Laguna Niguel to Sue Builder Over Deed That Sacrificed Land : Development: Council votes to halt construction and mount a legal drive against the developer who built on acreage intended for parkland.

LAGUNA NIGUEL —  After a stormy marathon meeting, the City Council voted early Wednesday to mount a legal drive to void a 1988 deed that officials now say mistakenly gave a developer nearly 100 acres that had been set aside for parkland.

Emerging from a 3 1/2-hour executive session shortly after 1 a.m., the council voted 4-0 to halt further development on the property and to sue Taylor Woodrow Homes California Ltd. over the luxury houses already built on the land.

All public interest in the land, estimated to be worth between $40 million and $70 million, was relinquished in a deed signed by Laguna Niguel Councilman James F. Krembas three months before Taylor Woodrow hired his wife. About 100 homes--and foundations for another 77--now stand on the property, which borders the Salt Creek Corridor Regional Park and is part of Taylor Woodrow’s Marina Hills planned community.

“We are saying that our business is protecting the public’s property and the public’s rights,” Laguna Niguel Mayor Patricia Bates said. “And when necessary we will do it with force.”

Krembas, who is under investigation by the Orange County district attorney, abstained on the vote and sat outside the closed-door council session. After the meeting, he repeated that he had acted unwittingly and suggested that responsibility for the transaction lies elsewhere.

Krembas, who signed the deed while serving on the Laguna Niguel Community Services District, alleged that Taylor Woodrow had misrepresented the deed as part of another, smaller transaction and that the district board’s staff failed to correct the misconception. The Community Services District administered parkland before Laguna Niguel incorporated as a city earlier this year.

The council also voted early Wednesday to instruct the city manager to investigate the actions of James S. Mocalis, the chief district executive who signed the deed along with Krembas, and James S. Okazaki, the attorney who notarized both their signatures.

Krembas said he was pleased by the council action to question others.

“I said there were no improprieties that the CSD committed,” Krembas said. “I did not say there were no improprieties all the way around.”

Okazaki also said he welcomed the investigation into his actions.

“I think the council’s decision to look into the matter, including me and Jim Mocalis, is the proper direction to take,” Okazaki said. “Jim and I know when everything is said and done it is going to be OK.”

Taylor Woodrow President Gordon Tippell appeared stunned by the council’s decision to begin legal action against his firm. Tippell, two lawyers and a bevy of staff members had come armed with stacks of documents and maps to explain the land transfer but were given a total of six minutes to present their case before the vote.

Tippell told the council that his firm’s plans to build on the land, which had been dedicated as open space, were approved by the county in 1985 in exchange for a park and ball fields and other public benefits. Krembas’ signature on the deed “simply formalized this agreement,” Tippell said.

Tippell also contended that the district board had been fully apprised of the land transfer--and in fact voted to approve it--at a meeting on Jan. 20, 1988.

A one-page staff report from Mocalis presented on Jan. 20 recommended that the board approve some boundary changes to Marina Hills. The report explained that Taylor Woodrow was offering to swap eight acres of open space in exchange for three acres of steep slopes that were considered less desirable.

Mocalis’ recommendation, which the board approved, as well as subsequent minutes from the meeting, makes no mention of a deed relinquishing the public’s right to 96 additional acres of open space. However, included in a packet of information prepared by Mocalis for the meeting is a letter outlining Taylor Woodrow’s request that the board sign a quit-claim on the two parcels of land previously offered as open space.

“We are totally confident that the appropriate procedures were followed throughout the approval process,” said Tippell, reading from a prepared statement. “We strongly urge the council not to consider such drastic measures as a building moratorium or litigation until all the facts are known.”

Council members indicated they were unimpressed with the company’s presentation. All three of the members who had served on the Community Services District at the time of the transfer said they never had any intention of signing away the 96 acres and that it had never been discussed.

“I guess we have to go back to the minutes of the meeting,” Mayor Bates said. “The parcels to be deeded as presented (totaled) eight (acres) and that was the focus of the discussion.”

Laguna Niguel Councilman Paul M. Christiansen, who also served on the district board, echoed Bates’ comments and rejected Taylor Woodrow’s contention that the land change had already been approved by the county and therefore required no consideration by the Community Services District.

“What would Taylor Woodrow have done without our deed?” Christiansen asked.

After council members emerged from the executive session, Allan Songstad, an attorney for Taylor Woodrow, attempted to explain the property’s history, offering to provide a lengthy presentation with maps and other documents.

“Even with the threat of litigation . . . we are still willing to open up our books,” Songstad said in a plea to delay the vote.

City Atty. Terry Dixon responded that the council had already considered in executive session each of the factors outlined by Songstad and had still agreed to proceed with legal action against the company.

“Why couldn’t it all have been explained in a letter back then so that we wouldn’t need to be speculating two or three years later what was intended?” Dixon asked rhetorically in an interview after the meeting.

The council’s vote came after an emotionally charged meeting that drew a standing-room-only crowd of residents who packed the tiny council chambers and spilled over into a parking lot. About a dozen residents who told the council they were shocked and saddened by news of the land transfer drew applause and occasional cheers from the audience.

Taylor Woodrow did get an opportunity to present its case to county officials and representatives of the district attorney’s office in a three-hour meeting later Wednesday. John Sibley, deputy director of the county’s Environmental Management Agency, acknowledged that he and other top county land planners met with the firm’s representatives but declined to comment further.