Less Briggs, more potholes, says Goldsmith

City attorney Jan Goldsmith is on the offensive, publicly calling out attorney Cory Briggs for his opposition to a public financing plan used to pay for infrastructure repairs and public services.

On January 15, the city attorney's office aired their grievances in a formal press release. In it, the city attorney blamed Briggs for getting in the way of infrastructure repairs and delaying construction of fire stations.

At issue are so-called lease-revenue bonds.

Cities and municipal governments throughout the state use similar financing plans to raise capital. They consist of a government entity signing over property it owns to a newly created financing entity for a nominal fee. The financing entity then raises millions of dollars by using the land as collateral. After capital is raised, the entity sublets the land to another municipal government to pay down the debt.

The financing scheme was validated in Rider vs. City of San Diego in 1998. In that case, the Port of San Diego leased the San Diego Convention Center to a third entity created by the Port and the City for two (2) dollars. The public financing authority then leased the land to the city so it could raise $205 million to fund the convention center expansion.

But, says Briggs, the latest incarnation used by the city is a whole different beast.

Unlike the Rider case where the port leased the convention center land to the financing authority who then leased it to the city, in lease-revenue bonds, it is the city doing the leasing and the paying, and the so-called Public Facilities Financing Authority is only responsible for raising the $130 million from investors.

Here's how Briggs explains it: "I rent your car for a dollar, then I take out a loan against the car for $10k, and then I rent the car back to you for an amount equal to my loan payment — all the while with you claiming that you are not liable for the loan."

But in November 2014, a judge ruled against that logic. The city attorney's office seized on the judgements in the January 15 press release.

"Briggs’ first challenge to the City’s practice of using bond proceeds to finance infrastructure projects went down in flames last November. After a three-day trial, Superior Court Judge John S. Meyers issued a resounding affirmation of San Diego’s method for funding neighborhood improvements.

"There is little doubt that Briggs' latest desperate attempt to stall the bond issuance is frivolous and not grounded in the law," read the statement. "Unfortunately, the City will be forced to waste scarce resources to fend off yet another frivolous Briggs' attack on City operations. The Briggs lawsuits challenging the bonds have already added months of delay to the City’s efforts to improve neglected neighborhoods."

Goldsmith even joined the fray with a statement.

“Through these dubious lawsuits, Cory Briggs is delaying the City from addressing infrastructure deficiencies in some of its oldest and least affluent neighborhoods,” Goldsmith said. “Mr. Briggs has filed over 50 cases against the City of San Diego and has won only a few. Still, his losses cost taxpayers a lot of money. We could fill many potholes for what it costs to deal unnecessarily with Cory Briggs."

But a closer look at the press release reveals some misleading statements.

Court transcripts obtained by the Reader indicate that the city’s victory was not as “resounding" as the city attorney's office portrays it.

*"Giving property for a nominal value under other circumstances would arguably be a gift of public funds," said judge John S. Meyers in his November 14 ruling.

"That's why you can go all the way back to the beginning, and if the — I mean, [Rider v City of San Diego] could have said this is a subterfuge. The City is essentially taking on a long-term debt. And who are you kidding? They say that. They say this is paying for bonds, and the [state] constitution says two-thirds of the voters have to approve it. That's what they're doing. Everybody knows it. It's obvious.

"You can give a very persuasive argument, this is subterfuge, this is a blatant violation of what the constitution says. And you know, a reasonable person could say that. And that's what Justice Chin [in the Rider court case] says. But what he says is like it or not, it's legal, it's a contingent liability, and it is….

“It's an interesting case and unfortunately somebody has got to avail, but maybe on appeal [Briggs] will carry the day. I will be interested to see what happens."*

Briggs has since filed an appeal.