Developer paid $75K to settle lawsuit brought by former city councilman

​Former Orange Councilman Jon Dumitru (File Photo)

By Daniel Langhorne

A former Orange city councilman and the taxpayer advocacy group he leads received a combined $75,000 to settle a lawsuit they brought against an affordable housing developer and the city. The lawsuit claimed the developer and the city failed to follow the California Environmental Quality Act during the entitlement process.

The project’s developer, Lemon Grove, L.P., which was created by C&C Development of Tustin and Orange Housing Development Corporation, paid $45,000 to Jon Dumitru, CEO of the Orange Taxpayers Assn. The association, which, according to court documents, is comprised of residents concerned about the quality of life in and around Orange, was paid $30,000. These payments included the fees for the attorney representing Dumitru and the association, Greg Woodard of Newport Beach-based Larsen Woodard LLP. “No one in my taxpayer organization receives a salary,” Dumitru wrote in an email. “All funds are used to help the community.”

No paper trail

Court documents identify Orange Taxpayers as an unincorporated association. It is not a 501(c)(3) nonprofit, according to the predominant nonprofit database, GuideStar.

The Orange Taxpayers Association (separate and distinct from the Orange County Taxpayers Association) filed papers with the City of Orange in 2014, but the city clerk has not heard from the organization since then. The California Environmental Quality Act (CEQA) requires developer analyze the impacts of a proposed building project on the environment before it breaks ground. Such conditions as air and water quality, noise, traffic, wildlife and runoff must be considered, and mitigation or management plans identified to lessen negative results.  Citizens may challenge the findings of a given Environmental Impact Report (EIR) by filing a lawsuit against the developer and approving agency (city or county).

A CEQA lawsuit filed in Orange County Superior Court, for example, put a hold on Esperanza Hills, a housing development in Yorba Linda, because the court ruled in July that the developer’s analysis of greenhouse gas emissions was inadequate. Dumitru’s lawsuit hinged on the argument that the city improperly exempted the developer of the 82-unit Lem-on Grove apartments from having to conduct an EIR. Among the project’s alleged flaws, was that its parking spaces were 16-feet-long, instead of the required 18 feet, and that a motorcycle park-ing area was not included. The suit alleged that the “petitioner was harmed by the violation of CEQA.”

Money, not merit

The Orange City Council approved the project in March 2015. The association and Dumitru filed a lawsuit in Orange County Superior Court the following September, asking a judge to vacate the city’s approval and block the city from taking further action on the project until it complied with CEQA.

Alejandro Camacho, a law professor and director of the Center for Land, Environment, and Natural Resources at UC Irvine’s School of Law, declined to comment on the merits of the Lemon Grove lawsuit, but did say CEQA provides the opportunity for people to file cases that are not meritorious, and still get monetary damages from a settlement.

“It is not uncommon, that with significant land use projects, others in the community may bring legal claims challenging the adequacy of the project approvals, including the process under CEQA,” Camacho said. “It is also common for these cases to settle before the case is adjudicated.”

But when a case is settled, the public never learns whether there is any merit to its allegations. “It’s true that people sue and get a payday from it,” Camacho said.

The argument that frivolous CEQA lawsuits are slowing down and increasing the cost of new housing construction is part of the rhetoric on Gov. Jerry Brown’s proposal to reform CEQA, Camacho said. Brown suggests speeding up construction of certain affordable housing projects by allowing them to skip the lengthy case-by-case approval process overseen by cities and counties.

Dumitru said his legal counsel advised him not to answer questions about the CEQA challenges, lawsuit or settlement. “The allegations I brought forward in the lawsuit speak for themselves,” Dumitru wrote in an email.

Far-reaching remedies

Barry Cottle, a principal at C&C Development, directed questions about Lemon Grove to Orange City Manager Rick Otto and City Attorney Wayne Winthers. The case was subsequently settled out of court, and produced the following changes to the project at 1148 N. Lemon St. The property’s seller has retained the right to maintain a billboard on the property, but has agreed to remove it in 15 years. Two motorcycle parking areas have been added to the site plan. Lemon Grove will spend up to $5,000 to install a security camera to record a walking path that connects the project with an existing development called Citrus Grove. A community garden will be installed for at least two years. The property managers can remove the garden if they determine residents aren’t sufficiently using it. The property manager will contract a private security firm if he or she determines hiring is warranted by incidents of property crime or vandalism.

Dumitru, as an injured party in the CEQA lawsuit, is legally entitled to his $45,000 portion of the settlement award. The Orange Taxpayers Association has not yet reported its $30,000 slice of the settlement according to the city clerk’s office.

CORRECTION: Jon Dumitru is registered as the agent for "Orange Tax Payers Association" with the California Secretary of State. However, court documents identify his organization as "Orange Taxpayers Association."