LANDOWNER PROCEEDS WITH SUIT, BUT CONTINUES NEGOTIATIONS.

Byline: Heather MacDonald Staff Writer

SANTA CLARITA - The owner of the Bermite munitions factory property served its long-pending lawsuit against the city of Santa Clarita on Friday, despite progress in settlement talks between the two sides.

Los Angeles Superior Court Judge Aureilo Munoz ordered Phoenix-based Remediation Financial Inc. to proceed with the lawsuit it filed in July or face its dismissal on Monday.

Representatives of RFI claim city officials failed to honor the 1996 development agreement and a 1999 memorandum of understanding for the 2,911-home Porta Bella tract.

RFI Director of Development Gary Brown said the company only reluctantly served the lawsuit because it was left with no choice by the judge.

``We'd prefer to spend our resources on cleaning the site, rather than on legal fees,'' Brown said.

City Attorney Carl Newton said the negotiations would continue.

``This doesn't really change anything, although now we will be forced to defend the suit actively,'' Newton said.

As a sign of good faith, RFI did not serve the City Council, the individual council members, the William S. Hart Union High School District or the developer of a nearby business park, said attorney of Wayne G. Souza.

Souza also asked Newton to consider an agreement that would allow RFI to refile the case, regardless of the statute of limitations. If such an agreement, which would need to be approved by the City Council, is reached, Souza said RFI is prepared to allow the judge to dismiss the current case next week.

RFI is also considering dismissing three of the five causes of action against the city, Souza said.

Brown said he was not sure what those causes were or what was behind the move.

Company officials say the project will not be feasible without a agreement allowing it to be built in phases, which city leaders agreed to consider in the memorandum of understanding.

Santa Clarita LLC, RFI's local development arm, is out of cash and officials have said the company cannot attract new investors without an agreement allowing the property to be developed in phases as each is cleaned up.

In return for the memorandum of understanding, the company gave the city a $1 a year lease of the Santa Clarita Metrolink train station, as well as permission for Golden Valley Road to be built across the eastern portion of the polluted property.

The city sped construction of Golden Valley Road to allow the new Golden Valley High School and a cross-valley connection to be built as quickly as possible.

RFI representatives contend that violated the development agreement, which prohibited any construction on the site until all 996 acres were cleaned of 30 to 40 toxic chemicals and cleared of unexploded ordnance waste left behind after decades of defense work.

Earlier this month, the Planning Commission found that RFI violated the development agreement itself, primarily by not making any progress on the cleanup of the site and by terminating the city's lease of the Metrolink station.

The state Attorney General's Office is considering taking action against RFI for not complying with the agreement it signed with the state Department of Toxic Substances Control, the agency overseeing the clean up.