The Los Angeles City Council voted Tuesday to settle a lawsuit over a contested 24-home subdivision planned for El Sereno, agreeing to buy the property for $9 million so it can be converted into a park.
The developers of the property, Monterey Hills Investors, sued the city last year after the council demanded a new environmental review of the project, planned for a site known as Elephant Hill.
Councilman Jose Huizar said the city would borrow money in the short term to pay for the 19-acre site. Over the long term, he said, the city will seek state funding to help defray the cost.
"This is an environmental justice victory because proper environmental review was not conducted" on the planned subdivision, said Huizar, whose district includes El Sereno.
A Los Angeles County Superior Court judge had a different view, ruling in January that the council had no authority to order Monterey Hills Investors to perform a new environmental impact report on the project.
In the wake of that ruling, attorney Ben Reznik, a City Hall lobbyist who represents the developer, vowed to seek damages of at least $8 million, saying the city's actions postponed completion of his client's project until after the collapse of the region's real estate market.
Reznik, who has held campaign fundraisers for Huizar and other city elected officials, had no comment on the vote, saying the settlement had not been finalized.
As he prepared for the damages phase of the case, Reznik gave notice that his client intended to depose Huizar, Councilman Ed Reyes and possibly employees in the mayor's office, according to a report obtained by The Times.
The Elephant Hill project has been debated for years. But the fight reached a critical stage two years ago when the council voted to block the city Department of Building and Safety from issuing a permit that would allow the developer to grade the site.
The city attorney's office sided with Reznik, warning council members that they lacked the power to seek more review. But Huizar sided with neighborhood activists and the Natural Resources Defense Council, an environmental group that argued El Sereno needs more undeveloped hillside space.
On Aug. 12, the council instructed the city's lawyers to negotiate a purchase of the site. Although the developer was attempting to build on roughly 14 acres, the council agreed to buy an additional five acres that were not part of the original project.
The vote drew strong praise from El Sereno resident Elva Yanez, who spent the last five years rallying her neighbors against the project.
Yanez said the fight over the subdivision dates to 1984, when the first environmental document on the project was released.
"This has been a long and hard-fought struggle," she said.