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Commenter urges settlement in years-long DLS Investments litigation over Costa Mesa properties
Summary
At the Oct. 7 City Council closed-session meeting, a public commenter involved in the DLS Investments cases urged the city to settle years of litigation over two properties, saying demolition plans were based on an incorrect unit count and that appellate filings support allowing more units.
A public commenter at the Oct. 7 City Council closed-session meeting urged the city to settle long-running litigation involving two properties identified in the docket as 40 Fair Drive and 1779 Newport Boulevard.
The commenter, Mr. D'Alessio, who said he had owned and later sold the properties, told the council the litigation has stretched “five years” in some cases and that eviction actions on one property occurred “over six years ago.” He said he had offered a settlement to avoid further liability for the city.
The remarks matter because the cases appear on the closed-session agenda under existing litigation. If the council and its attorneys discuss settlement or litigation strategy behind closed doors, it could affect whether the city proceeds with demolition or pursues other remedies.
D'Alessio described disagreement over the number of units the city allowed on one parcel. He said the receiver’s rehabilitation plan was based on a seven-unit assumption, and that the receiver therefore proposed demolition; D'Alessio said that assumption was wrong. He told the council he had provided an email from “ACD” stating that “18 units plus 4 ADUs could be done” and said the city and Housing-related authority later agreed with him in an appellate hearing. “So this whole notion of demolition is mute because it's gotta be based on 18 units, not 7,” he said.
D'Alessio also said the city had continued to file amended complaints and motions for summary judgment even after he sold the properties “two years ago.” He said he had prevailed on summary-judgment motions so far and that he had filed a federal civil-rights claim, characterizing part of the dispute as a taking.
The council did not take a public vote on the substance of the DLS Investments disputes during the session. The city attorney later read the closed-session agenda items into the record, which included existing litigation entries naming the DLS Investments cases (listed by city staff for closed-session conference with legal counsel). The council then recessed to closed session; no public action or formal settlement was announced in the public record at the meeting’s close.
The record shows the city will discuss multiple litigation matters in closed session, including the DLS Investments matters, but the public record from Oct. 7 does not show any negotiated settlement or decision reached in open session.
