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Politics & Government

Last-Minute Meeting Scheduled to Avert $67 Million Suit

A Temecula real estate concern plans to meet county lawyers in a last-ditch effort to settle before the multimillion suit goes to trial.

A last-minute meeting was scheduled in hopes of averting a $67 million suit over a flopped construction project in French Valley.

Lawyers for Riverside County and a Temecula real estate concern suing the county are expected to sit down next week for negotiations, just as jury selection began for a trial was being seated to hear the case.

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French Valley Business Center LLC filed a $67 million lawsuit over the county's alleged decision in 2009 to back out of a development that involved erecting a new 140,000-square-foot office complex for the district attorney's and public defender's offices.

During a hearing Monday, Orange County Superior Court Judge Derek Hunt encouraged the two sides to attempt "meaningful negotiations'' before trial proceedings begin.

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A closed-door mediation conference involving the plaintiffs' and county's lawyers is scheduled for Dec. 7. A status hearing in Hunt's Santa Ana courtroom is slated the following day.

If no progress is reported, jury selection is expected to get under way. Attorneys representing Riverside County submitted three separate motions challenging the merits of the plaintiffs' allegations and asking for summary judgment in favor of the county.Hunt rejected each motion.

French Valley Business Center attorney Fletcher Paddison said he has sent more than 20 emails and letters to the county seeking settlement negotiations, but has never received a response.

Bruce Keeton, managing partner of FVBC, alleges a decision by the county in early 2009 to withhold building permits for the development of 10 acres where the D.A.'s and public defender's southwest operations were to be located caused the contractor to default on agreements with subcontractors and abandon an otherwise viable enterprise.

A company statement says FVBC "spent millions of dollars preparing plans, obtaining county approvals, completing grading (and) paying land leases,'' resulting in steep losses when the project was derailed.

In a court brief, the county argues that it is immune from liability because the agreement with FVBC was illegitimate as a result of not being awarded through a formal bidding process. The county's attorneys -- from the law firm Freedland, McKinley & McKinley in San Diego -- also insist that because the plaintiffs failed to go through an administrative appeals process, as provided under state law, they voided their own claim.

FVBC, a partnership between Keeton, who runs Keeton Construction Co. Inc., and David Phares, owner of D.L. Phares & Associates, received lease rights from the county in February 2006 to a 37-acre tract near .

The spot was considered a choice location for construction of a business complex. At the time, the D.A.'s office and the Office of the Public Defender were under pressure from the state to vacate long-occupied space at the Southwest Justice Center.

Without seeking any competitive bids, the selected French Valley Business Center to undertake the project. According to county officials, the plan was for the developer to acquire private financing, and when the office complex was complete, the county would lease the property for the next 50 years.

In the fall of 2008, representatives from FVBC notified the county that because of the economic downturn, obtaining loans was proving difficult, leading to inevitable delays in construction.

The gave the real estate concern until the beginning of 2009 to secure funding to proceed with a scaled-down version of the original project, using 10 acres instead of 37.

According to the lawsuit, in March 2009, the plaintiffs' applications for building permits were denied by the county, which stated that the developer had missed a February deadline to seek permits.

The plaintiffs argue the only deadline they were aware of fell on April 1, 2009. Keeton characterized the county's earlier date as a "secret deadline.''

The county settled on an alternate relocation plan for personnel from the district attorney's and public defender's offices. The French Valley Business Center filed suit in February 2010.

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