Clawback, Part III: Diridon transfers to be reviewed in July

The post-redevelopment landscape remains somewhat chaotic as new legislation and decisions by the State Controller’s office fill in some of the information and procedural gaps. On April 20, Controller John Chiang sent a letter out to all so-called “successor agencies” that were assigned to clean up after the dissolution of each municipality’s redevelopment agency. The letter asked for all property transfers that occurred after January 1, 2011 to be returned to the successor agency so that they could be disposed of under the auspices of AB1x 26.

Following up that letter was another letter from Stand for San Jose’s law firm, San Francisco-based Pillsbury Winthrop Shaw Pittman LLP. The firm represents the San Francisco Giants, and Stand for San Jose’s astroturf war against the San Jose ballpark project has always been transparent, with the S4SJ throwing everything against the wall to see what will stick. The letter asks for all transfers to be reversed in keeping with the January 1 date, citing that SJRA transferred the land to SJDDA on March 8, 2011, and entered into an option agreement with the A’s on November 8, 2011.

Fortunately, the Controller will start a review of the case on July 9, with the process taking 4-6 weeks. While a decision on the land transfer won’t settle everything in the City and S4SJ’s ongoing legal battle, it should at least guide the next steps regarding use of the land, whether the transfer/option is allowed to move forward or the land has to be sold by the successor agency under new terms. For what it’s worth, the agency’s board consists of City and County pols. The chair is San Jose Mayor Chuck Reed, with general counsel being City Attorney Rick Doyle. Next meeting of the oversight board will be August 9, after the summer recess. The Controller may have rendered a decision by then.

In related news, at today’s oversight board meeting it was revealed that the successor agency expected to have all $86.9 million that the County withheld by this afternoon. This will allow the City to fulfill its August 1 debt service payment obligation. The resolution of this matter also allows the agency to get a letter of credit extension, which was completely up in the air until this week.

Added: The San Jose/Silicon Valley Business Journal reports that the City of San Jose and Santa Clara County worked out a deal in which the County wouldn’t challenge the Diridon transfers. The Controller still has to make its determination.

4 thoughts on “Clawback, Part III: Diridon transfers to be reviewed in July

  1. The San Jose Business Journal has an article today that San Jose and Santa Clara County already have an agreement where Santa Clara County will not challenge the Diridon transfers. It is all up to the State Controller.

  2. I think it’s fair to say that S4SJ’s lawyers are throwing everything they can find at that little lawsuit. I’m not sure what the Giants gain–perhaps a shot at further delay, which could be a bargaining chip.

  3. Xoot, I think you hit on a good point, ‘bargaining chip’. Every hurdle the Giants can cause, real or not, puts them in a better bargaining position. I think it is a fair assessment to believe the Giants see this ‘situation’ from a pure business view. What’s best for anyone other than the Giants is not their concern. Right or wrong, that point seems clear (I lean mostly toward the view that business is business, and the Giants are a business). Hence, if the Giants deep down believe the A’s to SJ is most likely inevitable, they will want to throw everything at the wall. This way they have an additional points to concede that require the other side to concede additional pro Giants items. It’s negotiations 101.
    On an additional note, the link to the story underscores this: SJ has done their homework. From SOS point of view, I know some resent SJ on certain levels. However, you have to admire how forward and proactive SJ has been on the issue of the A’s. As much as anything, Pro Oakland folks should wonder how their own leaders have been so ineffectual and un-proactive for so many years.

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