TEMECULA - Discussions expected tonight between the City Council and an Orange County firm could end with a new agreement for the development of a property once targeted for a higher education center.

The council and representatives from R.C. Hobbs Company are scheduled to negotiate in a session closed to the public on the 32-acre city-owned property at the northwest corner of Diaz Road and Dendy Lane.

Hobbs and the council are poised to enter into an agreement for the property, which has an appraised value of $15 million, according to Temecula's Redevelopment Director John Meyer.

If such an agreement is reached, action to approve it could take place in the portion of the council meeting open to the public, beginning at 7 p.m. at City Hall, 43200 Business Park Drive.

Temecula Deputy City Manager Grant Yates said Monday he could not comment on the details of closed-session real estate negotiations. It is not clear what Hobbs is seeking to develop there and the details of the proposal remain confidential.

The R.C. Hobbs Company has operated for 30 years in Orange County specializing in residential construction, commercial investments and land development. The company was started by Roger C. Hobbs, who was founding director of the Chapman University Center for Real Estate in 2004 and was named the Orange Chamber of Commerce 2006 Citizen of the Year, according to a company profile.

In May, the city began seeking proposals on the Diaz property from prospective developers with a packet that loosely suggested possible development options. While the city has left the land use open to developers' ideas, it is seeking a clear demonstration of financing for whatever project is proposed.

The property was once intended for a higher education center, but that project headed by Newport Beach developer A.G. Kading experienced numerous obstacles.

There were delays in design and construction in 2005 with the discovery of American Indian artifacts and an excess of ground water.

As those problems were remedied, the discovery in 2006 of a sensitive species of fairy shrimp postponed construction further. While city officials were unsure if the species was classified as endangered, the city erred on the side of caution and relocated the crustaceans to an appropriate habitat.

Earlier this year, A.G. Kading's company, The AGK Group, failed to live up to the terms of its development agreement with the city. The company needed to demonstrate that financing had been secured by March 31. Without the funding in place, the city was unable to transfer the ownership of the land to AGK -- and that killed the deal.

Kading in September filed a claim, often a precursor to a lawsuit, seeking reimbursement of at least $3.3 million for costs and expenses associated with the project site.

- Contact staff writer Nicole Sack at (951) 676-4315, Ext. 2616, or nsack@californian.com.