COURT BACKS CITY, MALL DEVELOPER GENERAL GROWTH CHALLENGE REJECTED BY APPEALS COURT.

Byline: Alex Dobuzinskis Staff Writer

GLENDALE - The state Court of Appeal on Thursday ruled in favor of the city and developer Rick Caruso, allowing an outdoor mall project to move forward despite a challenge by the owner of its established competitor, the Glendale Galleria.

Caruso's $264 million Americana at Brand project would be located near the Glendale Galleria, which is owned by General Growth. The company sued Glendale last year, arguing that the city failed to consider the historical significance of a fire station and a telephone company building on the project site.

But the three-judge panel on the state Court of Appeal disagreed.

``I don't think (General Growth's) concern's been about (the project's) design and I don't think their concern has been about the historic nature of some of these buildings,'' said City Manager Jim Starbird. ``I think it's been one of delay and they've been pretty effective at that.''

General Growth could appeal to the California Supreme Court, and the city will need to wait a month to allow the company that option, officials said. If no appeal happens, the two solitary buildings on the mostly graded 15.5-acre project site can be demolished and construction of the project can go forward.

General Growth declined to comment.

``We have not seen the ... ruling and cannot comment until we have had a chance to fully read the ruling,'' said company spokesman Arthur Sohikian.

The city looks forward to receiving tax revenue from the Americana at Brand and it has invested more than $77 million in the project, which would be located at Colorado Street and Brand Boulevard.

The fire station that General Growth's suit contended should have been deemed historically significant was built in 1929 and radically modified in 1958. A former Pacific Bell building on the site was built in the 1940s but was not considered architecturally unique, city officials said.

The lawsuit also challenged other aspects of the city's approval of the project, including its reporting on financial arrangements. But the Court of Appeal ruled in favor of the city on those matters as well.

Caruso hopes the project can open in fall 2007. Meanwhile, construction costs have risen since work stopped on the project, and officials said that fighting the lawsuit cost the city more than $1 million.

Caruso, whose other properties include The Grove at the Farmer's Market, said General Growth was wrong to try to block the Americana at Brand project.

``I've never tried to stop a competitor from building near us,'' Caruso said. ``I think it's just bad business. It's unethical and, I know it sounds corny, but it's un-American. This country grew because of competition.''

Alex Dobuzinskis, [phone]

alex.dobuzinskis(at)dailynews.com