Sierra Club Drops Suit Over Development : Thousand Oaks: The environmental group wins some concessions. But the project at the former MGM Ranch will proceed.

The Sierra Club has agreed to drop its lawsuit against the city of Thousand Oaks and a Beverly Hills company that is building 1,400 dwellings and an industrial park on the former MGM Ranch, city officials said Wednesday.

The Sierra Club sued in May, contending that the city approved an environmental study of Shapell Industries’ 1,862-acre Rancho Conejo project without conducting an adequate analysis of its effect on rare plants and wildlife.

In the agreement signed last week, the city and Shapell have promised to work with state and federal agencies to minimize any damage to wetlands and wildlife caused by the project.

Shapell also agreed to pay $7,500 to the Sierra Club for legal expenses.

Tom Maxwell, an archeologist who is chairman of the Conejo Valley Sierra Club, said he signed the agreement although the city rejected the club’s demand for a more detailed environmental study.

The Sierra Club concluded that it could not win its suit and settled for a larger role in planning Shapell’s massive project, Maxwell said. Though the project’s 156-house first phase has been approved, specific plans for additional phases have not yet been ratified by the city.

“We didn’t get everything we wanted,” Maxwell said. “We were suing for the city to clean up its act.”

Maxwell said the Sierra Club has not ruled out another legal challenge if the city approves additional phases without taking environmental effects fully into account, he said.

City Atty. Mark G. Sellers said Thousand Oaks officials are pleased that the project--one of the largest in city history--can continue on schedule.

“I think what the Sierra Club realized was the cost of the lawsuit did not justify further litigation,” Sellers said.

The company hopes to build 1,000 houses, 400 apartments and a 102-acre industrial park on a ranch once proposed as a home for the studios of Metro-Goldwyn-Mayer Pictures Inc.

A Shapell official refused comment on the settlement.

City officials said they backed Shapell’s project partly because it set aside land for the Conejo Valley Unified School District and a municipal storage yard.

The settlement of the Sierra Club’s lawsuit clears up the last of two major legal challenges to the Rancho Conejo project. The school district two years ago sued the city to get more land for a new continuation high school.

In June, as part of the Sierra Club action, the California Indian Council Chumash dropped its challenge after Shapell agreed to preserve a site believed to be a Chumash burial ground and to create a $50,000 scholarship fund for Indian students.