The Santa Ana City Council voted 6 to 1 Tuesday to move to condemn a downtown muffler shop fighting the city's plans to build a shopping center, a decision officials said was based on reluctance to face a lawsuit by the developer of the project for breach of contract.
Only council member John Acosta voted against the action involving Ace Muffler Shop, the business owned by Miguel Pulido at 401 East 1st St.
The council on Tuesday ordered that formal legal notice be given of its plans to acquire Pulido's property by eminent domain and proceed with construction of the shopping center by Urbatec Corp., a Santa Monica developer.
City Manager Robert C. Bobb said Urbatec could sue the city for breach of contract and win a "$2- or $3-million" judgment if the muffler shop's presence forced the city to scrap plans for the center.
"The City Council anguished over this decision, and the only motivation (for condemnation) is that it would represent a major breach of contract with the developer, no matter how they (council members) felt, and a substantial financial liability," Bobb said in an interview.
"When faced with the reality of the financial liability of several million dollars, then rather than making a gift of public funds to Urbatec, the decision was made to proceed with condemnation proceedings." Bobb said a public hearing on the condemnation action will be scheduled.
Pulido, 59, who has owned Ace Muffler for the past 14 years, said when he was reached at his Yorba Linda home Tuesday night that he was "shocked" to hear of the council's action.
Owner Vows Fight
"I don't believe it. Bobb told the Amigos Club (a businessmen's association) in public that I was going to stay," Pulido said.
The shop owner said he planned to fight the council action and would immediately contact his attorney, Charles McClung Jr., to discuss his next move.
"I really don't know what's going on," Pulido said. "The thing I don't understand is why they did this so suddenly after they told everybody I was going to stay."
McClung said the council decision took him "completely by surprise. We received no warning."
The attorney said Pulido had received assurances from city officials that condemnation would not be initiated against his business.
"It seems strange to me," McClung said. "Everyone--Mr. Bobb, the mayor and several council members--told us they weren't going to do this. But if that's what they want us to do, then we will be happy to respond."
Pulido, who worked at the shop for 10 years before gaining ownership, has been embroiled with the city in the controversy for several years. In 1981, he rebuilt his shop to accommodate a city street-widening project.