City’s Land Deal on a Slippery Slope

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Randy Song, along with his father and sons, at their envisioned homesite overlooking Laguna Canyon. New negotiations are underway over the property. Photo by Jody Tiongco.
Randy Song, along with his father and sons, at their envisioned homesite overlooking Laguna Canyon. New negotiations with the city are underway over the possible purchase of property. Photo by Jody Tiongco.

By Cassandra Reinhart, Special to the Independent

Negotiations over a multi-million dollar city land deal that collapsed over slope instability are on again.

This past Tuesday, city staff were set to recommend that the City Council rescind its approval to buy the privately owned undeveloped hillside overlooking the Sawdust Festival for $1.63 million, but at the last minute the city manager removed the item from the council’s agenda.

“Some additional discussions have occurred today that leave me to believe we should take some more time to work on this matter,” City Manager John Pietig told the council.

The property at 1199 Lewellyn Drive has been a thorn in the city’s side since 2010. That’s when Randy Song, of La Mirada, bought the 12-acre parcel for $685,000 with the intent of building a home.

At that time, Neil Popowitz, Song’s attorney, said the municipal code allowed repair and restoration of fire-damaged property. When Song submitted his building application, Popowitz said, the city instead treated it as if it were a new development, which triggered a fire department review. To obtain permit approval, fire officials required Song to rebuild the existing road, deemed inadequate for fire truck access.

The price tag: an estimated cost of $2 million in order to build.

“They were making demands for a water supply that were going to be impossible to comply with,” Popowitz said.

Unable to build, Song sued the city for $6 million in October of 2015. Last December, city officials agreed to buy the troubled property as an open space preserve. At the time, Pietig said the purchase would “resolve potential legal disputes between the property owner and the city.”

That deal collapsed and never came to fruition because city staff attempted to renegotiate the terms after analysis showed potential slope instability, a city report says.

Studies over geology, hydrology and drainage showed “problematic conditions” of the slope of the property and recommended its stabilization to guard against slippage of dirt and debris on the Sawdust Festival grounds and Boys and Girls Club below, the report says. The estimated price tag: up to $1 million.

“The due diligence steps identified concerns about the slope on the property for which remediation measures were recommended,” Pietig said.

Popowitz said the land purchase from Song collapsed when the city tried to renegotiate the price.

“They kept delaying and delaying, and eventually decided they didn’t want to buy the property because they wanted a further reduction in price, and they want Mr. Song to take the hit for that,” Popowitz said.

The city was prepared to drop its offer and defend itself against Song’s lawsuit, seeking $6 million in damages.

But the threatened collapse of the deal altogether appears to have brought both parties back to the negotiating table.

“We are talking, that’s all I can tell you,” Popowitz said Wednesday. “We are having some conversations.”

If a deal is not reached, Popowitz said Song’s lawsuit against the city over the fire code constraints will go forward. The next court date is set for August 28.

“An opportunity was presented to resume settlement discussions and we decided that it is worth taking additional time on the matter,” Pietig said Wednesday.  “We are not able to comment on the substance of those discussions, and that if successful, the details of a transaction would be public information.”

Popowitz tells the Indy news of a deal between the two parties could come as soon as Thursday.

 

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