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Grantville Action Group v. City of San Diego
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.

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