A Valley Village condominium development will be allowed to proceed despite a phone recording in which a city planning official can be heard assuring someone he thought was the developer that a tenants appeal of the proposed project would be rejected.

The City Council's Planning and Land Use Management Committee on Tuesday recommended rejection of the appeal by two tenants who were evicted from the building previously at the 11933 W. Magnolia Blvd. site.

It also recommended that their request for more relocation money be rejected.

The recommendation came as Planning Department officials said disciplinary proceedings are under way against planner John Chiang over the telephone call in which he said the appeal would be rejected because of the position of the department and City Councilwoman Wendy Greuel.

"We are embarrassed by this and apologize to the applicants and the council office," said planner Michael LeGrand. "This is not our policy and we are using it as a training tool on the code of conduct we expect from our planning staff in dealing with applicants and the public at large.

"We take this very seriously."

In his call, Chiang said he was calling for developer Gary Schaffel to say the appeal could not be blocked but that it would be rejected.

Officials with the City Attorney's Office said the call was made after the city Planning Commission decided to allow the 78-unit proposed development.

But tenants who were evicted from the building previously at the site complained that the call showed collusion between the city and developers.

"This shows how business is done at City Hall," said Chuck Tennin, one of those objecting to the development.

Tennin was one of 17 tenants who were evicted to make way for the condominium project.

In addition to objecting to the site, the appeal asked for more traffic studies and higher relocation payments to the tenants.

Councilman Ed Reyes, who chairs the PLUM committee, said officials have advised him they were limited in their ability to require higher relocation payments.

Aides to Greuel said they believed that traffic studies that already have been conducted are sufficient.

rick.orlov@dailynews.com 213-978-0390