Grantville Action Group v. City of San Diego CA4/1 (2013) · DecisionDepot
Grantville Action Group v. City of San Diego CA4/1
California Court of Appeal May 17, 2013 No. D059318Unpublished
Filed 5/17/13 Grantville Action Group v. City of San Diego CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
GRANTVILLE ACTION GROUP, D059318
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2008-00092628- CU-MC-CTL) CITY OF SAN DIEGO et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of San Diego County, Joan M.
Lewis, Judge. Affirmed.
Law Office of Craig A. Sherman and Craig A. Sherman for Plaintiff and
Appellant.
Kane Ballmer & Berkman, Murray O. Kane, Donald P. Johnson; Thomas E.
Montgomery, County Counsel, and William A. Johnson, Deputy County Counsel, for
Defendants and Appellants.
In May 2005 the City of San Diego (the City) and its redevelopment agency (the
Agency) adopted the Grantville Redevelopment Project (GRP) finding that the area
within the GRP was blighted and required action by the Agency to remedy that blight.
In this action, plaintiff Grantville Action Group (GAG) sought to challenge, under
the Community Redevelopment Law (CRL), Health & Safety Code (all undesignated
statutory reference are to the Health & Safety Code) section 33000 et seq., decisions
made by the defendants City, the Agency, and the County of San Diego (the County)
(collectively referred to as defendants) arising from a settlement of the County's lawsuit
challenging the GRP. Specifically, GAG asserts that the County's lawsuit, and the
subsequent settlement agreement, improperly guaranteed the County would recapture 100
percent of its projected $49 million in lost tax revenue from adoption of the GRP. GAG
asserts that this "revenue shifting scheme" is "exactly the type of action the Legislature
sought to prohibit in enacting the [CRL]." Further, GAG asserts that these actions
violated the legal doctrine that you "cannot do indirectly what the law (and Legislature)
prohibits [you] from doing directly."
Following a court trial, the court issued a decision in the City, County and
Agency's favor, finding the CRL does not "prohibit[] the transfer of monies in this
manner."
On appeal, GAG asserts the court erred in its ruling because (1) the settlement of
the County's lawsuit violated the CRL, which established a pass-through formula, offset
requirements for such projects, and other requirements for redevelopment plans; (2) when
approving the transfer and use of a redevelopment tax increment for public facilities, it
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was inappropriate to reference an entire redevelopment plan, with no identified project;
and (3) the County's agreement to transfer and use the GLP's tax increment for
construction/improvement of its County Administration Center (CAC) was in violation of
the restrictions set forth in the CRL. We affirm.
FACTUAL BACKGROUND
A. The GRP
In May 2005 the City and the Agency adopted the GRP. In the GRP, the City and
Agency found that the area within the boundaries of the GRP was blighted and required
action by the Agency to remedy that blight. The objectives of the GRP included the
following: (1) eliminate and prevent the spread of blight and deterioration of the area; (2)
improve traffic flow through the development of a circulation network to the Mission
Gorge corridor and Grantville industrial area; (3) improve public infrastructure, including
storm drains to Alvarado Creek and the San Diego River, widening existing roadways
and sidewalks or creating new ones, and undergrounding utilities; (4) alleviate the
shortage of commercial and industrial parking; (5) streetscape enhancements and
revitalization of incompatible uses and obsolete buildings; (6) revitalize the commercial
corridor along Mission Gorge Road; (7) expand and add community park and recreational
facilities, including along the San Diego River.
The Agency also adopted a five-year implementation plan (Five-Year Plan), which
provides a general outline of the actions the Agency may take in eliminating blight in the
Grantville area. The actions proposed during the first year of the Five-Year Plan involve
actions relating to the objectives described, ante, including, among other items: (1)
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planning for Mission Gorge Road traffic improvements, including the Interstate 8
interchange at Alvarado Canyon Road; (2) pedestrian circulation improvements along
Alvarado Creek, focused on the Grantville Trolley Station; (3) identifying storm drain
improvements; (4) developing opportunities of the San Diego River Master Plan once it
is finalized; and (5) monitoring, coordinating and expanding activities with other public
agencies, including business outreach and marketing, housing programs, streetscape,
lighting and landscape improvements.
B. The County's Lawsuit
The County filed an action challenging the adoption of the GRP. The County's
complaint alleged, among other claims, that there was insufficient evidence of physical
and economic blight in the Grantville area.
Atomic Investments, Inc. (AII) also filed a case challenging the GRP. AII
challenged the inclusion of two of its properties (the Discount Tire property and the
Veteran's Administration property) in the GRP.
The County and the AII cases were subsequently consolidated (the County Case).
GAG did not participate in the County Case. Thereafter, the County Case settled.
C. Hearings on GRP
On July 29, 2008, the San Diego City Council (City Council) and the Agency's
board (the Board) held a joint public hearing on the subject agreements. Proponents and
opponents of the proposed settlement and the related agreements were heard. The
opponents, including GAG's representative, Brian Peterson, criticized the Agency's
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finding of blight in the Grantville area and the Agency's possible use of eminent domain
relating to the GRP.
