Costly end to Fogarty suit

When it comes to eating crow, Scott Gruendl does it quite gracefully.

He had to consume some bird at the Chico City Council meeting Tuesday (July 15), when the council agreed to a court settlement that ended one of the longest-running conflicts in recent city history—at a cost of $9.5 million, on top of the many millions already spent on cleanup.

In May 2006, developer Tom Fogarty, of Yuba City, filed a $48 million lawsuit against the city seeking costs incurred because of the city’s actions in remediating toxins in the ground resulting from the city’s decades-long operation of the Humboldt Road Burn Dump (HRBD), near the corner of Humboldt and Bruce roads.

For a number of years, the city’s plan had been to help pay for cleaning up all the contaminated acreage, whether on city or private land. Then, in late 2003, the liberal majority of the council, led by Councilman Dan Nguyen-Tan, decided the city should take responsibility for only those acres the city had a hand in contaminating. Private landowners were told that, if they could document the city’s role in the contamination of their property, the city would help pay. None came forward.

Fogarty, who had been trying for more than a decade to develop a 340-acre parcel that was partially in the HRBD area, went ahead and did a cleanup on his own. Then, in May 2006, he sued the city for his costs as well as lost profits associated with the delayed construction of his 1,300-unit Oak Valley subdivision.

It was one of two suits Fogarty filed against the city. The other, for $17 million, resulted from the council’s having changed its mind regarding its initial approval of his Oak Valley project and, in 2005, requiring him to move some 80 dwellings from the easternmost portion of the property to locations farther west. The council’s stated goal was to preserve the foothills “viewshed.” Fogarty’s suit on this matter failed on a technicality.

If Gruendl was apologetic about his vote in 2003, he was also unrepentant.

“As the only remaining member of the council who supported the decision [on the HRBD], I still believe that it was appropriate to pay only for land demonstrated to be the city’s responsibility,” he said. But he went on to apologize “to the public” for the settlement expenditure.

“Though I believe we could have won in court,” he continued, “I agree we should take the advice of our attorney that the settlement presents a predictive outcome and is in the best interests of the city.”

Councilman Steve Bertagna wasn’t inclined to make Gruendl’s crow-eating easy. “As one of the two councilmembers who vehemently opposed that direction, it’s a pretty sad day that the cost of the thing has ballooned out of control.” He added that he was going to abstain from voting because of his “ill feelings” but did agree that accepting the settlement was the best thing to do.

Councilman Larry Wahl also rubbed it in: “Scott has rightfully apologized for his decision.” He said he too would abstain, adding, “I just think it’s really outrageous that we’re even here.”

At that point, Councilwoman Mary Flynn tried to deflect some of the criticism. Noting the city was facing a $48 million lawsuit whose cost, if the city lost, “would be devastating,” she said she thought the settlement reflected “a sound business decision on the part of the city. We could role the dice, but I’m not willing to do so.”

Under the terms of the settlement, the city will pay Fogarty $2 million in cash, though $1.6 million of that will be covered by insurance. The additional $400,000 will come from the city’s general fund in two payments over the next year.

In addition, the city, acting as the redevelopment agency, will put $6.5 million, in a series of payments, into a trust fund that Fogarty will use to build specific public improvements, including several roads, associated with his subdivision. The RDA will also pay $1 million to buy the land on which Fogarty’s “waste cell,” or capped mound of toxins, is located.

Wahl pointed out that, with interest, the RDA will actually be spending as much as $15 million.

Nevertheless, the council, finding itself stuck between a rock and hard place, voted 5-0, with the two abstentions, to accept the settlement.

In other news, the council moved forward on implementing its downtown access and parking plan, prodded by the two members of the Internal Affairs Committee, Bertagna and Tom Nickell, who have been working on the issue.

Most of the IAC recommendations the council eventually approved involved adding diagonal parking on Normal, Chestnut and Hazel streets in the South Campus neighborhood. At the request of bicyclists, diagonal parking was eliminated on Salem Street in favor of a bike path. Altogether, the action will increase the number of parking spaces in the neighborhood from 200 to 258.

Residents of the neighborhood who spoke at Tuesday’s meeting were upset that more cars were being directed their way. Ray Murdoch, who lives in the neighborhood and restores old houses there, said he hated “to see more parking in my living area. It’s not fair to the residents.”

By voting 5-0 in favor, with Vice Mayor Ann Schwab and Wahl disqualified because they have business interests downtown, the council also agreed to implement the Downtown Chico Business Association report “A Walkable Downtown,” which calls for removal of the in-lieu parking fee, private parking enforcement, use of “smart” meters and early retirement of the parking structure bond.

The council also agreed to pursue preparation of a traffic model that looks at reducing Main and Broadway to two one-way lanes and adding diagonal parking to one side of each street.

The biggest problem to solve was where delivery trucks would park. Capital Projects Director Tom Varga said his staff would be putting together a package of ideas for the two streets for later council analysis.

“I think two functional lanes will be more efficient than three dysfunctional lanes,” Bertagna said. He said that, unless the traffic study could disprove this notion, it’s the way to go.

The council also agreed to raise parking fines from $16 to $20 and delinquency fees from $32 to $35.