CITY PROLONGS FIGHT OVER RECOVERY PLAN.

Byline: Sherry Joe Crosby Daily News Staff Writer

Hoping for victory in the state Supreme Court, the city is extending the fight over its beleaguered redevelopment and earthquake recovery plan, which recently suffered a blow in a state appellate court.

The Santa Clarita City Council voted unanimously Tuesday to file a petition for hearing before the Supreme Court by Jan. 31. The court has 60 days after receiving the petition to decide whether it will hear the case.

"We have to pursue all avenues to get a redevelopment agency," said Councilwoman Jan Heidt. "What you have is a community that desperately needs this to put us on our feet."

In December, the Second Appellate District reversed a July 1994 Superior Court decision by ruling that the $1.1 billion plan is not exempt from the California Environmental Quality Act, which requires an environmental impact report for construction projects except during emergencies.

In its decision, the three-judge panel rejected the city's argument that building roads and other infrastructure to minimize impacts from future disaster is a valid exemption. The court also said the plan placed too much emphasis on nondisaster-related projects.

If granted a hearing, City Attorney Carl Newton said he would argue that Castaic Lake failed to exhaust all its options and that the appellate court erred by requiring the city to provide an environmental impact report for the plan.

"It is really defeating the purpose of the disaster law," Newton said of the ruling. He added that an environmental impact report could take up to a year, seriously delaying the redevelopment plan.

The Castaic Lake Water Agency filed the lawsuit against the city in 1994, charging that the city's redevelopment agency attempted to unlawfully exempt nondisaster-related improvements from environmental law. If the city prevails, the water agency stands to lose up to $100 million in property tax revenue over 30 years.

The lawsuit is one of two that Castaic Lake filed challenging the plan, formed under a state disaster law shortly after the January 1994 Northridge Earthquake. The second suit, which focuses on legal procedures allegedly violated by the city, is pending in Los Angeles Superior Court. A preliminary ruling is expected later this month.

The 30-year plan would use a portion of property taxes to finance various improvements throughout the city, which suffered $144 million in private property damage. The plan encompasses 18,651 miles of roads and includes revitalizing older areas, such as downtown Newhall, improving storm drains and building a network of hiking and bike paths.

Castaic Lake officials said they are prepared for a hearing before the Supreme Court, armed with the backing of the state appellate court and state Attorney General Dan Lungren.

"I'm not concerned," said Robert Sagehorn, Castaic Lake's general manager. "We think the unanimous ruling of the three (appellate) judges - that it was not right - should have been enough."

Frustrated city officials said the litigation has stalled their efforts to repair quake damage, including nine severely damaged properties in the Valencia Hills neighborhood.

"This continues to drag on and on," said City Manager George Caravalho. "Many of these needs continue unmet. We continue to have deterioration in some neighborhoods."