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Judge Backs State, Schools in Battle Over Ambassador Site : Courts: Ruling exonerates state. Four of six clauses in lawsuit against the district are thrown out.

October 09, 1994|LESLIE BERESTEIN | SPECIAL TO THE TIMES

Almost one year after withdrawing plans to build a high school on the site of the closed-down Ambassador Hotel, the Los Angeles Unified School District recently scored a minor victory in its legal battle against Trump-Wilshire Associates, the developers who own the property.

The company, which is partially managed by mega-developer Donald Trump, filed a $100-million lawsuit against the school district and the state of California on April 5, claiming irreparable financial damages stemming from the district's move to abandon the site after years of haggling with Trump-Wilshire over a purchase price.

The Sept. 28 Superior Court ruling by Judge Barnet M. Cooperman excused the state as a defendant on all counts and threw out four clauses of the developers' six-clause complaint against the school district.

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"It was a tremendous day for the state, and a good day for the school district," said Ed Szczepkowski, an attorney representing the school district.

Attorney Bert Fields, who represents Trump-Wilshire, said the company plans to concentrate on the two remaining clauses, which charge that the developers were not justly compensated for the property and that the school district violated their civil rights by condemning the site through the power of eminent domain granted to state agencies.

"We were very pleased to keep the civil rights claim in," Fields said. "Now we're just looking forward to the trial."

The basis of Trump-Wilshire's claim is that in keeping the property tied up in eminent domain proceedings for more than three years, the school district prevented them from building a mixed-use skyscraper on the site they purchased in 1989, a project that the developers contend would have proven lucrative.

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The school district filed a condemnation claim for about $47.9 million for the rear 17 acres of the 24-acre property in May, 1990, after unsuccessfully trying to negotiate a voluntary sale. When Trump-Wilshire insisted on greater compensation, the land sat fallow as both parties awaited a court date.

After several attempts to negotiate a satisfactory price out of court, the school district officially withdrew its bid last November, citing economic reasons. Although the property is once again theirs to develop, Trump-Wilshire maintains that such an undertaking would no longer be financially feasible.

"By filing their condemnation claim, they destroyed the value of this land and made it impossible to go forward," Fields said. "Other tenants moved away, and there is nothing we can do with that land now."

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The school district, however, contends that Trump-Wilshire was bound to lose money from the beginning. Building a skyscraper in an area with declining real estate values and rising office vacancies would have resulted in a financial fiasco regardless of the school district's intervention, Szczepkowski said, so there is no merit to the claim.

The lawsuit was also brought against the state on the ground that the school district acted as a state agency. Trump-Wilshire has the option to appeal the court's decision to excuse the state from the lawsuit, but attorneys would not comment on their plans.

Trump-Wilshire was given 30 days from the Sept. 28 court date to rewrite and file the two amendable clauses, after which the school district will have 30 days to challenge them. The next hearing is not expected until sometime in December, Szczepkowski said.

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