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Westfield withdraws; suit pulled

Less than two months after Caruso Affiliated sued over Westfield Santa Anita’s request to add more restaurants at its new Promenade wing, Westfield has withdrawn the request and Caruso says it will drop its lawsuit against the City of Arcadia.

The suit by Caruso Affiliated’s Santa Anita Associates in late August was filed against the City and the City Council since the Council approved Westfield’s request  in a split 3-2 vote in July without requiring any further environmental review. The suit also named multiple Westfield entities as “real parties in interest.”

Westfield Promenade Grand Opening May 7, 2009

Westfield vp, development, John Healy, sent a letter Wednesday asking the City to “vacate” Westfield’s request for authorization to convert an additional 13,500 square feet of space approved only for retail into restaurant use. He said that even though Westfield agreed with City staff that the conversion qualified for a categorical exemption from any further environmental review, that the cost and resources required to defend the lawsuit is not warranted.

Westfield is in the final stages of a massive remodeling of the center interior area of the Santa Anita mall that is expected to be complete in time for the holidays. The company is expected to announce major plans for the long-vacant two-story former Robinsons-May eastside anchor space in the near future. Some observers close to the project believe it is likely that City officials will require an environmental review of whatever Westfield does with that space, and that Westfield may then fold in reviews for alterations to other areas like the Promenade to the larger review process.

The Council is expected to formally discuss Westfield’s withdraw at the next Council meeting where the topic is one of the items on the City Council meeting agenda for the Closed Session scheduled prior to the open meeting this Tuesday, Oct. 20.

Caruso Affiliated would not comment but sources close to the decision-makers at the company said that once the City officially rescinds Westfield’s request for more restaurants, Caruso will withdraw the lawsuit as there would be no reason for it at that point.

Westfield spokeswoman Katy Dickey told Arcadia’s Best on Thursday, “Although we are confident that the City made the correct determination and that it would be vindicated in Court, the opportunity to join Westfield Santa Anita is an attractive one for a number of other retail uses. Consequently, we do not believe that the dedication of time, resources and funds necessary to defend the Caruso lawsuit is warranted under the circumstances.”

Councilman Bob Harbicht, who grudgingly voted to approve the request in July, but not until he chastised Westfield, told Arcadia’s Best on Thursday, “The California Environmental Quality Act is being used by both entities to further their own ends, and not for the purpose for which it was intended. “”Unfortunately, the City of Arcadia and our citizens are caught in the middle. I’m tired of our citizens being used as pawns in a corporate game. (It’s) time for Westfield and Caruso to cooperate for the good of both companies, and surely for the good of Arcadia.”

Said Councilman Gary Kovacic, who was one of the two who voted against the request: “CEQA is a complex area of the law, and there was an honest disagreement among the City Council members as to how much environmental review was required for Westfield’s request. “I’m glad at least some of the litigation between Westfield and Caruso Affiliated will apparently be terminated. Prolonged litigation is not in anyone’s best interests, including those of our city. “My hope is that these two parties will engage in a good faith effort to resolve the remaining issues between them so that we can all move forward as soon as possible.”

Caruso’s proposal for the Shops at Santa Anta was approved by a unanimous 5-0 vote of the City Council in April 2007 but later rescinded as the result of a lower court ruling in favor of Westfield. That suit is still pending due to ongoing challenges and appeals by Westfield.

The latest lawsuit relative to restaurants at Westfield sought to force the City to set aside its approval of a request by Westfield Santa Anita to add three more restaurants (13,500 square feet) to the new Promenade expansion of the mall than previously approved without further study of the environmental impact. The suit countered the City’s argument that the changes meet the standards for a categorical exemption by the California Environmental Quality Act. Attorneys for Caruso, which has seen its own 800,000-plus square-foot Shops at Santa Anita development delayed for years by ongoing lawsuits and appeals against the City from Westfield and its Arcadia First! group over concerns about environmental impact, repeatedly told Councilmen and City staff in writing and in public hearings at Council meetings earlier this summer that approval of Westfield’s request would result in certain litigation.

That was indeed the result.

Nonetheless, the Council voted 3-2 to approve the request, with Mayor Pro Tem Peter Amundson and Councilman Gary Kovacic opposing. Kovacic suggested there was enough question about the legalities concerning environmental law that it would be worth at least taking the steps of studying the potential impact to see what, if any, level of further reporting needed to be done to be in legal compliance. Amundson said he was uncomfortable with Westfield’s “piecemeal” approach to revising their plans.

The suit cites “significant sewage, solid waste, population, land use, traffic, and parking impacts” that would be generated by the “Restaurant Expansion.” The suit goes on to say that “Despite this evidence (previously presented to the City), and the obvious logic that if installing restaurants were not a change in use there would be no need for permission, the City erroneously determined that the Restaurant Expansion was entitled to a Class 1 exemption.”

That determination of exemption, acording to the suit, was “an abuse of discretion, a failure to proceed in the manner required by law, a failure to support their decision with adequate findings, and a failure to make a decision that is supported by substantial evidence in the record,” according to the lawsuit.

Arcadia City Manager Don Penman said Thursday that while the staff believes that City Council’s decision based on staff recommendation to utlize the categorical exemption was correct, “We’re relieved to see the lawsuit dropped so that Westfield can proceed with finding tenants to fill its open spaces.” Westfield, on the strength of its combined retail, entertainment, and food tenants is the City’s largest source of sales tax revenue.

Arcadia taxpayers are not on the hook for any of the legal expenses in either lawsuit, with Caruso covering the City’s costs on the first one and Westfield obligated to do the same in protecting the city against the most recent litigation by Caruso.

Just before the July vote, Councilman Bob Harbicht said he was giving his vote of approval begrudgingly and only after he lambasted Westfield for their “disgusting” behavior in regards to their lawsuit against Caruso that has held the City, the School District, and local residents hostage for several years already.

The other two votes of approval came from Councilman Roger Chandler and Mayor John Wuo, neither of whom is up for re-election next year. Wuo is termed out and will be leaving the Council.

Although there has been little show of interest from local residents in this latest skirmish – not even by the residents who support the concerns of Arcadia First! about the environmental impact of The Shops at Santa Anita – former school board president and Chamber of Commerce board member Mary Dougherty detailed numerous environmental concerns in a recent blog here at

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