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San Leandro Sues State Over Redevelopment Funds

The state says the City of San Leandro owes $6.59 million in leftover redevelopment dollars.

The City of San Leandro is suing state financial agencies in an effort to prevent the state from taking millions of dollars in disputed redevelopment funds, according to media reports.

Nearly 400 redevelopment agencies across the state were dissolved by Gov. Jerry Brown last February with the agencies’ collective $1.7 billion used to help close California’s budget gap.

The move has drawn critical financial concerns for cities throughout the state, with many establishing successor agencies to complete redevelopment agency functions and pay off debts.

In question for San Leandro is $6.59 million in leftover redevelopment funds. However, city staff say they owe only $521,000, according to a Bay Area News Group report.

The City of San Leandro filed a lawsuit on Jan. 17 against the Department of Finance, the Alameda Audit Controller and other agencies to dispute the confiscation of the funds.

The city claims that it was wrongly charged for an area covered by both the city and the county’s redevelopment, and that it needs the disputed funds to pay off the redevelopment agency’s debts.

The lawsuit could be resolved next month, city attorneys told BANG.

If the court rules in San Leandro’s favor, it could free up millions of in tax revenue dollars that the county has been withholding from the city.

"The whole post-redevelopment process has been much more complex and convoluted than anyone ever imagined," an attorney told BANG.

San Leandro isn’t the only one suing the state.

El Cerrito filed a lawsuit in December and was able to reach a settlement that allowed El Cerrito to keep $1.76 million, according to BANG.

Union City filed a lawsuit on Jan. 29 over a disputed $54 million in redevelopment funds to demand that the city be allowed to use funds for social service programs and development projects that were initiated and helmed by the former redevelopment agency.

Read the full BANG report here.

Rob Rich February 03, 2013 at 04:18 PM
It would be nice to win one every once in a while...
Jessica Gardner February 03, 2013 at 05:34 PM
The only one winning are the lawyers
Jessica Gardner February 03, 2013 at 05:36 PM
Yeah it would also be "nice" to win the lottery too, The truth is the city is gambling with taxpayer money that would be better spent on....SCHOOLS. But instead the elected officials don't care or at least the current ones don't.
Michael Moore February 03, 2013 at 05:48 PM
Rob, I am not sure what you wanted to win once in a while. The City of San Leandro lost because the court held that San Leandro violated the law that protects the First Amendment and the Freedom of Religion. San Leandro Hospital is a lost cause that has cost more than 2 Million by the Hospital District and then 3 more million by the City. We did not want to win this battle. We cannot afford it and it was simply a waste. That is of course unless you are a fan of lawyers and big government. The Redevelopment Agency monies have actually benefitted the developers and outside interests. All we have to do is to look at the empty redevelopment works to see what a waste it is. No Rob, the city should not have won any of these unless you are a lawyer or developer seeking to steal more tax money. I could be wrong, but I do not think that is you. Unless of course you are part of Jack Maltester's legacy of robbery and rape of San Leandro.
Fran February 04, 2013 at 03:26 AM
It's funny that of all the cities suing the state over redevelopment money, San Leandro is the only one claiming the money is needed to pay off debt. Obligations were figured into the numbers, the state isn't going to take money from us that is needed to pay for bonds. Why can't they be honest with us.

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