Three years after its acquisition of H.F. Ahmanson & Co., Washington Mutual Inc. is still carrying some political baggage.

With Ahmanson, the Seattle thrift inherited a decade-old dispute over a Los Angeles-area real estate development project. Now, it is Washington Mutual's turn to be the target of local public ire.

Indeed, two candidates running for City Council seats in Calabasas, Calif., which is adjacent to the proposed development, say they will be taking their opposition to Wamu shareholders and residents in the thrift's home state if elected.

Thanks to Ahmanson's market presence in California and its earlier hard-won battle to purchase Great Western Financial Corp., Washington Mutual is now the second-largest depository institution in the state, with about $60 billion in deposits. The company also serves as a reminder that acquisitions can bring public relations nightmares.

Development efforts - the project is called Ahmanson Ranch - have met with vigorous opposition. Local environmental groups have called Wamu an environmental bully and have attempted to buy airtime on Seattle radio stations to raise awareness of their cause.

Wamu spokesman Tim McGarry called the campaign "localized" and said that this project, with its associated dedicated parkland, "is the kind Southern California needs to go for if the region is to overcome its current housing crisis." Before the merger, H.F. Ahmanson had donated 10,000 acres to the National Park Service and the Santa Monica Mountains Conservancy.

Washington Mutual has not disclosed the financial value of the project, though it would probably have minimal impact on the mortgage giant's profits. Analysts who follow the company said they have never seen any information about the expense incurred by the company in the ongoing litigation and consultant work.

The most recent flak is not the first Washington Mutual has gotten over the activities of Ahmanson Land Co., the former subsidiary of H.F. Ahmanson. Unlike many other savings and loans in California, Washington Mutual did not even have a real estate development portfolio until it bought Ahmanson.

Litigation had already delayed the project several years by the time Washington Mutual closed its deal for Ahmanson in 1998. The lawsuits have not ceased - the company is a party in at least two cases aimed at thwarting development - but since 1998 the development plans have run into other obstacles.

One of the biggest has been the discovery of two forms of special-status wildlife - the red-legged frog and a population of plant species - previously thought to be extinct. These findings, which Washington Mutual said it made when biologists under its pay were preparing to obtain a wetlands permit, caused Ventura County officials to request an environmental impact report that would supplement one Ahmanson did in 1992.

Meanwhile, officials including Rep. Brad Sherman have spoken out against the project.

All this has delayed what could amount to a huge real estate gain when the subsidiary starts selling pieces of the 3,050 unit project - so large that it will have its own library, fire department, and schools. It may eventually be incorporated as its own town.

Lesley Devine, a council member who is running for reelection March 6, said she and a local attorney, Michael Harrison, are looking at legal actions to take against the development, including a proxy proposal.

"We've been fighting [the development] of Ahmanson Ranch with whatever we can," she said.

Wamu appears willing to stick it out.

Mr. McGarry said that ground for Ahmanson Ranch will be broken in 2002, pending public hearings over the environmental impact report this summer, approval of a habitat conservation plan by the U.S. Fish and Wildlife Service and the California Department of Fish and Game, and approval from the Los Angeles regional planning commission for the removal of nine oak trees along an access route to the projects.

"No one likes controversy, but we were certainly well prepared with the experience that H.F. Ahmanson had with this project," Mr. McGarry said.

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