The Santa Ana City Council Monday approved a lawsuit settlement that ended a legal battle between a preservation group and the city over the fate of several old homes in the city’s downtown core.

The terms of the settlement with the Friends of the Lacy Historic Neighborhood would see ten old homes rehabilitated and converted into affordable housing. It also lifts a freeze on demolition of other homes to make way for the Station District housing project, a mixed residential development of rental and for sale homes.

“We’re excited that we’re moving forward to the next phase, and hopefully we’ll break ground by late spring,” said Councilwoman Michele Martinez.

The lawsuit was the second of two filed by the preservation group. The first lawsuit, initiated in late 2009, claimed the city had not done an environmental impact report mandated by the California Environmental Quality Act. In a settlement of that lawsuit, the city agreed to do the report and propose alternatives to the development.

But the group wasn’t happy with the city’s report and filed another lawsuit, said Jeff Dickman, a member of the preservation group. Dickman said that while the group didn’t get everything it wanted, it came to an adequate compromise with the city.

“It [the settlement] certainly has some components that we’re happy with,” Dickman said.

The Station District development plans would also change slightly because of the proposed terms of the settlement agreement, according to a city staff report. The City Council approved in June last year a plan to build 112 rental units and 32 for sale units. Under the revised plan, 99 rental units and 24 for sale units would be built.

The terms of the settlement changed little. But there was one exception — instead of the city paying $72,000 in attorneys’ fees to the preservation group, the city will pay $75,000.

Here are the terms of the settlement agreement, according to a city staff report:

  • The Station District project will be revised to include rehabilitation of approximately 10 single-family and multi-family homes in the Lacy Neighborhood.
  • A single-family home at 613 E. Sixth Street and a duplex at 610-612 E. Fifth Street are to be relocated.
  • 611 N. Minter will be demolished unless a buyer can relocate the structure by May 15, 2011.
  • A $200,000 Lacy Neighborhood Housing Fund would be established. The fund would provide loans up to $25,000 for residents looking to rehab the exteriors of their homes. It would also provide cash to pay for fees related to proposing homes for the state or local historical register, or to apply for the Mills Act Property Tax Abatement Program.
  • The city will prepare an historic survey for homes 50 years old or older in the Lacy Neighborhood. The cost of the survey is expected to be about $30,000
  • The Santa Ana Historic Preservation Society will have the opportunity to inspect homes for salvageable items.
  • For 18 months after the effective date of the settlement agreement, the Friends of The Lacy Neighborhood group will receive notice of city plans to acquire and possibly demolish homes in the Lacy neighborhood. The group will also be allowed to consult the city on such plans.
  • The developer, Santa Ana Station District, LLC, will pay the group’s attorneys’ fees in an amount not to exceed $75,000.

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