Redlands Embroiled in Battle Over Competing Malls

Efforts to build retail centers in the Inland Empire city of Redlands have all the drama and twists and turns of a soap opera these days. Jilted suitors seeking justice, promises made and then broken, dashed hopes � and the arrest of one popular shopping center developer � are all part of a long-running battle over development in the slow-growth, upscale city. Not surprisingly, the matter has ended up in court.

At least eight lawsuits have been filed. The city's legal fees so far are approximately $500,000. Redlands sits on prime land near Interstate 10 in San Bernardino County. Over the years its residents have approved a number of ballot measures to curtail its growth.

The most recent, 1997's Measure U, has played a role in many of the current lawsuits. Measure U, which passed with 57.2 % of the vote, was based in part on a developer's proposal to build the Citrus Plaza shopping center on county land next to the city. The measure requires all development within the city's sphere of influence to conform to city standards and requires socioeconomic studies to be made of development projects. But since its passage, shopping-center development has been at a standstill.

"We've been at a moratorium for over 10 months," said City Councilwoman Pat Gilbreath, due to the city's efforts to develop socioeconomic studies called for in the measure. Gilbreath, who says she's for moderate growth, is often in the minority on city council votes. Gilbreath said it could be as long as six months before the matter is resolved. City Councilwoman Geni Banda said she hopes the socioeconomic studies can be resolved in November. She described the studies as looking at the costs of such things as infrastructure improvements, traffic problems, and loss of trees caused by new development. "Measure U is not the scary monster that builders have purported it to be," Banda said. Citrus Plaza was the first of three shopping centers proposed.

The 125-acre, 1.2-million-square-foot shopping center would be built on land that is adjacent to Redlands and was expected to be annexed into the city. The project was approved by the county after talks with the city broke down, according to the Los Angeles Daily Journal. Redlands then sued the county, naming the center's developer, Majestic Realty, as the real party in interest. Redlands won that lawsuit, which has been appealed. Majestic is now suing the city over its agreement with the developers of another shopping center, Timberlake Group International, which plans to build the 450,000-square-foot, 45-acre Cities Pavilion. The pavilion will be an entertainment center with numerous movie theatres, similar to the Irvine Spectrum in Orange County.

"The [Cities Pavilion] project is subject to Measure U...because the approvals were formalized after Measure U went into place," said Robert Crocket, Majestic's attorney. Majestic filed two lawsuits over Cities Pavilion, including a challenge under the California Environmental Quality Act and a lawsuit alleging that the development agreement was defective.

The CEQA suit charges that the city failed to meet general plan requirements for parking when the project was downscaled. Majestic has continued to move forward with its plans for Citrus Plaza, despite the lawsuits, said Banda. "None of that [the lawsuits] is personal," she said. "That's just business." Gilbreath said that the city council's majority modified legal descriptions and property covered in the Cities Pavilion project in 1998 after Measure U was passed. She said she believes this put it under Measure U's standards. But Banda said that the development agreement for the Cities Pavilion project was approved in October 1997 before Measure U passed.

The city's attorney has said that the development agreement was valid when the city council accepted it, she said. Meanwhile, Timberlake Group International's president Tim Alexander and consultant Jane Un were arrested and charged in September with real estate fraud, unrelated to the project. A preliminary hearing for Alexander is set for the beginning of December. Alexander's attorney, Andrew I. Roth of Riverside told the Daily Journal"

"There's some very powerful interests that are affected by the project." Alexander, according to company spokesman Fred Cassle, "is conducting an investigation to see who's behind it [the arrest]."

Cassle said the arrest has slowed down things, but Alexander is still moving forward with the project. He said that construction of the first phase of the project is expected to begin later this year. Banda said both Alexander and Un have not been convicted of any crimes, and the city would open itself to more litigation if it dropped that project. None of the charges against them had anything to do with the Cities Pavilion project, she noted. Lawsuits have also been filed for over a third retail center, called Redlands Crossing, 475,000-square-foot project that was to be built on 45 acres by Zelman Development of Los Angeles.

After Measure U passed, the plans were withdrawn, according to the Daily Journal, and state and federal lawsuits were filed by the developer, charging violation of due process and environmental law violations. The suits seek a total of $24 million in damages. Banda charged that Redlands Crossings' developers "walked away" from the project after missed deadlines brought the project within the scope of Measure U.

"The only thing that doesn't exist anymore is Redlands Crossing, because they walked away," she said. "If they had stayed, they'd probably be the shopping center right now." An attorney for Redlands Crossing did not return a phone call seeking comment. If Majestic's large Citrus Plaza project goes forward with a proposed movie theater, it may hinder Timberlake's Cities Pavilions, Banda indicated, because the town can't support that many theater complexes. Gilbreath said tenants for the retail centers have not been announced, although she's heard that Target, Barnes and Noble and Edwards Cinemas were among the companies being wooed. Banda said that taxpayers may not get stuck with the cost of the city's legal fees, noting that it might be a negotiable item in settlement talks.

Crockett, Majestic's attorney for its suits over Cities Pavilion, said that two sides had met during the week of October 12 to discuss settlement.

Contacts: City Councilwomen Pat Gilbreath and Geni Banda, (909) 798-7533. Robert Crockett, Latham & Watkins, (213) 485-1234. Robert Cassle, spokesman for Timberlake Group International, (619) 523-0455.