Neither side would confirm the deal discussed by their attorneys in court.
In November, Caruso asked the Glendale City Council to approve his plan to demolish the hotel and a vacant building next door, which are in a redevelopment zone. The city, which has the power to condemn the two properties, urged Patel and neighboring property owner Henry David to come up with their own redevelopment plans or sell to Caruso. In January, David sold his 7,000 square-foot brick building to Caruso for an undisclosed price.
The attorneys also disclosed in court on Thursday that they had reached a $500,000 settlement in Patel’s lawsuit against Caruso and the Glendale Redevelopment Agency that alleged construction of the mall damaged his business from 2005 to 2008.
Although Glendale has been represented by an attorney retained by Caruso for the lawsuit, a city spokesman said officials were unaware of the settlement.
“We have not been a party to any meeting or negotiation, and have received no official word or document indicating so,” city spokesman Tom Lorenz said in an e-mail.
The settlement drew the ire of attorney David Casselman, who had represented Patel in the lawsuit until he was replaced last week.
Casselman alleged that Caruso and Patel “colluded” to conceal the true value of the legal settlement, shifting money to the real estate deal, thereby reducing the fees he would receive for his more than two years of work on the case.
Patel dismissed Casselman on Feb. 16, according to court records, a day after Caruso and Patel asked the Glendale Redevelopment Agency to cancel a meeting on Caruso’s development plan so they could talk.
More than 150 people had packed City Council chambers for the hearing, which was postponed.
On Thursday, Caruso’s attorney, Kenneth Bley, denied Casselman’s claims.