MTA will lay out $2.4 million for Denny's site it paid to shun before.

The MTA is paying $2.4 million to acquire a piece of contaminated property near Union Station that years ago its predecessor agency paid the same amount not to acquire.

The land involved is a 65,000-square-foot parcel that currently includes a Denny's restaurant and parking lot. It became contaminated before the turn of the century when Southern California Gas had a coal gasification plant on the site. During World War II, it was used as a butadiene plant.

In the 1950s, SoCal Gas sold the property to Maier Brewing Co., which operated a brewery on adjacent property. Maier later leased part of the property out for use as a Denny's restaurant.

In the 1980s, one of the MTA's predecessor agencies - the Southern California Rapid Transit District - decided it wanted to put its Red Line subway through the property, and it began condemnation action.

Property condemned

When it was discovered that the land, and other nearby property on the planned subway line, was contaminated with toxic gas, the RTD changed its mind, and changed its route. But the change of heart came too late for Maier, which was already involved in the RTD condemnation action and tried to force the agency to take the property.

"The Maier condemnation thing went on for years," said Suzanne Gifford, who was the top RTD attorney at the time. "That Maier case went on like something out of Charles Dickens."

Jeff Lyon, the attorney who handled the case, said the RTD had already paid for the property (he couldn't remember how much exactly), and Denny's had already made arrangements to move, when the Red Line route was changed. He said the RTD traded for a smaller piece of nearby property also owned by Maier and had to pay Denny's expenses. MTA spokesman Steve Chesser said the whole deal cost the RTD about $2.4 million.

Now the MTA has decided it needs the property after all - to build a "flyover" ramp for its Union Station Gateway Project.

Clean-up eyed

The Gas Company has agreed to pay for the clean-up under a consent order with the California Department of Toxic Substances and is studying the situation. The MTA is in negotiations with the Gas Co. regarding how much remediation is necessary.

Meanwhile, Denny's will be inconvenienced again, and will have to be compensated again, although the restaurant may not have to permanently move, Lyon said.

Chesser said the property is currently worth less than the MTA is paying but will be worth more after the contamination is cleaned up.

An attorney with S&P Co., the real estate arm of Maier, in the San Francisco Bay Area refused to comment on the situation, insisting that saying anything at all, or even giving out the name and phone number of S&P's general counsel in L.A., could cost him his job.

The manager of the Denny's restaurant could not be reached for comment.