At the conclusion of the public hearing, the City Council and Agency's board
adopted resolutions approving four cooperation agreements by a vote of seven to one and
made findings required by section 33445. The Agency's board also adopted a resolution
to settle AII's claims in the County Case by a vote of eight to zero.
Similarly, on September 23, 2008, the County Board of Supervisors held a public
hearing and adopted resolutions relating to two cooperation agreements and made
findings required by section 33445
Counsel for the opponents of the settlement submitted a letter to the County and
made a presentation in opposition to the settlement and its related agreements. GAG also
submitted a letter and made a presentation in opposition to the settlement.
The settlement agreement, which included four cooperation agreements, was
approved by all parties on August 29, 2008. The four cooperation agreements and
resolution that effectuated the settlement consist of the following:
1. The transit line improvement cooperation agreement, which provided that the
Agency would transfer $31.36 million to the City for the construction of improvements to
the C Street trolley line downtown as part of the Centre City Redevelopment Project.
Those improvements were required to permit a direct transit line for trolley line riders
between Grantville and downtown, thereby increasing Grantville public transit use and
alleviating existing transit congestion in Grantville.
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2. The North Embarcadero improvements and facilities cooperation agreement
(North Embarcadero agreement) provided for the Agency's payment of $31.36 million in
Centre City Development Corporation (CCDC) funds to the County for use in
constructing improvements relating to the County Waterfront Park Plan along the harbor-
front area of downtown, so long as they are consistent with CRL.
3. The joint projects cooperation agreement provided for the payment by the
Agency of $7.84 million for the development of projects recommended by the County
that benefit the Grantville Redevelopment Project area consistent with the CRL.
4. The affordable housing credit and allocation agreement, which provided that
the County would receive $9.8 million in affordable housing credits towards its share of
the regional housing needs allocation.
5. The AII resolution, which provided that certain properties owned by AII would
not be subject to eminent domain.
On September 8, 2008, pursuant to the settlement agreement, the court issued a
judgment on validated actions. That judgment validated the GRP and found that the GRP
was legal and valid in all respects. No party to the validation action filed an appeal.
D. The Instant Action
On September 26, 2008, GAG filed a complaint and petition for writ of mandate
seeking to invalidate the resolutions, actions and findings made by the City, the Agency,
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and the County, related to the GRP.1 In its complaint and petition, GAG challenged
three of the four cooperation agreements - the transit line improvements agreement, the
joint projects agreement, and the North Embarcadero agreement GAG also challenged
the resolution that settled AII's claims, but that claim was subsequently dismissed by the
court.
The trial in this matter was heard on November 16, 2010. At the conclusion of
trial, the court took the matter under submission.
On December 20, 2010, the trial court issued its tentative statement of decision. In
that tentative statement of decision, the trial court made several findings. As to GAG's
argument that the defendants "cannot do indirectly what [they] cannot legally do
directly," the court found: "Although there is some appeal to this argument, the Court
does not believe the law prohibits the transfer of monies in this manner. The Court
agrees with the thoughts expressed by the Attorney General's office that 'although it
might be questioned whether this arrangement carries out the Legislatures' [sic] intent in
adopting the anti-pass through provision in 1993, it appears to be technically permissible.'
[Citation.] [¶] For the foregoing reasons—and for the reasons discussed below—this
Court concludes that the appropriate findings under [section] 33445 were made and that
the settlement and related transactions did not violate pass-through restrictions. The
motion for judgment on this issue is therefore denied."
1 A complaint filed by an interested person to invalidate a public agency matter is commonly referred to as a "reverse validation" action. (Bonander v. Town of Tiburon (2009) 46 Cal.4th 646, 656.) 7
Footnote 5 in the court's tentative decision states: "In this regard, the Court finds
Graber v. City of Upland (2002) 99 Cal.App.4th 424 to be distinguishable. There, the
improper purpose of the ordinance was conceded by the City as the Court of Appeal
acknowledged ['Although the issue is a close one, the city's candid statement of its
reasons for adopting ordinance No. 1683 makes it clear to us that the sole purpose of the
ordinance was to avoid the base year limitation for the 77-acre parcel. We agree with the
trial court that this is an improper purpose which conflicts with the statutory scheme.'] In
this case there is no acknowledged improper purpose."
As to GAG's argument that the agreements should be reviewed as a single
transaction in determining if they were lawful, rather than reviewing each individual
agreement, the trial court found that GAG challenged only certain portions of the overall
settlement, and that, "Similar to how [GAG] approached the case—and as Defendants
argue—the Court believes it may look at each agreement separately to see if any of
Plaintiff's other arguments have merit."
As to the transit line agreement, the trial court found that the agreement "was
adequately provided for in the Grantville Redevelopment Plan" and "[t]he appropriate
findings" were made pursuant to section 33445, and therefore GAG's motion as to that
agreement was denied
As to the joint projects agreement, the court found, "Although the 'Joint Projects'
are not identified with specificity, the Joint Projects Agreement provides that the projects
be consistent with the CRL [citation], which requires a five year implementation plan.
