Argyros’ company settles tenant lawsuit

Paul Clinton

COSTA MESA -- Billionaire businessman George Argyros’ apartment

company has agreed to pay former tenants a total of $1.1 million to

settle a consumer-fraud case involving withheld security deposits.

Arnel Management Company, which owns three large apartment complexes

in Costa Mesa, is also on the hook for $200,000 in civil penalties and

$150,000 in investigation and prosecution costs.

State Attorney General Bill Lockyer announced Friday that the company

had reached the $1.5 million settlement, in which Arnel admitted no

wrongdoing.

Although Argyros was not personally named in the complaint, the deal

is expected to clear the way for confirmation hearings by the Senate

Foreign Relations Committee on the Harbor Island resident’s nomination as

ambassador to Spain.

A group of former tenants sued Arnel, alleging the company illegally

kept their security deposits and violated other provisions of state

landlord-tenant laws. The suit alleged many tenants were charged

unreasonable cleanup and repair costs and had entire deposits withheld

regardless of the condition of the apartment.

The company, the largest residential landlord in Orange County, owns a

total of 4,535 apartment units in the county.

In Costa Mesa, Arnel owns The Cape at Metro Pointe, a 296-unit

complex; the 440-unit South Pointe and the 244-unit Wimbledon Glen.

The Cape and Wimbledon Glen are located near South Coast Plaza. South

Pointe is near the intersection of Baker and Bristol streets.

Security deposits at the complexes range from $550 to $850. Monthly

rent ranges from about $1,000 to about $1,800 for housing ranging from a

studio to a three-bedroom unit.

Wimbledon Glen Manager Malia Empron said she couldn’t address the

settlement or the tenants’ allegations.

“I’m not really at liberty to comment on it,” Empron said.

Argyros and officials at Arnel’s Costa Mesa corporate headquarters

could not be reached Saturday for comment.

The $1.1 million set aside for refunds will go to tenants who moved

out of Arnel’s apartments between March 1, 1997 and Friday.

Argyros has been waiting since his April nomination by President Bush

for hearings on the ambassadorship.

Tom Rogers, a former head of the Orange County Republican Party, said

the settlement won’t bode well for the billionaire.

“We certainly don’t want people with a cloud over their head

representing us overseas,” Rogers said. “He admits to being litigious,

and I don’t know if that’s a good quality for a diplomat.”

Rogers, a South County resident pushing for a Great Park at the closed

El Toro Marine base, has been at odds with Argyros on that county’s plan

to put an airport at the base. Argyros has funneled $3.5 million into the

pro-airport camp.