Grantville Action Group v. City of
Filed 5/17/13 Grantville Action Group v. City of San Diego CA4/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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COURT
OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
GRANTVILLE ACTION GROUP,
Plaintiff and Appellant,
v.
CITY OF SAN DIEGO et al.,
Defendants and Respondents.
D059318
(Super. Ct. No. 37-2008-00092628-
CU-MC-CTL)
APPEAL from
a judgment of the Superior Court
of
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 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.
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,
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
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.
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 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.
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.
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, and the County,
related to the GRP.
title="">[1]
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' [
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."
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 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 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.
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 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. (Meaney v. Sacramento Housing &
Redevelopment Agency (1993) 13 Cal.App.4th 566, 580-581 (
Moreover,
Courts of Appeal have consistently approved the use of tax increments for
public improvements under section 33445.
In Meaney, supra, 13 Cal.App.4th 566, the county entered into an
agreement with the city and agency by which the City of Sacramento and its
redevelopment agency agreed to pay the county the amount of property tax it
would have otherwise received and provided that such payment would be made
toward a new county courthouse and "other related County public
facilities." (Id. at p.
573.) The court rejected the plaintiff's
argument that use of tax increment to construct the courthouse was illegal,
stating, "It will be noted that the first paragraph [of section 33445]
generally authorizes an agency to pay for the construction cost and land value
of publicly owned facilities which benefit the [redevelopment] project
area. . . . The agency's
authority to make the payments implies, we conclude, authority to enter into
agreements governing the conditions of payment, including agreements with the
local government which will own the public facility." (Meaney,
at p. 575.)
In this
case, defendants found that (1) the North Embarcadero improvements would
benefit the Centre City Redevelopment Project or the immediate neighborhood in
which the improvements were located; and (2) the use of $7.84 million of tax
increment for joint projects consistent with the CRL would benefit the GRP or
the immediate neighborhood in
which they are located. Thus, under
section 33445 and Meaney, these are
lawful expenditures of the Grantville tax increment.
Similarly,
in City of Cerritos v. Cerritos Taxpayers
Assn. (2010) 183 Cal.App.4th 1417 (Cerritos),
the Court of Appeal addressed a transaction in which the redevelopment agency
agreed to lease school district-owned property to a nonprofit housing
corporation whose board of directors was the city council. The agency would then finance the development
of a low-cost housing project. As part
of that same transaction, the city agreed to purchase certain real property and
improve that property for the relocation of the school district offices. (Id.
at pp. 1425-1427.) The Court of Appeal
affirmed the trial court judgment validating the transaction, holding that the
subject transaction was prmitted by section 33445(a). (Cerritos,
at pp. 1430-1431.)
Moreover,
as both the Meaney and
legislative findings are final and
under section 33445(b). (
["the evidentiary basis for the findings are supported by substantial
evidence or by any evidence at all in the administrative record"];
1434-1435 ["The City and Agency made all the findings required by [section
33445(a)] . . . .
Nothing further is required by section 33445. And, as subdivision (b) of that section
states, 'The determinations . . . shall be final and
conclusive.'"] The only permissible
judicial review is whether the appropriate procedures were followed and whether
the determinations that were made comply with section 33445. (Meaney,
supra, 13 Cal.App.4th at pp. 578-579.)
In this
case, defendants utilized the procedures prescribed by section 33445(a). They approved the expenditure of GRP funds
for the construction of public improvements located outside the Grantville
Project area. In approving those
expenditures, defendants made the statutory findings that the subject
expenditures will benefit the GRP or the immediate neighborhood in which the
project is located, that there is no other reasonable means of financing the
public improvements, and that the expenditures for the public improvements will
assist in the elimination of one or more blighting conditions and are
consistent with an adopted implementation plan.
Those
findings are now beyond judicial scrutiny because defendants proceeded as
required by law. (§ 33445(b).)
Finally, it
should be noted that the Attorney General's Office reviewed the subject
transactions and opined in a letter to Senator Christine Kehoe that the subject
transactions are "permissible" under the CRL. An opinion by the Attorney General's Office,
while not binding, "'[is] entitled to great respect' and given great
weight by the courts." (Shapiro
v. Board of Directors (2005) 134 Cal.App.4th 170, 183, fn. 17.)
B. Legislators'
Motivation
As noted,
and County were impermissibly motivated to "do indirectly what [they]
cannot legally do directly." We
reject this contention because courts do not review the motivations of local
legislators in the actions they undertake.
Courts only review the legality of the
actions themselves.