[Citation.] The Grantville Five-Year Implementation Plan lists specific projects that may
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be funded. [Citations.] Moreover, the funding of a joint project must follow a process
requiring Agency approval based upon whether the proposed project benefits the
Grantville Redevelopment Project area consistent with the CRL. [Citation.] The Court
concludes that the Joint Projects are sufficiently identified for purposes of compliance
with the CRL." The court also found that this challenge to the joint projects agreement
had not been administratively exhausted as to the City and Agency.
As to the North Embarcadero agreement, the court found that the issue relating to
the alleged possible use of the North Embarcadero funds to improve the County
Administrative Center in purported violation of section 33445, subdivision (g)(1) (section
33445(g)(1)) had not been administratively exhausted, and therefore denied judgment as
to that issue.
On February 15, 2011, the court entered judgment in defendants' favor, finding
that all of the subject actions taken by the City, Agency, and County were "adequate,
sufficient, legal, and valid and in conformity with the applicable provisions of laws and
enactments, including the applicable provisions of the Community Redevelopment
Law . . . ."
After plaintiffs filed this appeal from the judgment of dismissal, the CRL was
amended to dissolve all redevelopment agencies in California. (§ 34172.) The Agency
was dissolved effective June 29, 2011, and the City of San Diego Redevelopment
Successor Agency (Successor Agency) was designated as its successor agency as
provided for in the amended provisions of the CRL. (§§ 34171, subd. (j), 34173, subds.
(b) & (d)(1), 34176, subd. (a).) The Successor Agency now stands in the place of the
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Agency in this litigation. (§ 34173, subd. (b) ["all authority, rights, powers , duties and
obligations previously vested with the former redevelopment agencies . . . are hereby
vested in the successor agencies."].)
DISCUSSION
On this appeal, GAG does not challenge the affordable housing credit and
allocation agreement or the AII resolution. Therefore, only three of the cooperation
agreements are before us on this appeal: the transit line improvements agreement, the
joint projects agreement and the North Embarcadero agreement.
I. STANDARD OF REVIEW
Because this appeal involves issues of law, we apply the de novo standard of
review. (Redevelopment Agency v. County of Los Angeles (1999) 75 Cal.App.4th 68, 74;
Community Youth Athletic Center v. City of National City (2009) 170 Cal.App.4th 416,
427.)
II. ANALYSIS
A. Section 33445 Permits the Subject Agreements
Redevelopment agencies are funded by a portion of property taxes generated
within a redevelopment project area, which is commonly referred to as "tax increment"
financing. (Section 33670, subd. (b)); City of Dinuba v. County of Tulare (2007) 41
Cal.4th 859, 866.)
Section 33445, subdivision (a) (section 33445(a)) authorizes the transfer of tax
increment from a redevelopment project for the construction of public facilities. At the
time the subject agreements were approved, former section 33445(a) permitted the
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transfer of tax increment for a public facility within or without the redevelopment project
area if the appropriate legislative body made the following findings: (1) "That the
buildings, facilities, structures, or other improvements are of benefit to the project area or
the immediate neighborhood in which the project is located, regardless of whether the
improvement is within another project area;" (2) there are "no other reasonable means of
financing" the public improvements; and (3) the payment of the funds for the public
improvements will assist in eliminating one or more blighting conditions within the
project area and is "consistent with" the redevelopment project implementation plan.
The findings required by section 33445(a), if they are made as specified in that
section, are final, conclusive, and not subject to court review. (§ 33445, subd. (b)
(section 33445(b)).)
As we have discussed, ante, defendants made these findings in satisfaction of the
requirements of section 33445(a). Furthermore, those findings procedurally complied
with the requirements of the CRL governing the adoption of the related resolutions.
The judgment is affirmed. Defendants shall recover their costs on appeal.
NARES, Acting P. J.
WE CONCUR:
McINTYRE, J.
IRION, J.
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AI Brief
AI-generated · verify before citing
Holding. The court held that the cooperation agreements between the City, the Agency, and the County were lawful under the Community Redevelopment Law (CRL) and that the required legislative findings under Health & Safety Code section 33445 were final and conclusive. Furthermore, the court held that it could not inquire into the subjective motivations of local legislators regarding the settlement.
Issues
Whether the settlement agreements violated the Community Redevelopment Law (CRL) pass-through and offset requirements.
Whether the transfer of redevelopment tax increment for public facilities was invalid due to a lack of specific project identification.
Whether the court may invalidate legislative actions based on the alleged improper motivations of the governing bodies.
Whether the plaintiff failed to exhaust administrative remedies regarding certain claims.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“The findings required by section 33445(a), if they are made as specified in that section, are final, conclusive, and not subject to court review.”
“Courts do not review the motivations of local legislators in the actions they undertake. Courts only review the legality of the actions themselves.”
“The short answer to plaintiffs' argument is that the Constitution and the City's charter permit the City to avoid the two-thirds vote requirement by creating a joint powers agency to finance public works projects.”