City files suit against state DOF

City’s $3 million claim is the latest in the years-long dispute regarding redevelopment

Rebecca Neipp

News Review Staff Writer

More than a year after Gov. Jerry Brown’s actions eliminated redevelopment agencies across California, the city of Ridgecrest is still in the complicated process of winding down those affairs.

City Attorney Keith Lemieux confirmed last week that his ongoing closed-session discussions with the Ridgecrest City Council involved a $3-million claim filed last week against the California Department of Finance.

The context for this most recent dispute stretches back to a years-long battle between the state and California cities over the redevelopment funding stream. After the state seemed to definitively lose any claims of control after court rulings and voter mandates backed the autonomy of municipalities, Brown responded by eliminating RDAs.

Since that dissolution took effect in February 2012, cities across the state have formed successor agencies to sort through RDA holdings in order to pay off existing obligations, honor previous contracts and send liquidated assets to the Department of Finance.

The city claims that its standing agreement with Ridgecrest Pacific Associates to develop a senior housing project on Downs Street qualifies for the $3-million RDA incentive under existing law. Lemuieux pointed out that since the agreement was signed in March 2011, the project qualifies as an enforceable obligation.

Lemieux also noted that in a similar dispute between Lemoore and the Dept. of Finance, the initial decision to deny Lemoore’s claim was reversed. When Lemieux pointed that out to state officials, they refused to do the same for Ridgecrest.

“The state has taken the position that this loan is not an enforceable obligation because documents related to the loan were executed after June 27, 2011,” states an executive summary provided by Lemieux.

“The loan was reviewed and determined to be proper under the dissolution law by the RRA’s attorney, Dave McEwen.”

After reviewing the matter, wrote Lemieux, he believes the state made a mistake.

“The city has exhausted every remedy and now we have no choice but to file this writ. We have reached out to attorneys representing the developer in the case who have successfully reversed other DOF decisions in court. They have indicated that they will join us in challenging this decision.

“I am optimistic that we will prevail in court.”

Story First Published: 2013-04-03