Heads I win, tails you lose (redevelopment lawsuit)

I’ve been flipping through the 126-page court filing (warning: 12 MB PDF) for the redevelopment lawsuit, and to be completely honest, I don’t know how lawyers get through all of this stuff. Court filings aren’t page turners – well, unless you’re Frank McCourt. My enjoyment of the literature aside, there are some interesting things in the document.

As I mentioned Monday, the lawsuit is being filed by The League of California Cities, California Redevelopment Association, San Jose, and Union City. Several other cities have posted their declarations of support, including Brentwood and Oakland. Oakland’s declaration was made by Mayor Jean Quan. San Jose’s accompanying declaration was made by Mayor Chuck Reed’s Chief of Staff, Peter J. Furman. Both cities cite their inability to make the “ransom” payments required to continue operating their redevelopment agencies. Both mention how much redevelopment has helped their cities. Neither mentions a ballpark in any way, though that’s to be expected (ballparks are luxury items, which makes them not politically expedient). Furman argues that being forced to pay the state puts them at risk of breach of contract with Santa Clara County. Quan points out that making its payment to the state puts the police/fire retirement funding at risk. She does point out that Oakland could make a payment by making severe cutbacks to ORA, similar to what San Jose did. Although Furman doesn’t say it, San Jose could sell additional land (or have certain payments to SJRA made earlier, such as Lew Wolff’s price for Airport West).

On the other hand, Union City’s declaration was very specific in how it describes its one major redevelopment project, the TOD village east of the Union City BART station, as a potential victim.

What do the cities want?

  • A full hearing by the California Supreme Court to debate the twin laws’ constitutionality.
  • A stay to prevent major actions that could adversely affect redevelopment until the hearing above is held, preferably by August 15.

The argument by the petitioners is that if the laws – which are already in effect – are allowed to progress with the dismantling of RDAs, there may be nothing left to recover even if a lengthy lawsuit eventually reverses the law. Unfortunately for proponents of redevelopment, the court is not expected to hear the case until September. That puts the various agencies in a really tough spot since dissolution is supposed to start as early as October 1. Any city that decides to pay-to-play has to declare that they will by that date, which makes the dissolution “temporary” until 2012. The first payment is due in January 2012.

When the state budget talks were in its final hours, several legislators pushed hard for promises to accommodate cities so that the eventual payments wouldn’t be so crushing. That caused a several hour delay in getting the budget approved. It’s unclear as to the effectiveness of that tactic, but we will see if it bore fruit over the next few months. Some cities may be looking for a more manageable payment schedule or payment amounts. Others are ready to swallow their medicine right now so that they can continue to operate. The state’s stance that the laws will be upheld in court has not wavered. From a pure fiscal/basic services standpoint, you’d like to think that cities like San Jose and Oakland have backup plans to address their budget problems if redevelopment is killed. So far, they haven’t shared what those plans are. That’s not just scary from an A’s future standpoint. It’s much bigger than that.

10 thoughts on “Heads I win, tails you lose (redevelopment lawsuit)

  1. So is the bottom line that San Jose only has to acquire $20 mill worth of properties, which Wolff can do himself, while Oakland needs tens and tens of millions for business relocations, property acquisitions and infrastructure improvements and doesn’t have the redevelopment $$ to do it now? And isn’t Oakland shoring up its budget by selling the Kaiser Convention Center to the redevelopment agency anyway?

  2. How did San Jose and Union City end up as Co-petitioners of the suit? Why didn’t they just file a declaration of support like Oakland and many other cities did? Does this mean that SJ and UC are sharing the legal costs? Were SJ and UC chosen to be included b/c their situation is more dire than other cities or were they the only two cities that stepped forward and wanted to be a part of the suit? Is there any strategic advantage to being a part of the suit if it is successful? I’m not sure if I know what to make of this, with respect to the A’s situation, unless I understand more about why SJ is part of the suit and Oakland is not.

    • @gojohn10 – I recall from reading the SJRA budget that they had set aside some money for legal actions, $2+ million I think. Since almost every city is part of the League of CA Cities, they paid in and are indirectly supporting the lawsuit. If anything, I suspect that SJ and UC are involved because they felt they could afford to be in terms of reputation and political risk. That isn’t stopping LA and San Diego from hedging their bets.

      @eb – I haven’t heard anything since Wolff’s interview. I would expect some comment from the Mayor when it happens. Though really, what can you expect her to say? She’s handcuffed right now.

  3. ML, a tad off topic, but do you know if or when Wolff and Quan are supposed to meet this month? Are we going to get any insight in regards to what was/will be discussed?

  4. @ML–Quan needs to have a few beers with Lewie, loosen him up a bit, and maybe he’ll come around and work with her on something if SJ gets denied. I know it’s fantasy land for me again, and in reality, he’ll say to her like he did to Dellums, “don’t break your pick on this one. “

  5. The only way San Jose gets “denied” is if they absolutely can’t acquire the last two parcels at Diridon (which I think will happen with Wolff’s help and regardless of what happens to RDA). The only drawback at this point for SJ is the short term future of the Autumn Parkway project. Perhaps bonds could be raised through the Diridon Authority for that project.
    If SJ was going to be “denied” just because Frisco or Bud says so, that would have happened over 856 days ago.

  6. @ML
    How does the death of the RDAs affect the build out of the Diridon area in-fill between the proposed Cisco Field and the Shark Tank?

  7. “If SJ was going to be “denied” just because Frisco or Bud says so, that would have happened over 856 days ago.”
    @Tony D. – Why? What incentive does MLB have to tell San Jose to stop trying to put together a stadium deal? Even if Bud had no intention of letting the A’s go to San Jose, or if he considered SJ only a fallback, the continuing South Bay effort keeps pressure on Oakland and other Bay Area jurisdictions to get something done.
    Unfortunately I think the opposite is true. If all SJ needs to finalize its deal is to acquire $20 million land parcels that Wolff is willing to pay for himself, this thing would be done and publicly announced by now. As it is, Bud Selig won’t even give the Mayor of San Jose the routine courtesy of acknowledging his letters. That suggests to me that either (1) T-rights are a much bigger, messier, and more expensive obstacle than most of the SJ backers realize, or (2) Bud would prefer not to allow the A’s to move to San Jose for some other reason.

  8. @Simon- if the intent of keeping SJ in the game is just to pressure Oakland it doesn’t seem to be working–given they have yet to deliver an EIR–

    Second–most likely a lot more in play for the final 2 parcels than just have LW write a check–perhaps even ED—a city would need to be the acquirer for ED to happen–

  9. GoA’s–good points. For the record, I don’t think SJ is in fact being used solely as leverage by MLB. Just that IF it were truly the case that the SJ deal was practically shovel ready, then MLB’s total stonewalling of SJ officials would strongly indicate that they did not like the SJ option.

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