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City offers $50 million to settle De La Fuente lawsuit; 'progressive' ideas floated

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In an effort to end nearly two decades of legal wrangling, the city of San Diego offered developer Rocque De La Fuente $50 million Tuesday to settle three pending lawsuits.

De La Fuente and his attorney said they will take the offer under advisement, but are looking for more "creative ways" to solve litigation, which began in 1987.

"It's a perfect example of why the city is in so much trouble," said Vincent Bartolotta Jr., who represents De La Fuente. "They wait until the 11th hour to make an offer on (a verdict) that's worth more than $100 million at this point. Then they try to sneak in two other cases that are totally separate from this particular case. It's actions like that that prevent people from dealing with the city."

A San Diego jury awarded De La Fuente $94.5 million in January 2001 after the developer sued the city for allegedly ruining the Border Business Park in Otay Mesa. De La Fuente's lawyers argued that the city breached a 1986 development contract, forcing the park into foreclosure.

The original award was reduced to $91.7 million following post-trial motions filed by Latham & Watkins, but now -- thanks to interest that accrues at $400,000 a month, according to Bartolotta -- the city owes De La Fuente in excess of $120 million.

An appellate ruling is expected within the next week or so from the California Court of Appeals in Riverside, according to Don McGrath, executive assistant city attorney.

There are two other cases involving De La Fuente properties -- National Enterprises and Otay Acquisitions -- currently pending in San Diego Superior Court.

"It's a little disappointing we have not been able to settle these cases because we think the city is using its resources as best as it can given its limited resources," McGrath said.

"We've done our best to settle with them, and we've been unable to even receive a global demand from them."

McGrath is not optimistic the offer will be accepted.

"They haven't been very receptive to date," he said. "They haven't even given us a counter (offer). They keep trying to settle the Border (Business Park) case with no mention of settling the other two."

De La Fuente painted a different picture, saying he offered to settle all of the cases for $25 million in 2000 a month before the Border Business Park trial. He said the only offer the city made, prior to Tuesday, was for $1,000 in 2000.

"From the very day this verdict came in, we have offered to sit with them and to be very open-minded about progressive ways to make it a win-win settlement," Bartolotta said. "We have constantly been rejected."

Among the progressive ways De La Fuented listed was a three-way deal involving Qualcomm Stadium, the city and the Chargers, who are looking to build a new stadium on the land.

Air rights, water rights and using De La Fuente property for a landfill are others.

"The city has a lot interesting assets," said De La Fuente, who wants to sit down with Mayor-elect Jerry Sanders and City Attorney Michael Aguirre.

"I look forward to meeting Mayor-elect Jerry Sanders," De La Fuente said, "and try to come up with creative ways where it won't cost the city any money, where it won't cost the taxpayers any money, and it could be a win-win for ... the city, us and the citizens of San Diego."

He also wants a public apology.

Bartolotta took the city's latest offer as a positive sign.

"I'm thankful they made an offer at all because frankly it's the first offer; but they have to be realistic about it, and this is not realistic."

While terming it the "best and final" offer, McGrath seemed to leave some wiggle room.

"We're here to listen," he said. "We're always here to listen. We're a governmental entity and that's our job. But we think we've gone the extra mile, and we don't think they have."

Related Article:

San Diego, De La Fuente settlement talks break down (Aug. 18, 2005)

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