to prove it,” investigators added.

Also, Bryan Speegle, a former county official who once headed zoning and advanced planning operations, told investigators that the county was at fault for not catching the development plans when they were recorded on a map submitted for the county’s approval.

He added, however, that “Taylor Woodrow should have known about the irrevocable offer, and they probably did try to pull the wool over the eyes of the county,” the investigation file indicates.

Songstad dismissed that contention out of hand.

“To me it’s inconceivable that (county officials) didn’t know,” Songstad said. “If they read the damn thing, they knew what was in it. And they had all the information.”

The district attorney’s investigation also uncovered a number of questions regarding the Laguna Niguel Community Services District and the action it took to deed the land over to Taylor Woodrow.

The resolution authorizing that transfer was never properly recorded and eluded investigators until it turned up stuffed into a file from a different year.

When investigators tried to locate the information regarding how and when it was prepared, it eluded them as well. A city clerk eventually found that information in a City Hall broom closet, the file indicates.

Songstad, however, reiterated that Taylor Woodrow contends that the community board had no discretion in the parkland issue since it already had been dealt with by the county. Its actions, he added, are therefore not at issue.

City officials maintain, however, that without the resolution granting Taylor Woodrow clear title to the land, the company could not have developed it.

Although Bates, then the president of the district board, was present for the meeting at which the board considered the land transaction, she did not sign the resolution. Instead, it was prepared after the fact, investigators found, and was drafted for Vice President James Krembas’ signature.

He signed it while Bates was on vacation and at the same time signed the deed that gave Taylor Woodrow clear title to the property. Three months later, Krembas’ wife, Jeanette Krembas, was hired by Taylor Woodrow to manage one of its sales offices.

A letter to the district attorney from Taylor Woodrow indicates that Jeanette Krembas was paid $38,069 for eight months of work in 1988. She received $62,071 in 1989, according to Taylor Woodrow records.

Both James and Jeanette Krembas told investigators that his signing the document was unrelated to her subsequent employment.

Ultimately, however, the Taylor Woodrow lawsuit will center on one question: whether the Laguna Niguel City Council had the right to keep the company from building homes on land that the developer owns.

“A public agency has not just the right but the responsibility to act in this type of situation, where the public’s rights are at issue,” Bates said. “We believe the court will uphold us in that.”

Songstad vehemently disagrees. “Taylor Woodrow submitted its plan, and that plan was approved,” he said. “We feel that we are just caught in a giant political mess down there.”