Huntington Beach is ready to battle for $72 million owed by the state, city attorney says

Huntington Beach City Attorney Michael Gates says the state owes the city $72 million and he’s willing to go to court to get it.

In a letter sent last week to the state’s Department of Finance, Gates contends that the city should be reimbursed for the money it lent to the state’s now-defunct redevelopment agency.

The agencies were initiated more than 40 years ago as part of an effort to address blight and underdeveloped areas in cities throughout the state. Gov. Jerry Brown dissolved the agencies in 2011.

“The city is ready and willing to fight this injustice,” Gates said. “The state will not get away with not following the clear and unambiguous law on these issues.

“We’ve been bold and stood up to the state on many other issues. We are not afraid to take this fight to Sacramento and fight for the citizens of Huntington Beach.”

Gates’ letter was a response to one sent to the city by the Department of Finance in May, which denied the city’s claim to the money. The department oversaw the redevelopment program.

The department’s letter came after the city delivered boxes of evidence to Sacramento to back up its claims for reimbursement for funding a dozen of the redevelopment agency’s projects in the city, Gates said. These included downtown improvements and purchasing land for the Main Promenade Parking Structure and the commercial center The Strand, which has been renamed 5th and PCH.

Yet, the department concluded that the city “didn’t meet a burden to prove the validity or reimburse-ability of the loans,” Gates said.

The department provided this blanket denial and failed to provide any specific explanation, Gates said.

“We dotted all our I’s and crossed our T’s and they still denied us,” Gates said.

Furthermore, Gates said the department’s denial is a usurpation of the city oversight board’s validation of the reimbursements.

“Basically, the state overruled us but they had no legal authority to do so,” Gates said.

Gates said the City Council is backing him and a lawsuit will be filed against the state if the issue is not rectified. In his letter, he requested that the Department of Finance respond by Sept. 8.

H.D. Palmer, the deputy director of external affairs for the Department of Finance, said they’re currently reviewing Gates’ letter and will respond to the city when finished.

Since the dissolution of the redevelopment agencies, other cities have sued the state seeking reimbursement funds.

In 2014, Costa Mesa was granted $10.3 million after filing suit and Irvine recouped $292 million in a settlement with the Department of Finance.

benjamin.brazil@latimes.com

Twitter:@benbrazilpilot