Roundup

Danette Goulet

A state appeals court’s ruling last week that the financial contract

for a Downtown redevelopment project is unconstitutional is just a bump

in the road and will not derail the project, city officials say.

But the citizen’s group that fought the plans for the project, which

is set to revamp a two-block area, considers the decision a significant

victory.

The group, Citizens Against Redevelopment, challenged the deal between

the city and the developer, CIM, on three legal points. The court ruled

in favor of the city on two disclosure issues and in favor of the

citizen’s group that a state debt-limitation law was violated.

“The one we won on, we were concerned that the city had committed

future city general fund revenues,” said Jeff Oderman, the attorney for

the group.

“The city and the Redevelopment Agency promised to contribute, by

their figures, almost $30 million in future public tax revenues,” Oderman

said. “My clients looked at those numbers and they are very low. True

numbers are twice as high. They didn’t have enough money to give away so

they promised future revenues.”

That far overstates the issues, said David Biggs, economic development

director for the city.

Fixing the problem is merely a matter of amending the financial

contract, he said, and not at all a hurdle to the project that will

revamp the two-block area hemmed in by Main Street, Pacific Coast

Highway, 5th Street and Walnut Avenue.

“It’s a technical element that violates a law about the city incurring

long-term debt and is curable in our minds,” Biggs said. “In our

discussions we’re already working on the flaw in financing. I don’t

believe it will delay the project at all.”

Biggs said that although city officials are disappointed by the

court’s decision, which does mean additional work and forces another

round of public hearings, it is by no means the blow the group suggests

it is. Reducing financing should not be a problem, he said, because the

scope of the project has already been scaled back, as the city will not

be taking over additional businesses on Pacific Coast Highway by use of

eminent domain as originally planned.

The citizen’s group still feels the project is too much for that area.

“The development approved is a huge overbuilding of that area,”

Oderman said. “The parking lot is 600 cars alone. What [Citizens Against

Redevelopment Excess] were hoping is that it would be scaled back and be

a good addition and draw to attention to Downtown, but not overwhelm

Downtown.”

Amendments to the contract are being drawn up and Biggs expects

construction on the project will still go on in late 2002 as planned.