In County
of Los Angeles v. Superior Court (1975) 13 Cal.3d 721, the plaintiff filed
a taxpayer suit challenging the County's adoption of an ordinance on the basis
that it had been adopted as a result of a threatened illegal strike by public
employees. The trial court granted a
motion to permit certain discovery relating to the supervisors' motivation in
enacting the ordinance. The California
Supreme Court issued a writ of prohibition as to that discovery, holding it was
barred by the rule precluding courts from inquiring into legislators'
motivation. As our high court explained,
"[T]he discovery order in the instant case implicates
a . . . fundamental, historically enshrined legal principle
that precludes any judicially authorized inquiry
legislators. As early as 1855, Chief
Justice Murray declared in an opinion for this court: 'I know of no authority this Court possesses
to inquire into the motives of the Legislature in the passage of any law; on
the contrary, it has been uniformly held, that they could not be inquired
into.' [Citation.] This doctrine has been reiterated in
literally scores of California decisions."
(Id. at p. 726.) "'The diverse character of such motives,
and the impossibility of penetrating into the hearts of men and ascertaining
the truth, precludes all such inquiries as impracticable and
futile.'" (Ibid.)
Similarly,
in Board of Supervisors v. Superior Court (1995) 32 Cal.App.4th 1616 the
court stated, "'[T]here is an element of futility in a judicial attempt to
invalidate a law because of the bad motives of its supporters. If the law is struck down for this reason,
rather than because of its facial content or effect, it would presumably be
valid as soon as the legislature or relevant governing body repassed it for
different reasons.'" (Id. at
p. 1624, fn. 3.)
Also, the
United States Supreme Court in Soon Hing v. Crowley (1885) 113 U.S. 703,
710-711, made the following statement:
"[T]he rule is general with reference to the enactments of all
legislative bodies that the courts cannot inquire into the motives of the
legislators in passing them, except as they may be disclosed on the face of the
acts, or inferrible from their operation, considered with reference to the
[conditions] of the country and existing legislation."
In
Cal.4th 1035 (Rider II), the
California Supreme Court reviewed a transaction by which the City of San Diego
and the San Diego Port Authority formed a joint authority to issue bonds for
expansion of the City's convention center.
The plaintiff there asserted that the City and Port Authority's
motivation in doing so was to avoid the two-thirds vote requirement that would
have applied if the City had issued the bonds.
Our high court rejected that argument, stating, "We are not naive
about the character of this transaction.
If the City had issued bonds to pay for the Covention Center expansion,
the two-thirds vote requirement would have applied. Here, the City and the Port District have
created a financing mechanism that matches as closely as possible (in practical
effect, if not in form) a City-financed project, but avoids the two-thirds vote
requirement. Nevertheless, the law
permits what the City and Port District have done." (Id. at
p. 1055.)
Acknowledging
the holding in Rider v. County of San
Diego (1991) 1 Cal.4th 1 (Rider I)
circumvent Proposition 13's requirement of a two-thirds vote to impose
"special taxes" by creating a financing agency, our high court
nevertheless held that the actions of the City in Rider II were proper:
"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. Therefore, however we might characterize the
financing plan at issue here, we cannot characterize it as unlawful." (Rider
II, supra, 18 Cal.4th at p. 1042.)
Accordingly,
GAG's attempt to challenge the agreements based on defendants' purported
motivation is unavailing. Courts may not
inquire into the motivations of a local legislative body, such as the City
Council, Agency and County Board of Supervisors, to determine if they intended
to "do indirectly what they could not do directly."
GAG asserts
that Graber v. City of Upland, supra, 99 Cal.App.4th 424, controls in
this case. However, the Court of Appeal
in Graber was only able to consider the local legislators' intent only
because that intent was admitted by
the city and expressly stated in the
ordinance that was under review by the court: "[T]he 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 void the base year limitations for the 77-acre
parcel. We agree with the
purpose which conflicts with the statutory scheme." (Id. at p. 433).
In this
case, however, defendants have made no such admissions relating to the subject
agreements. Rather, it has been
defendants' position throughout these proceedings that the subject agreements
were lawful under the CRL.
GAG's
citation to St. John's Well
Child & Family Center v. Schwarzenegger (2010) 50 Cal.4th 960 is also
unavailing. That case concerned the
Governor's line item veto power, not the motivation of legislators in enacting
laws. (Id. at p. 979, fn. 13.)
C. The
Subject Agreements Do Not Violate Section 33607.5
GAG asserts
that the settlement violates section 33607.5 because the settlement amounts to
a prohibited "pass-through" of tax increment to the County. Procedurally, that argument is barred by the
doctrine of failure to exhaust administrative remedies. Substantively, the argument fails as the
agreements are not subject to the limitations of section 33607.5. Finally, this contention misapprehends the
payments under the subject agreements.
