Ruling Maintains Funding of Essential Services

The Affordable Housing Coalition v. Sandoval, Sacramento Superior Court No. 34-2012-80001158-CU-WM-GDS

After four years of litigation, Sacramento Superior Court issued a ruling allowing property taxes formerly allocated to redevelopment agencies, to continue to fund schools, fire protection and other core local government functions after legislation dissolved redevelopment agencies across the state. On September 26, 2016, in a matter arising from the dissolution of redevelopment, the Honorable Judge Kenny denied the Affordable Housing Coalition of San Diego County’s Second Amended Petition for Writ of Mandate and Complaint for Declaratory Relief.

The Coalition’s Petition named almost all of the taxing entities in San Diego County, including Cities, Successor Agencies and Districts, as a Respondent or Real Party in Interest.  The Coalition contended that despite the dissolution of redevelopment agencies and elimination of their funding, the redevelopment agencies’ affordable housing obligations continued on as enforceable obligations of Successor Agencies, formed to facilitate the redevelopment agencies’ dissolution. The Coalition further alleged that the Successor Agencies failed to comply with these obligations.  The remedy pursued by the Coalition would have resulted in the diversion of property tax funds from schools and other core services to which those funds were allocated post dissolution. In May 2015, the Court bifurcated the action to first determine the merits of the Coalition’s legal contentions before addressing its factual contentions.   After oral argument and further consideration, the Court issued a detailed 22-page Ruling, denying the Coalition’s legal claims for lack of merit. The Court further determined that it was not required to decide the Coalition’s factual claims to deny the Petition and Complaint in its entirety.

Lounsbery Ferguson Altona & Peak defended this action on behalf of multiple public entities, taking the lead in briefing and arguing the legal issues.  James Lough and Alena Shamos represented the Lemon Grove entities, and also specially appeared on behalf of several of Successor Agencies and Cities in defending against the Coalition’s claims.