Rehab suits nearing $250K

Newport Beach has spent almost $250,000 on legal fees since November dealing with drug and alcohol rehabilitation homes in the city, according to billing information obtained by the Daily Pilot.

The city also plans to budget about $500,000 next fiscal year to deal with the homes, Assistant City Manager Dave Kiff said.

The city’s large legal bills are the result of “a lot of effort and a lot of hours in a very compressed amount of time,” said attorney Jim Markman, who represents Newport Beach in the city’s ongoing battle to curb the spread of rehabilitation homes within the city. The city hired Markman’s private law firm Richards Watson and Gershon in September 2007 to research and draft new city laws to regulate the homes in response to residents’ claims that for-profit sober living homes for recovering addicts generate crime and other nuisances in their neighborhoods.

Local activists claim the city has spent too much money enacting a new ordinance to curb the spread of the homes that please neither residents nor the homes.

“From our perspective, there was absolutely no reason for the city to spend that amount of money on the development of the ordinance,” said Denys Oberman, a leader of the group Concerned Citizens of Newport Beach. The group claims Newport Beach officials have not listened to residents’ concerns about rehabilitation homes and is suing the city and several local rehab centers to the tune of $250 million.

The Concerned Citizens group spent about $250,000 of its own money over the past year on attorneys and planning experts to address the rehab home issue which city officials largely ignored, Oberman said.

“We felt the ordinance could have been done in several months for a fraction of the expense, but primarily due to political resistance in the city, it went round and round and round,” Oberman said.

Newport Beach has paid Richards Watson and Gershon more than $231,000 since it hired the firm last fall to replace the Los Angeles-based law firm Goldfarb and Lipman on the rehab homes issue. The city paid Goldfarb and Lipman more than $150,000 to draft new laws before breaking ties with the firm in September 2006.

Some Newport Beach residents accused Goldfarb and Lipman of a conflict of interest, claiming the firm had previously represented some of the same rehabilitation homes the city hired it to draft laws to regulate.

Residents also have accused Councilman and former Mayor Steve Rosansky of having a financial interest in rehabilitation homes. An independent investigation into the accusations by Richards Watson and Gershon cleared Rosansky of any wrongdoing.

The alleged improprieties have only added to the city’s mounting legal expenses, said local activist Bob Rush.

“Legal costs have been amplified by complicity and judgmental lapses of the city attorney and council as evidenced by hiring attorneys to whitewashed former Mayor Rosansky’s drug rehab involvement as well as initially hiring outside attorneys having a history of group home advocacy to write group home use laws for Newport,” Rush said.

Despite several lawsuits and other complaints filed by and against the city relating to drug and alcohol rehabilitation homes, most of the city’s legal expenses have come from researching and drafting the new city ordinance, Kiff said.

The ordinance, which went into effect last month, requires most homes to get use permits to remain open and will subject the homes to a public hearing process to gain approval.

Richards Watson and Gershon will continue to play a large role as the city implements the new rules over the next year, Markman said.

“Our role is to defend the ordinance there’s still a lot of work to be done,” he said.

Among its duties, Richards Watson and Gershon will continue to represent the city in several legal challenges and act in an advisory role to the city in the coming year, Kiff said.

The numerous legal battles between rehabilitation homes and the city could continue to drag on for years.

Newport’s largest drug and alcohol rehabilitation home operator, Sober Living by the Sea, is suing Newport Beach and the City Council, alleging the city’s new ordinance discriminates against recovering drug addicts and alcoholics. The rehab center Pacific Shores Recovery filed a federal fair housing complaint against the city in February.

The city also filed a lawsuit in November 2007 against Pacific Shores Recovery and Morningside Recovery. The suit alleges the two homes violated a ban on opening new rehabilitation homes in Newport.

Newport Beach officials estimated earlier this year it would cost about $326,000 short-term to implement the ordinance and about $492,000 annually to enforce the new rules, according to city documents.

BRIANNA BAILEY may be reached at (714) 966-4625 or at brianna.bailey@latimes.com.