They are not payment of additional general fund moneys "passing
through" to the County. Rather,
they are permissible transfers of tax increment for projects consistent with
the purpose of redevelopment.
1.
GAG never
raised any issue relating to a potential violation of section 33607.5 in its
opposition at the City/Agency hearing or at the County hearing. Therefore, that issue is barred by the
doctrine of failure to exhaust administrative remedies. (Evans v. City of San Jose (2005) 128
Cal.App.4th 1123, 1136-1137 [In a validation action challenging a redevelopment
plan adoption, the challenger must raise all issues at the administrative
level.].)
2.
33607.5
Section
33607.5, subdivision (f)(2) (section 33607.5(f)(2)) provides: "Notwithstanding any other provision of
law, a redevelopment agency shall not be required, either directly or
indirectly, as a measure to mitigate a significant environmental effect or as
part of any settlement agreement or judgment brought in any action to contest
the validity of a redevelopment plan pursuant to Section 33501, to make any
other payments to affected taxing entities, or
to pay for public facilities that will be owned or leased to an affected taxing
entity."
However,
the legislative history of section 33607.5, states that it "[p]rohibits an
agency from paying for any public improvement unless the legislative body
makes the determination that the proposed improvement will assist in the
elimination of blight." (Assem. Com. on Housing and Community
Develoment, Rep. on Assem. Bill No. 1290 (1993-1994 Reg. Sess.) June 16, 1993,
p. 4, italics added.) Defendants
made such a finding as to each
cooperation agreement and therefore section 33607.5 does not apply.
Additionally,
appellant's argument as to the joint projects agreement also fails under the
express language of section 33607.5(f)(2).
This is so because (1) the Agency is not being compelled to make the
subject payments, they are voluntary payments under the terms of the subject
cooperation agreements; (2) there is no payment to the County as the payment is
to a joint account; and (3) there is no evidence that a joint project will be
owned by the County because the agreement requires the joint project to be
consistent with the CRL, under which such ownership would be precluded.
Recognizing
that the express provisions of section 33607.5(f)(2) do not support its
position, GAG argues that the intent
of the CRL should override the specific statutory provisions. However, "'"If the [statutory]
language is clear and unambiguous there is no need for construction, nor is it
necessary to resort to indicia of the intent of the
Legislature."'" (People v.
Zambia (2011) 51 Cal.4th 965, 972.)
Further,
the intent of the CRL as to additional payments to local taxing entities does
not assist appellant in this case. The
pass-through agreements and replace them with the statutory pass-through
payments.
Under
sections 33607.5 and 33607.7, agencies must pay a portion of their tax
increment to "affected taxing entities." These payments are referred to as
"pass-through" payments. (Los
Angeles Unified School Dist. v. County of Los Angeles (2010) 181
Cal.App.4th 414, 421-422 [discussing the general nature of pass-through
payments].)
However, in
this case, the Agency (now the Successor Agency) is not paying any additional
money into the County's general fund pursuant to the subject agreements. Any money transferred pursuant to the subject
agreements is strictly for projects
consistent with the CRL. For example,
the joint projects agreement repeatedly provides that any expenditure under the
agreement must benefit the GRP consistent with the CRL. Similarly, the Agency found that the North
Embarcadero improvements will benefit the Centre City Redevelopment Project.
(1AR ex. 8:69, ¶ 1.a)!
Therefore, because
any tax increment transferred under the joint projects agreements is limited to
benefiting redevelopment consistent with the CRL and is not paid into the
County's general fund for any expenditure that the County may choose to make,
the funds transferred under the subject agreements do not constitute
impermissible additional payments under section 33607.
Finally,
GAG argues that public policy should support its position. However, questions relating to public policy
are to be addressed by the Legislature, not the courts. (Los Angeles Unified School Dist. v.
County of Los Angeles, supra, 181 Cal.App.4th at p. 427 "[I]t is not
our province 'to second-guess the wisdom
of legislative appropriations. The
forums for addressing this issue lie with the voters and the
Legislature.'"].)
D.
GAG
contends that the joint projects agreement violates the CRL because it does not
specifically identify the joint projects that are the subject of the
agreement. That argument is unavailing
for two reasons. First, this issue has
been waived because neither GAG nor any other entity or person raised that
issue in the administrative hearings conducted by the City and Agency. Second, this contention is not supported by
law. Under the CRL, joint public
projects may be "consistent with" the redevelopment plan without
being specifically identified.
1.
