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Low-income residents suing over cap increase

November 19, 2010 - 2:30 pm

Five low-income San Diegans are suing the city of San Diego’s Redevelopment Agency, alleging that legislation passed last month to allocate more money to Downtown redevelopment violated the state Constitution and redevelopment law.

The lawsuit (pdf), filed by San Diego attorneys Catherine Rodman and Scott Dreher and Pasadena attorney Christopher Sutton, argues that the way the cap increase happened—via a last-minute bill slipped into the state budget, and without a well-defined plan for how the additional redevelopment dollars should be spent—potentially deprives the plaintiffs of a decent, affordable place to live. All five plaintiffs are on fixed incomes and live in a shelter or in sub-par housing. The cap increase, they argue, should have been done with a focus on creating more affordable housing. Instead, by circumventing the process set out in state law:

“They made it easier to build publicly-funded infrastructure and facilities, and avoided the obligation to allocate more funds for low-income housing as required under the redevelopment law.”

Quick background: When Downtown San Diego was designated a redevelopment area in 1992, a cap—roughly $3 billion—was set on how much property-tax revenue could be collected and reinvested back into the area. That limit’s expected to be hit in 10 years, leaving unfinished projects—including, potentially, a new Chargers stadium. While raising the cap normally requires a finding that an area’s still blighted—as well as a plan for how the additional money will be spent to alleviate blight—the legislation, sponsored by state Assemblymember Nathan Fletcher, circumvented that process.

Though local redevelopment officials have said that what they did was perfectly legal, the lawsuit argues that they violated the law in several ways:

* State law requires the city to have amended its official plan for Downtown redevelopment before increasing the cap;

* The bill lifting the cap, SB 863 was passed one day after being read, violating a rule that says no bills can be passed until three days after they’re read;

* SB 863 was wrongly designated an “urgency” statute to expedite its passage. But, according to the law, urgency statutes must be tied to “the immediate preservation of the public peace, health or safety.”

* SB 863 violated the state Constitution’s single-subject rule, which says a statute can only be about one thing. SB 863 is about two completely different things: property taxes for agricultural land and lifting the Downtown cap.

* No official finding of blight was ever made, a violation of state law.

* Along with the cap increase, contributions to a low- and moderate-housing fund should have been increased.

* Raising the cap means that other local taxing entities—the city, the county and school districts—are deprived of additional tax money they would have received had the cap not been lifted. The way the cap increase was done, the complaint argues, “unlawfully takes revenue from all other local taxing entities.”

Plaintiffs, the complaint says, “bring this action to have this ‘secret statute’ voided.”

Addendum: After this was posted, former City Attorney Mike Aguirre sent out an e-mail with a lawsuit he’s filing against the cap increase. In his complaint, Aguirre argues, basically, that no legal finding of blight was made before the cap increase occurred.

2 Comments leave one →
  1. fishlovesca permalink
    November 19, 2010 - 3:32 pm 3:32 pm

    Completely agree with Rodman’s assessment.

  2. laplayaheritage permalink
    November 20, 2010 - 9:37 am 9:37 am

    Great news that Affordable Housing will have to be increased to 30 percent minimum, instead of the existing 20 percent.

    California Redevelopment Law Health and Safety Section 33333.10. (g) (1).

    Section 33333.10 (g) (1). “Except as provided in paragraph (2) or (3), commencing with the first fiscal year that commences after the date of adoption of an amendment pursuant to subdivision (a), not less than 30 percent of all taxes that are allocated to the agency pursuant to Section 33670 from the redevelopment project area so amended shall be deposited into that project’s Low and Moderate Income Housing Fund for the purposes specified in subdivision (f).”

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