ESCONDIDO -- A tug of war that had two families vying to buy a piece of land Escondido acquired a decade ago as part of an eminent domain proceeding ended Wednesday, leaving both sides feeling dragged through the mud.

The City Council agreed to sell the 10-acre site at the end of Puebla Street to the Redding family for $596,000. The Reddings had sold the land to the city for $345,000 in 1995, after the council declared it needed the property for a water reclamation project.

But the water project was later abandoned, and the city recently made plans to sell the property for $745,000 to Clifton C. Morgan Construction Inc., a family-run development company.

As part of its decision Wednesday, the council placed a condition on the sale that, if the Reddings ever decide to sell the property, the Morgan family would have the first right to purchase it.

Mayor Lori Pfeiler said the council had been placed in an "impossible situation," and that she and her colleagues were trying "to do the right thing."

But the council's decision left both sides feeling wronged.

"Although we agreed that we would pay that amount, I'm disappointed (the council) didn't take into account more of our losses," Ann Redding said by telephone after the decision.

The family has maintained it ended up having to pay nearly $155,250 of the original sale price in capital gains taxes.

And Redding, who lives in the Los Angeles area and did not attend the meeting, said she does not like the idea of being "bound to sell" to the Morgans.

Meanwhile, Diane Morgan told the council that her family had "played by the rules" and that the council had agreed in their discussions to sell them the land to build three houses.

"Making a deal with us and then considering reneging on that deal is clearly wrong," Morgan said. "Offering the same piece of land to two parties at two different prices … is clearly wrong."

The Reddings have vigorously tried to buy back the land after learning of the impending sale to the Morgans, but negotiations with the city collapsed over the price.

Initially, the city agreed to sell the land back to the Reddings for $596,000, which included the original purchase value, $13,500 in property taxes the city has paid and $238,000 to compensate for lost interest returns had the money been placed in Escondido's investment portfolio.

The Reddings gave a counter offer, saying they were willing to pay $358,000 to cover the original purchase price and taxes, but no lost interest. Recently, however, the family agreed to the price set by the city after the council made it clear it was poised to sell the property to Morgan.

The Reddings' back-and-forth with the city earned them the support of county Supervisor Pam Slater-Price, who last week sent a letter to the city urging the council to return the land to the Reddings for the family's original asking price of the purchase value and taxes paid.

There was little public show of support for the Reddings on Wednesday, and both speakers that addressed the council urged selling the land to the Morgans.

"You have no obligation to (the Reddings)," said Dennis Kerr, an Escondido resident. "You do, however, have a serious obligation -- a legal, moral and ethical obligation -- to the residents of this city, your city and my city."

Councilman Ron Newman said he and his colleagues wanted to "make it right" but were burdened by the need to look out for the public's interest and money.

The council agreed to the sale in a 3-1 vote with Councilman Ed Gallo opposed. Councilwoman Marie Waldron, who missed the meeting because of illness, had made public statements saying she favored returning the land to the Reddings for $358,000.

An emotional Morgan said she and her husband would need to "consider what (our) best options are" as she left the chamber after the vote.

Contact staff writer David Fried at (760) 740-5416 or dfried@nctimes.com.