No
objection was made at the joint public hearing of the City Council and Agency
board that the joint projects agreement was unlawful because it failed to
projects that were going to be constructed.
As we have noted, ante,
"must also show that the issues raised in the judicial proceeding were
raised at the administrative level. . . . [¶] 'The rule affords the public agency an
"opportunity to receive and respond to articulated factual issues and
legal theories before its actions are subjected to judicial
review."'" (Evans v. City
of San Jose, supra, 128 Cal.App.4th at pp. 1136-1137.)
GAG asserts that even if it did not
exhaust this issue as to the City and Agency, it did exhaust the issue as to
the County. That contention is
unavailing because GAG (or another individual or entity) was obligated to raise
and preserve the issue at all stages
of the administrative proceedings. (City
of San Jose v. Operating Engineers Local Union No. 3 (2010) 49 Cal.4th 597,
609 ["Exhaustion requires 'a full presentation to the administrative
agency upon all issues of the case and at all prescribed stages of the
administrative proceedings.'"].)
Because the joint projects agreement was required to be approved by the
City/Agency and the County, GAG was
required to raise this issue before each approving body.
2.
As we have
noted, ante, GAG also asserts that the subject agreements violate the CRL
because they fail to identify any specific projects. We reject this contention.
GAG's argument misapprehends the
purpose of a redevelopment plan. A redevelopment
plan is not a blueprint for the construction of specific identified projects on
specific identified parcels of land in the project area. As the California Supreme Court stated in
plan under the Community Redevelopment Law does not require an architectural
plan complete with engineers' specifications; it contemplates, rather, a
comprehensive method or scheme of action, a way proposed to carry out within
the essential framework of the law a particular project of redevelopment."
In County
of Santa Cruz v. City of Watsonville (1985) 177 Cal.App.3d 831, 841 the
Court of Appeal stated: "Thus, a
redevelopment agency is unique among public entities since in order to achieve
its objective of eliminating blight it must rely upon cooperation with the
private sector. Redevelopment is also a
process which occurs over a period of years.
These realities dictate that a redevelopment plan be written in terms
that enhance a redevelopment agency's ability to respond to market conditions,
development opportunities and the desires and abilities of owners and
tenants. Such a plan then cannot always outline in detail
during the life of the plan. [Citations.] [¶] . . . . 'It cannot be seriously argued that a final
plan must be a compilation of blueprints or working drawings, representing
final engineering studies, primarily because the agency is not the one who does
the building. The final plan is not
required to be precise from an engineering standpoint but only as reasonably
precise and detailed from a planning standpoint as may be expected in light of
'the complexity and diversity of the conditions which will be
encountered.'"
A
redevelopment plan is just that: a
general plan for the redevelopment of
different types of identified projects.
Here, the GRP provides for a wide variety of public projects (in
addition to private projects) designed to eliminate blight in the Grantville
Project area, as we have detailed, ante.
Therefore, GAG's contention that the
joint projects agreement lacks any identified projects is unavailing. As the court correctly found, the public
projects that are the subject of the joint projects agreement are adequately
identified in the GRP and the related Five-Year Plan.
GAG asserts
that defendants improperly found that the joint project may benefit a
neighborhood that is outside the neighborhood in which the joint project is
located, rather than solely the Grantville Project area. We reject this contention.
First, the
joint projects agreement requires that any proposed joint project benefit the
Grantville Project area. The Agency (now
the Successor Agency) is obligated
to determine if the project proposed by the County "benefits the
Grantville Redevelopment Project Area."
Further,
defendants' findings were in accord with the provisions of former section
33445, subdivision (a)(1) (section 33445(a)(1)) as it existed at the time of
the findings in 2008, which provided: "(a) Notwithstanding Section 33440, an
agency may, with the consent of the legislative body, pay all or a part of the
value of the land for and the cost of the installation and construction of any
building, facility, structure, or other improvement that is publicly owned
either within or without the project area,
if the legislative body determines all of the following: [¶] (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,
or in the case of a project area in which substantially all of the land is
publicly owned that the improvement is of benefit to an adjacent project area
of the agency." (Italics added.)
Therefore,
because defendants made the appropriate findings under section 33445(a)(1) as
it is applicable to the joint projects agreement, GAG's challenge to that finding
lacks merit because those findings are final and conclusive. (§ 33445(b).)
E.
Administration Center
GAG asserts
that the use of tax increment for improvements to the CAC violates the
CRL. GAG's argument is unavailing. First, the North Embarcadero agreement does
used for the CAC building. Second, GAG
failed to raise this issue in the administrative proceedings, and therefore, as
the trial judge correctly concluded, the argument is waived.
