A group of businesses that would be uprooted by a planned auto mall have filed suit against the city in an effort to block the project.
The lawsuit, filed Friday in Los Angeles Superior Court, charges that the businesses were not given proper opportunity to review the project.
The lawsuit also maintains that the city's redevelopment plan and zoning ordinances do not designate an auto mall as a permitted land use in the area, a parcel next to the San Diego Freeway.
Finally, the suit contends, the city's plans to subsidize the project by purchasing land then selling it at a reduced price to the half dozen auto dealerships moving to Signal Hill constitutes an illegal gift of public funds.
City officials were reluctant to comment extensively on the lawsuit. "My own initial reaction is that there's just no merit to the suit," City Manager Louis Shepard said.
One Signal Hill official said the city has taken no action so far requiring public hearings. A public hearing will be held before approval of a development agreement, which is now being hammered out.
The official said the city's redevelopment plan and zoning laws can be modified by the City Council if, as the lawsuit contends, an auto mall is deemed to not be a permitted use.
While the city does plan to "write down" the cost of property being sold to the auto dealers, that action is a common practice in redevelopment and is not a gift of public funds, the official said.