The university can build on up to two million square feet in The Village lot.
A proposed lease would allow USC to manage the Coliseum as long as 98 years.
The plan for renovating the University Village passed the committee by a 2-0 vote.
The suit claims the Coliseum Commission violated laws by failing to release some public records and meeting in closed sessions.
The USC Master Plan was developed in 2009 and includes new academic facilities.
Officials look to continue their long-standing relationship despite reports of financial troubles.
California budget problems pushes $54 million price tag on historic sports arena.
As the university’s 20-year Master Plan comes closer to becoming reality, USC continues to consider the community.
The report must be approved by the City Council if USC’s major community development will continue in the future.