On Friday afternoon, the Third District Court of Appeal denied a request for a temporary stay on a $1.7 billion state taking of local redevelopment funds.
The stay request was filed by the California Redevelopment Agency, which opposes the state plan to transfer $2.05 billion in local redevelopment funds to help balance California’s budget. That money will be sent to local county auditors who will then redistribute the money to fund area school districts in lieu of the state’s obligation, freeing state general fund dollars for other purposes.
A CRA lawsuit arguing the take was illegal failed in Sacramento Superior Court on Tuesday. The CRA will appeal that ruling in full to the Third District Court of Appeal, but had sought the temporary stay to stave off the first payment to the state, due Monday.
The City of Turlock Redevelopment Agency will now be forced to make their first payment of $3.3 million on Monday. An additional $686,565 is due next year, bringing Turlock’s total bill to nearly $4 million.
Redevelopment agency funding, under state law, is intended to revitalize blighted local neighborhoods. Common uses for RDA funding include public works projects, the construction of community buildings, or rehabilitation of deteriorated downtowns or housing tracts.
The CRA argues that state law allows redevelopment funds to be used solely for narrowly specified redevelopment activities within an agency’s boundaries. Additionally, the suit argues the raid could impair bond covenants and other contracts, in violation of both the state and federal constitution.
In Turlock, the ruling will not impact any projects that have already been funded — including the $5.1 million Carnegie Arts Center and the $2.8 million renovation of the Turlock High School track and field.
But the ruling does jeopardize the city’s ability to move forward with the proposed Public Safety Facility, a $35 million structure intended to house the city’s police and fire employees. The City of Turlock had planned to issue bonds to pay for the development, but bonding may be made impossible without guaranteed revenue to repay the debt.
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