1. The North Embarcadero
agreement funds were not intended for use on the CAC building
The North
Embarcadero agreement does not authorize funds to be used to construct/improve
a county administration building. Pursuant to the North Embarcadero agreement,
the Agency (now the Successor Agency) will provide a total of $31.36 million in
39 annual payments to pay for the North Embarcadero Project Improvements.
The North
Embarcadero Project Improvements are described in exhibit B to the agreement
which provides, "'North Embarcadero Project Improvements' shall include
projects consistent with the County 'Waterfront Park' Plan and the California
Community Redevelopment Law, as they may be amended from time to time."
Thus, the
provisions of the North Embarcadero agreement require compliance with the CRL
and only include projects related to the proposed Waterfront Park Plan, not the
CAC building itself.
For
example, the Waterfront Park Plan provides for a waterfront park on land adjacent
to and in the vicinity of the CAC building.
The Waterfront Park Plan's purpose is to "transform this land into
an unparalleled waterfront park . . . ." The term "land" refers to the
surface parking lots on either side of the County building, not the building
itself.
Section 33445(g) does not
prohibit the use of tax increment to improve a public park on County-owned
land. It only prohibits using tax
County administration building or rehabilitation of an existing County
administration building. Former Section
33445, subdivision (g)(1) (now section 33445, subd. (e)(1)) provides: "Notwithstanding any other authority
granted in this Section, an agency shall not pay for, either directly or
indirectly, with tax increment funds the construction,
including land acquisition, related site clearance, and design costs, or
rehabilitation of a building that is, or that will be used as, a city hall or
county administration building."
(Italics added.)
The
improvements and facilities which are the subject of the North Embarcadero
agreement, as set forth in exhibit B, do not
include any description that would expressly or impliedly allow the funds to be
used for the CAC building. Because the
CRL specifically prohibits the expenditure of Agency funds for the
"construction or expansion of a county administrative office," the
North Embarcadero agreement does not permit the alleged illegal expenditure
argued by GAG. Indeed, if the County
expenditures under the North Embarcadero agreement are inconsistent with the
agreement, i.e., violate the CRL, the Agency Director is authorized to withhold
the funds.
GAG's
argument is based on selected references to a planning document for the
Waterfront Park Plan that describes possible enhancements to the CAC building
itself. However, none of those building
projects are included in the list of projects in exhibit B to the North
Embarcadero agreement because such use would be inconsistent with CRL and contrary
to the intent of the North Embarcadero agreement.
GAG thus
ignores the relevant evidence and the North Embarcadero agreement in asserting
that it allows funding for the CAC building itself. By the explicit terms of the North
Embarcadero agreement, the funds may only be used to fund projects consistent
with the Waterfront Park Plan and the CRL.
Using the transferred funds for a County administration building would
violate the CRL and thus it is prohibited by the terms of the North Embarcadero
agreement itself. Accordingly,
Embarcadero agreement violates the CRL and section 33445 is unavailing.
2. GAG
failed to raise this issue at any public hearing
As the
trial court found, neither GAG nor any other entity or person raised this issue
in the administrative proceedings, therefore, the issue has been waived. However, GAG asserts that exhausting
would have been futile. We reject this
contention.
"The
doctrine requiring exhaustion of administrative remedies is subject to
exceptions. [Citation.] Under one of these exceptions, '[f]ailure to
exhaust administrative remedies is excused if it is clear that exhaustion would
be futile.' [Citations.] 'The futility exception requires that the
party invoking the exception "can positively state that the [agency] has
declared what its ruling will be on a particular case."'" (Coachella
Valley Mosquito & Vector Control
Dist. v. California Public Employment Relations Bd. (2005) 35
Cal.4th 1072, 1080-1081.)
Here, GAG
never raised this issue before the City and Agency and, as discussed,
exhaustion is required before all approving public entities. Further, there is nothing in the
administrative record that suggests that the public hearing was a sham or the
result a foregone conclusion. Rather,
the public was allowed to speak freely about the proposed agreements, and the
members of the Board of Supervisors debated the agreements and approved them by
a split vote.
Had GAG
raised the issue at the County's public hearing, the record could have been
clarified to make clear that the North Embarcadero agreement does not permit
the use funds for construction, land acquisition, site clearance, design costs,
or rehabilitation of the CAC because the use of the funds must be consistent
with the CRL
Accordingly,
GAG's "futility" exception argument lacks merit.
DISPOSITION
The judgment is affirmed.
Defendants shall recover their costs on appeal.
NARES,
Acting P. J.
WE CONCUR:
McINTYRE, J.
IRION, J.
name="_ftn1" title="">[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.)
